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	(260546,25280,'PostDate','2018-08-01 07:45:44'),
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However, despite their various contributions to the economy, FOBs have at times failed to realize their full potential due to various factors some of which include a lack of transparency with respect to the management and operations of the Company, inadequate succession planning and the absence of a well-defined dispute resolution mechanism for addressing conflicts within the Company.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Although the Charter is not binding, the issuance of the Charter is a welcome development as its main aim is to promote the growth of FOBs in Saudi Arabia, and provide them with a set of guiding principles that will allow them to operate in line with international best practices and standards.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>To which Companies does the Charter apply?</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Charter is intended for use by FOBs that are incorporated as closed joint stock companies in Saudi Arabia.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">FOBs that are listed on the Saudi Arabian stock exchange (the \"Tadawul\") as open joint stock companies are already subject to the Capital Market Authority’s corporate governance regulations.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">However, the vast majority of FOBs operating in Saudi Arabia are not listed on the Tadawul. MoCI therefore recognized a need to fill this gap by establishing protocols for FOBs to follow.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Saudi Arabian Companies Law issued by Royal Decree no. M/3 dated 28-01-1437H corresponding to 11-11-2015G (as amended) (the \"Companies Law\") will take precedence over the provisions of the Charter as the Charter is meant to be complementary to the Companies Law and provide a set of guiding principles for FOBs to implement in conjunction with their existing regulatory obligations.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>What are the Charter’s Objectives?</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The objectives of the Charter include the following:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">Provide a guiding framework for FOBs to operate in an efficient and growth-oriented manner in conformance with international best practices and standards.</li>\r\n 	<li dir=\"LTR\">Provide a common vision for family members with respect to the Company’s values and strategic objectives.</li>\r\n 	<li dir=\"LTR\">Enhance accountability and control mechanisms for the shareholders of FOBs.</li>\r\n 	<li dir=\"LTR\">Set-up well-defined strategies and protocols that promote transparency and govern the interaction of the family within the Company.</li>\r\n 	<li dir=\"LTR\">Achieve a proper and fair balance between the interests of the family members and the interests of the Company.</li>\r\n 	<li dir=\"LTR\">Put succession plans into place (for both ownership and management) to ensure their survival and orderly transition.</li>\r\n 	<li dir=\"LTR\">Provide a well-defined mechanism for the timely resolution of any family disputes that may occur, and to ensure that such disputes do not impede decision-making within the Company.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Shareholders’ Assemblies</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Similar to what is provided in the Companies Law, shareholder meetings are conducted through the Ordinary General Assembly and Extraordinary General Assembly (collectively referred to as the \"Shareholders’ Assemblies\").</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Shareholders’ Assemblies are required to hold all of their meetings in accordance with the provisions of the Companies Law and the Company’s articles of association.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Resolutions passed during any meeting held by the Shareholders’ Assemblies are valid and binding upon all of the family members in the Company, regardless of whether such family members attended the meetings in which the resolutions were issued.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Family Board is entitled to submit a written request to the Board of Directors to invite the Ordinary General Assembly (or the Extraordinary General Assembly as the case may be) to convene provided the written request contains justifications for convening the Ordinary General Assembly. In the event the Board of Directors fails to respond to the Family Board’s written request, then the Family Board (discussed in further detail below) is entitled to seek the written approval of family members representing at least 5% of the Company’s share capital in order to obligate the Board of Directors to invite the Ordinary General Assembly to convene.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In order to ensure that the Company operates in an institutional manner, family members are prohibited from taking any adverse actions that would prevent the Shareholders’ Assemblies from exercising their functions set out in the Companies Law, the Company’s articles of association and Charter.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Family Board</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Charter prescribes the formation of a Family Board. The Family Board’s competencies include the following:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">Monitor the overall performance of the Board of Directors and ensure they are compliant with the provisions of the Companies Law and the articles of association of the Company. For this purpose, the Family Board can provide an opinion on potential candidates for the Board of Directors. They also have the authority to investigate whether any member of the Board of Directors is engaging in an activity that is detrimental to the Company such as whether there is a potential conflict of interest or unauthorized disclosure of the Company’s trade secrets.</li>\r\n 	<li dir=\"LTR\">Resolve any disputes that arise between family members that may affect the Company’s operations (further details on the dispute resolution mechanism will be provided below).</li>\r\n 	<li dir=\"LTR\">Consider recommendations from family members for the investment of the Company’s assets and presenting them to the Board of Directors for their approval.</li>\r\n 	<li dir=\"LTR\">Take any necessary actions to ensure that new generations of family members are trained and prepared to manage the Company in the future.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">The competencies of the Family Board cannot be in direct conflict with the competencies of the Shareholders’ Assemblies and Board of Directors under the Companies Law, the articles of association of the Company and the Charter.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">It is recommended for a Family Board to be formed when there are more than 12 family members in the Company.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In order to ensure the Family Board exercises its competencies in an effective manner, there should not be more than 6 Family Board members. Members of the Family Board are elected by secret ballot at a special meeting held for this purpose. Members should be elected based on their personal and professional capabilities.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">A member of the Family Board is not permitted to be a member of the Board of Directors or the executive team of the Company.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The term of the Family Board members is restricted to 3 years, and a member is not permitted to be on the Family Board for more than 2 consecutive terms.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Elections for Family Board members take place under the direction of an Election Committee consisting of 5 family members or any other members appointed by the Ordinary General Assembly. A member appointed to the Election Committee is prohibited from serving as a Family Board member. The Election Committee is required to hold elections for the Family Board members at least 25 days prior to the end of their term. The Election Committee should ensure that the election process is held transparently and impartially.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Family Board should have a Chairman and Deputy-Chairman. They are selected by the Family Board members through secret ballot under the supervision of the Election Committee.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Family Board is required to hold at least 4 meetings each financial year. The Family Board should hold a special meeting prior to any meeting held by the Shareholders’ Assemblies in order to consider the agenda items and to make any recommendations it considers necessary within the scope of its competencies.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The majority of the Family Board members should be present in order for a meeting to be valid. Resolutions issued by the Family Board will need to be approved by a majority of the members present at the meeting. In the event of a deadlock, the Chairman will have the casting vote. The Chairman will invite the Family Board to convene when requested to do so by 2 or more members.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Family Board members are entitled to receive remuneration for attending meetings. Remuneration will be equivalent to what is prescribed to Board of Directors members who attend meetings.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">As referenced above, the Charter prescribes a multi-tiered mechanism for the resolution of any disputes that may occur between family members.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Initially, private discussions are held between members of the Family Board to determine the reasons for the dispute and the most optimal way forward to resolving the dispute. The Family Board assigns the Chairman or one of its members who do not have any involvement in the dispute to take the lead in amicably resolving the dispute. The Family Board member assigned to resolve the dispute will then hold discussions with the disputing parties in an effort to resolve the dispute in a manner that is in the best interests of both the family members and the Company.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In the event the dispute cannot be settled amicably, a conciliation body consisting of non-family members will be formed in an attempt to settle the dispute in a fair and impartial manner. The Family Board, in consultation with the disputing members, will determine the scope and composition of the conciliation body.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">If the conciliation body referred to in the preceding paragraph cannot be formed or is unable to resolve the dispute, the Family Board will recommend the disputing parties to resolve their dispute through arbitration or a court. The Family Board will need to take necessary measures to ensure that this does not have an adverse effect on the Company’s operations. The Family Board should continue to make an effort to resolve the dispute until a final binding decision is issued by the arbitration tribunal or court. When a final binding decision is issued, the Family Board should ensure that this decision is implemented.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Board of Directors</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Similar to what is provided in the Companies Law, the Board of Directors has wide ranging authority to manage the affairs of the Company and maximize its value. All shareholders are prohibited from interfering with the Board’s functions or the executive team of the Company, unless they are members of the Board or the executive team.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Board members of the Company will be elected by the Ordinary General Assembly. The recommended number of Board members should be between 5 and 9.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">A Chairman and a Deputy Chairman will need to be elected by the Board of Directors through secret ballot. The Chairman of the Board of Directors is not permitted to hold an executive position within the Company.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">When electing Board members, the Ordinary General Assembly should take into consideration each candidate’s personal and professional capabilities such as his or her ability to lead, competence, financial expertise and medical fitness.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The term of the Board of Directors cannot exceed 3 years. Board members may be re-elected for 1 or more terms.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The CEO of the Company is selected through a resolution issued by the Board of Directors. It is not permissible for the CEO to be the Chairman or Deputy Chairman of the Board of Directors.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Board of Directors has the authority to form an Advisory Board to assist it with its functions. The members of the Advisory Board should have the necessary experience and competence to assist the Board of Directors in developing strategic objectives to ensure the Company’s continuity and growth. The Board of Directors is tasked with establishing the bylaws for the Advisory Board which must then be submitted to the Ordinary General Assembly for approval.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Board of Directors has the authority to form additional committees as it deems necessary to assist it with its functions.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong><img class=\"alignleft size-full wp-image-8047\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/07/shutterstock_737881615-Converted-01.jpg\" alt=\"\" width=\"3967\" height=\"1751\" />Sale of Shares</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Any shareholder who intends to sell all or part of his or her shares in the Company will be required to notify all of the shareholders in writing through the Board of Directors. Each shareholder may exercise their priority right to purchase the shares put up for sale within 30 days from the date of notification. In the event 30 days elapse and no shareholder exercises his or her right to purchase the shares, the shareholder may proceed to sell the shares to a third party. It should be noted that this procedure will not be applicable to any transfer of shares by legal inheritance.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Company Policy</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">A human resources policy should be developed for the Company that contains clear rules for employing a family member, which will address issues such as qualifications, experience, performance, evaluation and termination.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">It is not permissible to create a position for the specific purpose of appointing a family member. Additionally, it is not permissible to terminate, without a valid justification, an employee who is not a family member in order to replace him or her with a family member instead.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The salary of an employee, whether or not a member of the family, should be commensurate with the employee’s position, responsibilities, academic qualifications and level of performance.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The work of a family member employed in the Company should not be subject to the supervision of another family member. In addition, no more than 1 member of the family should work in the same department unless it is in the best interests of the Company.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Additional Provisions</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">A family member is entitled to submit a proposal to amend the Charter. The Family Board will assess the proposal to amend the Charter and prepare a report on its findings which will be presented to the Ordinary General Assembly for its consideration and approval.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The articles of association of the Company should be amended in order to be commensurate with the provisions of the Charter.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Charter should be reviewed by shareholders on a regular basis.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">It is advisable for the Charter to include the names and signatures of each shareholder of the Company on the final page.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Conclusion</strong></p>\r\nIn conclusion, even though the Charter is merely a guide and is not mandatory for FOBs operating in Saudi Arabia, its issuance is nevertheless a positive development as it will raise a general awareness amongst FOBs of the importance of implementing proper governance frameworks and point the way to international best practice and standards and allow them to increase their contribution to the local economy. It may also provide a roadmap for the enactment of future legislation that will be binding on FOBs.\r\n\r\n&nbsp;'),
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	(252851,24643,'PostTitle','Al Tamimi &amp; Company: In the Spotlight'),
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	(252853,24643,'PostDate','2018-07-31 22:02:23'),
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	(256505,24937,'PostDate','2018-08-01 07:43:42'),
	(256506,24937,'PostUrl','http://localhost:8888/tamimi/law-update-articles/overhaul-of-the-uae-finance-companies-regulations/'),
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	(256509,24937,'MetaValueNew','<p dir=\"LTR\" align=\"LEFT\"><img class=\"alignleft wp-image-7994 size-full\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/07/11.jpg\" alt=\"\" width=\"5472\" height=\"845\" />Amongst the several new laws and regulations being introduced in the UAE, the UAE Central Bank (\"Central Bank\") has on10 May 2018 issued new Finance Company Regulations (\"Regulations\" or \"2018 Regulations\") which are to come into effect one month after its publication.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">These Regulations replace the previous finance company regulations issued in 1996 and finance companies regulations for companies conducting business as per Islamic sharia’a principles issued in 2004 (\"Previous Regulations\") and aim at providing a detailed regulatory framework for Finance Companies to operate and develop within the UAE and also covers in its ambit the framework for protecting the customers of such Finance Companies.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">These Regulations consolidate the regulations for both Islamic finance and conventional finance companies (\"Finance Company/ies\") and incorporate certain significant changes including changes to capital requirements and corporate governance, to also be followed by existing Finance Companies. We have set out below certain noteworthy features of these Regulations and a comparative table on the key changes from the Previous Regulations on subject.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>License Application</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Pursuant to these Regulations, conducting financing activities in the UAE without a central bank license is prohibited. An application for such license must include the proposed scope of activities, a feasibility study illustrating the financial activities and products to be launched, estimated financial projections, risk factors, corporate structure, start-up costs, branches and a recruitment plan.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Another important requisite is for the applicant to provide an unconditional guarantee from a UAE Bank, in favour of the Central Bank for an amount equivalent to the minimum required paid-up capital. The License will be granted for a period of three years and may be renewable for the same period unless otherwise required by the Central Bank.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Any changes to the ownership of the Finance Company of 5% or more will require prior approval from the Central Bank.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Cancelling or Revoking a License</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Central Bank has the discretion to approve or refuse the License application, but must notify applicants in writing with reasons in case there is a refusal. Licenses can also be amended, revoked or cancelled at the discretion of the Board. The Regulations set out instances when the license can be cancelled which include providing false/misleading information, risking interests of the potential customers, or if there is a bankruptcy order filed against the Finance Company.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">If a Finance Company wishes to cease operations it must apply to the Central Bank at least six months in advance providing the reasons for such a cessation or suspension.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Regulations also provide for penalties that will be imposed if such company does not follow the provisions of the Regulations including adhering to the anti-money laundering policies laid down by the Central Bank.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Permitted Activities</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Article 10.1 of the Regulation details out the types of activities that are permitted, which are:</p>\r\n\r\n<ol>\r\n 	<li dir=\"LTR\">Retail finance,</li>\r\n 	<li dir=\"LTR\">mortgage finance,</li>\r\n 	<li dir=\"LTR\">wholesale finance,</li>\r\n 	<li dir=\"LTR\">pre-paid cards, and</li>\r\n 	<li dir=\"LTR\">distribution of third party products.</li>\r\n</ol>\r\n<p dir=\"LTR\" align=\"LEFT\">The Central Bank can review and amend this list from time to time.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Article 10 further sets out the do’s and dont’s in relation to the business of the Finance Company, certain key features are:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">it can extend loans only to ‘Juridicial Persons’ (defined under Article 93 of the UAE Civil Transactions Law) and individuals in the UAE. However, it is prohibited from accepting deposits or loans from individuals.</li>\r\n 	<li dir=\"LTR\">it may accept deposits only from Juridicial Persons, subject to certain conditions laid out under Article 10.4 and also borrow from UAE banks, and may even receive foreign funding provided that its risk has been adequately hedged. In doing so it must not exceed 25% of the sum of total amount of its debt capital.</li>\r\n 	<li dir=\"LTR\">it must obtain a no objection letter from the Central Bank in order to provide any new product line from within activities specified in its license.</li>\r\n 	<li dir=\"LTR\">it may only participate in the share capital of brokerage companies, money exchanges, UAE banks and other Finance Companies. Any such single participation cannot exceed 10% of its debt capital and the aggregate participation must not exceed 25% of the debt capital.</li>\r\n 	<li dir=\"LTR\">It must obtain approval from the Central Bank in order to issue bonds or sukuks. Such bonds and sukuks shall only be denominated in UAE dirhams or US Dollars.</li>\r\n 	<li dir=\"LTR\">it is prohibited from financing a borrower which is not an entity incorporated in the UAE or its free zones, or a UAE resident, or where the mortgaged assets are not in the UAE.</li>\r\n 	<li dir=\"LTR\">it is prohibited from entering into the business of money exchange.</li>\r\n 	<li dir=\"LTR\">it must not purchase immovable properties unless for its own use or specific approval for the same has been obtained from the Central Bank. This rule does not apply to Islamic Finance Companies (IFC). IFCs may own property including immovable property and goods as part of an underlying financing contract with a borrower.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Minimum Capital, Liquidity Requirements and Credit Exposure Restrictions</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The minimum paid-up capital for a Finance Company is 150 million UAE Dirhams. UAE national ownership of the Finance Company must comprise at least 60% of total paid-up capital. Finance Companies must also allocate at least 10% of annual net profits to establishing a statutory reserve until the reserve equals 50% of its paid-up capital.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">To withstand short-term liquidity stress, Finance Companies are required to hold an amount equivalent to 10% of their aggregate liabilities in liquid assets i.e. cash held in UAE bank, Certificates of deposit issued by the Central Bank held via a UAE bank, short term deposits with a UAE bank with maturity upto 30 days and UAE federal and local government bonds, which must not exceed 30% of the total liquid assets. For the purpose of calculating the 10% amount, a Finance Company may deduct from its aggregate liabilities, cash collateral, bank guarantees from UAE banks and sovereign guarantees.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The credit exposure is considered ‘large’ if the value of such exposure to one borrower or group of related entities is 7% or more. The Regulations set out maximum exposure limits for different borrower types.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Organisational Structure, Composition and Policies of the Finance Company</strong></p>\r\n\r\n<ol>\r\n 	<li dir=\"LTR\">Founding shareholders - Founding shareholders must satisfy \"Fit and Proper\" criteria as defined by the Central Bank and their appointment must be in line with the Commercial Companies Law<strong>.</strong></li>\r\n 	<li dir=\"LTR\">Board of Directors - The board of directors of a Finance Company must have no fewer than five members. Atleast 60% of the board members of an IFC must have knowledge of the banking business or Islamic finance and banking business as the case may be. The Regulations provide for detailed selection processes and guidances in relation to the board of directors</li>\r\n 	<li dir=\"LTR\">Sharia’a Supervision Committee and other committees - An IFC must have a Sharia’a Supervision Committee, and its role must be laid out in the policies of the IFC. Finance Companies must also have a board committee and credit committee.</li>\r\n 	<li dir=\"LTR\">Senior Management – Finance Companies must comply with the ‘fit and proper‘ test set out by the Central Bank and must be professional who understands the business of finance and was experience of not less than 10 years in the field of finance. Person within the senior management cannot be a part of the board.</li>\r\n 	<li dir=\"LTR\">Corporate Governance - While the Regulations set out certain minimum requirements for corporate governance, Finance Companies are permitted to set out their own policies and framework for corporate governance (complying with the Regulations), however these must be approved by its board of directors and a copy of such policies must be provided to the Central Bank.</li>\r\n 	<li dir=\"LTR\">Internal Policies – the Regulations set out the requirements that need to be adhered to by Finance Companies and IFC with respect to its internal polices in relation to management, risk management, extension of credit, compliance, information technology, security, audit, remuneration, outsourcing, etc.</li>\r\n</ol>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Other provisions</strong></p>\r\n\r\n<ol>\r\n 	<li dir=\"LTR\">Consumer Protection: the Name of the finance company must not include the words \"bank\", \"investment company\" or and other term which may mislead its customer. It must provide its customers with sufficient information regarding its products, etc. in order for them to be able to make an informed decision. The Finance Company must follow the Central Bank guidelines in relation to ‘Consumer Protection’.</li>\r\n 	<li dir=\"LTR\">Credit Reports - Every Finance Company must adhere to the credit reporting requirements of the Al Etihad Credit Bureau and other credit agencies to provide to and obtain information of the Borrower.</li>\r\n 	<li dir=\"LTR\">Accounting Standards - A Finance Company must implement all applicable International Accounting Standards/International Financial Reporting Standards and provide the Central Bank with two copies of signed audited financial statements, including external auditor reports, before 31st March every year. The Central Bank may require the Finance Company to appoint another auditor if the size and nature of the business of the Finance Company so requires.</li>\r\n</ol>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Differences in the new Regulations from the Previous Regulations</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The 2018 Regulations are far more detailed in the nature of investments permitted, liquidity requirements, organisational structure to be followed, investor guidance; we have set out below certain differences in the provisions between the Previous Regulations and 2018 Regulations.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><img class=\"wp-image-7997 size-large aligncenter\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/07/Screen-Shot-2018-07-31-at-5.23.26-PM-1024x947.png\" alt=\"\" width=\"640\" height=\"592\" /></p>\r\n<p dir=\"LTR\" align=\"LEFT\">These Regulations apply to all Finance Companies. Accordingly companies licensed prior to the date of the issuance of these Regulations need to comply with the 2018 Regulations and are given a period not exceeding 3 years from the publication to conform. However, the Central Bank may amend the requirement of compliance within 3 years if it deems the finance company to be substantially in compliance with these Regulations. All existing Finance Companies will require to provide the Central Bank with a detailed adjustment plan to comply with the articles of these Regulations.</p>\r\nAl Tamimi &amp; Company’s Banking and Finance team regularly advises on the Finance Company Regulations. For further information please contact Mark Brown (m.brown@tamimi.com) or Maymoona Talib (m.talib@tamimi.com).'),
	(260337,25261,'CurrentUserRoles','a:2:{i:0;s:13:\"administrator\";i:1;s:10:\"superadmin\";}'),
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	(254313,24769,'PostTitle','Law Update'),
	(266847,25811,'MetaID','223668'),
	(266848,25811,'MetaKey','content'),
	(266849,25811,'MetaValueNew','<p dir=\"LTR\" align=\"LEFT\"><img class=\" wp-image-8023 alignleft\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/07/shutterstock_775162108-389x1024.jpg\" alt=\"\" width=\"329\" height=\"866\" />The suspension of an athlete or nation from participating in the Olympic Games is commonly considered to be the ultimate sporting sanction. Whilst the suspension of Russia from PyeongChang 2018 (and its reinstatement immediately afterwards) grabbed headlines, Kuwait remains subject to a ban imposed by the International Olympic Committee (\"IOC\") in 2015.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Kuwait’s National Olympic Committee (\"NOC\") is no stranger to Olympic exile, having been suspended by the IOC in 1986. More recently, Kuwait was warned by the IOC in 2007 that its sports legislation permitted governmental interference in the internal functioning of its NOC and other sporting federations, in violation of the Olympic Charter. When Kuwait did not address this issue by the IOC’s deadline of 31 December 2009, its NOC was suspended. This ban was lifted shortly before London 2012.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Further sports legislation was enacted in early 2015, however, that conferred upon the Kuwaiti Sports Ministry the power to assume control of national sporting bodies, as well the ability to control financial matters. Consequently, Kuwait’s NOC was disbanded by the Kuwaiti Sport Ministry, purportedly due to financial irregularities, as were nine other national federations. Interim committees were established to take over their administration, headed by figures widely reported to be loyal to the Kuwaiti Sports Ministry. The IOC took the view that Kuwait had failed to ameliorate the position by the IOC’s deadline of 27 October 2015; and, its NOC was suspended again. This came shortly after FIFA had imposed its own suspension on Kuwait’s football association (\"KFA\"), having failed to meet FIFA’s 15 October 2015 deadline for corrective action. Sixteen further international sports federations subsequently followed suit.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Subsequent Developments</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">In response to its censure by the international sporting community, Kuwait went on the offensive. In June 2016, the Kuwait government appealed the IOC suspension in the Swiss Civil Courts and claimed $1 billion compensation for losses flowing from the alleged unjust imposition of a suspension in the absence of an appropriate investigation. The appeal and compensation claim were dismissed in August 2016 and Kuwait was ordered to pay $11,500 towards the IOC’s legal costs. Also in June 2016, the Court of Arbitration for Sport (\"CAS\") rejected an appeal brought by a number of Kuwaiti football clubs (including the Kuwaiti Premier League champions, Kuwait Sporting Club) against the FIFA suspension.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In addition to legal proceedings, Kuwait has made frequent unsuccessful appeals to the IOC (and FIFA) for its suspension to be lifted. Numerous meetings have also taken place between Kuwaiti officials and the IOC, most notably that mediated by the United Nations in January 2016, at which the parties appeared to have to have reached an agreement in principle that Kuwait reportedly reneged upon at a later date.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">On 12 December 2016, Kuwait’s newly-elected parliament voted by a majority of over two thirds to amend the relevant sports legislation to facilitate re-admission to international sport. This vote unfortunately came too late for Kuwait to take part in the AFC Asian Cup Qualification final round, given that the deadline imposed by the Asian Football Conference (\"AFC\") for the KFA to be readmitted to FIFA membership was 18 December 2016.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In early 2017 the IOC are reported to have sent a letter to the Kuwaiti Sports Ministry setting three conditions for Kuwait’s re-acceptance into the Olympic Movement:</p>\r\n\r\n<ol>\r\n 	<li dir=\"LTR\">all relevant sport legislation must be amended in order to comply with the Olympic Charter;</li>\r\n 	<li dir=\"LTR\">all board member changes imposed upon Kuwait’s NOC and other sporting bodes must be revoked; and</li>\r\n 	<li dir=\"LTR\">all ongoing domestic and international cases against the IOC and other international sporting bodes must be dropped.</li>\r\n</ol>\r\n<p dir=\"LTR\" align=\"LEFT\">On 4 December 2017, Kuwait finally bowed to mounting domestic and international pressure by enacting new sports legislation purporting to replace all previous such laws and thus prevent governmental interference with Kuwaiti sporting bodies.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">FIFA lifted its ban on 6 December 2017. However, despite subsequent meetings taking place between Kuwaiti officials and the IOC, the Olympic ban remains in place.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>The wider context of governmental interference</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Sporting bodies are hard-wired to protect their autonomy to govern and regulate their sport, as enshrined in the Olympic Charter. A distinct body of law, lex sportiva, has developed over time to underpin the doctrine that sporting bodies are best placed to understand the unique circumstances of sport and manage them in a way that maximises wider societal benefits. The Olympic Charter promotes collaboration between sporting bodies and government, but prohibits interference. This begs the question as to where the line is between benign and undue governmental influence. Reasonable conditions attached to the receipt of public funds by sporting bodies for grassroots investment is an obvious example of the former, whereas a government retaining unfettered power to disband national sporting federations is an obvious example of the latter. However, there are a myriad of circumstances falling in between.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Kuwait is not alone in finding itself on the wrong side of the IOC due to governmental interference in sport:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">In July 2007, Panama was suspended by the IOC for governmental interference in the running of its NOC. The ban was lifted in April 2008 in time for the nation to compete at Beijing 2008. It was threatened with a further suspension in January 2011 when the Panamanian President demanded the resignation of NOC committee members, but this was averted when the issue was resolved to the IOC’s satisfaction.</li>\r\n 	<li dir=\"LTR\">In January 2011, Ghana’s NOC was suspended by the IOC for failing to amend its sports law to prevent the Ghanaian government from making presidential appointments to its NOC and numerous national sporting federations. The ban was lifted in October 2011 when a new sports law was enacted to prevent political interference, allowing the nation to compete at London 2012.</li>\r\n 	<li dir=\"LTR\">In June 2011, the IOC warned the Indian Sports Ministry that compelling national sporting federations to adopt mandatory eligibility requirements for officials constituted undue governmental interference. When the Indian government ignored this warning and the Olympic Association separately elected officials accused of corruption, the Indian NOC was suspended by the IOC for non-compliance with the Olympic Charter in December 2012. Somewhat uniquely, the IOC lifted this ban lifted four days into Sochi 2014 when new officials were elected, causing the Indian flag to be belatedly raised in the Olympic Village.</li>\r\n 	<li dir=\"LTR\">In 2015, Sri Lanka was warned by the IOC that it faced suspension if it did not revise proposed sports legislation that barred high-ranking officials from standing for re-election by the end of that year. This governmental interference was cited as a major reason for Sri Lanka being stripped of its hosting rights of the 2017 Asian Youth Games.</li>\r\n 	<li dir=\"LTR\">In August 2016, Kenya’s Sports Ministry disbanded its NOC and transferred its duties to Sports Kenya, in response to alleged mismanagement of Team Kenya at Rio 2016 by senior NOC officials. In March 2017, the IOC cut funding and threated suspension of the newly-formed NOC when it refused to accept IOC-requested governance reforms.</li>\r\n 	<li dir=\"LTR\">Recent reports suggest that Saudi Arabia is coming under increased scrutiny from the IOC and FIFA in connection with a growing trend of appointments for government-backed appointees to the Kingdom’s national sports federations. A suspension from international sport would impact the Kingdom’s successful national and club football teams and may also affect its progressive economic reforms, of which sport - and in particular the privatisation of its top-tier football clubs - is a central component, owing to sport’s increasingly valuable geo-political status in the GCC region.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">The IOC is, therefore, not afraid to adopt a robust approach if it considers that the Olympic Charter is being undermined by undue governmental interference. One particular area it has sought to control is the fall-out when relations between national governments and NOCs breakdown. In this regard the IOC has a number of weapons at its disposal, including proactive engagement with the parties, interim funding cuts, the threat of a suspension, and ultimately the imposition of a suspension. The political unpopularity of presiding over a nation suspended from the Olympics more often than not prompts governments to take the necessary remedial action.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Commentary</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The fact that the IOC has not yet followed FIFA’s lead in lifting its ban on Kuwait is an intriguing epilogue to this rather messy affair. The reasons for this are not clear, however it may be because Kuwait has not yet complied with the pre-conditions for re-acceptance (outlined above) to the IOC’s satisfaction. It may also be symptomatic of the deterioration in the relationship between Kuwait and the IOC. A string of previous broken promises and the instigation of a $1 billion lawsuit may have eroded the IOC’s trust in Kuwait delivering meaningful and lasting change this time around.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">What is certain is that the impact on Kuwaiti sport has been marked. Kuwaiti athletes were unable to represent their country at the 2010 Summer Youth Olympics, Rio 2016, and PyeongChang 2018; having to compete instead as neutral athletes under the Olympic flag. Indeed, Kuwait was denied its first ever Olympic gold medal when Kuwaiti shooter Fehaid Al-Deehani claimed the dubious honour at Rio 2016 of becoming the first athlete to win a gold medal as an Independent Olympic Athlete. Similarly, Kuwaiti football teams and clubs have been barred from international competitions (including the World Cup 2018 qualifiers and the AFC Asian Cup 2019) and the national team’s FIFA ranking has plummeted to 160 (having been as high as 24 in 1998). To add insult to injury, all IOC and FIFA financial development assistance has been stopped during the periods of suspension, which has severely affected the finances of Kuwaiti sport. Even more tragic is the impact on Kuwait’s grassroots participants and youth, who have cruelly been denied sporting heroes to aspire to and sporting goals to aim for, as well as their training programmes and facilities being starved of cash from the IOC and FIFA. Many talk of Kuwait’s ‘lost generation’ of talent and feel that lasting damage has been done.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">It is difficult not to draw comparisons with Russia’s 85 day IOC suspension for systemic manipulation of anti-doping rules which the IOC President Thomas Bach described as \"an unprecedented attack on the integrity of the Olympic games and sport\". There is little doubting that a Russian team appeared at PyeongChang 2018 in all but name (and arguably in name, being ‘Olympic Athletes from Russia’, as compared to Kuwait’s ‘Independent Olympic Athletes’), with its 168 athletes (only 64 less than at Sochi 2014) being cheered on by fans wearing Russian kit, waving Russian flags and singing the Russian anthem. Kuwait’s continuing IOC suspension, which in contrast to the Russian suspension does not implicate any individual athletes, does seem to disproportionately punish Kuwaiti athletes for what has been termed a power struggle between Kuwait’s ruling elite.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Now that certain roadblocks to reinstatement have been removed (as outlined above), it seems likely that the IOC ban will be lifted; however it remains to be seen when this will be and what further steps Kuwait will need to take to achieve it.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em><img class=\"alignleft size-full wp-image-8022\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/07/RTHTF.jpg\" alt=\"\" width=\"5786\" height=\"1837\" /></em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">NB: Please note a version of this article was first published on lawinsport.com on 15 June 2018 (https://www.lawinsport.com/topics/articles/item/governmental-interference-in-global-sport-why-kuwait-is-still-in-the-olympic-wilderness).</p>\r\n<em>Andrew (a.moroney@tamimi.com) is an Associate in Al Tamimi &amp; Company’s dedicated Sports &amp; Events Management team, working exclusively for clients in the sports and events sector on commercial, dispute resolution and regulatory matters. For further information please contact Steve Bainbridge (s.bainbridge@tamimi.com)</em>'),
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	(256502,24937,'PostTitle','Overhaul of the UAE Finance Companies Regulations'),
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	(260533,25279,'PostTitle','Catching the wave: New Data Protection Law in Bahrain'),
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	(269097,26002,'MetaValueOld','<p dir=\"LTR\" align=\"LEFT\">Expo 2020 aims to attract over 180 participating nations’, multi-national as well as small and medium sized corporates, and millions of people into the United Arab Emirates (\"UAE\") and the Emirate of Dubai, in order to celebrate human innovation. The logistics of managing the risks associated with vast numbers of visitors has its challenges. In this article, we look at the arrangements in place to ensure health needs are identified and supported, not only while on the Expo site, but while in-country.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The regulator responsible for the delivery of health services to the national population, expatriate residents and visitors in Dubai is the Dubai Health Authority (\"DHA\"). As most visitors are expected to fly into Dubai and make this Emirate their base during the visit, it is expected that DHA will shoulder much of the burden of ensuring it caters for the delivery of health services.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Expo Health Framework</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">As part of it’s advance planning, DHA has developed an Expo 2020 DHA Contribution &amp; Support Framework (\"Health Framework\"), planning ahead in order to be suitably prepared and resourced to provide the best health and organisational services.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Health Framework identifies key strategic objectives which are directly linked to the objectives of the Expo:</p>\r\n\r\n<ol>\r\n 	<li dir=\"LTR\">Position Dubai as a global medical destination by introducing a value-based, comprehensive, integrated and high quality service delivery system;</li>\r\n 	<li dir=\"LTR\">Direct resources to ensure healthy and safe environment for Dubai population;</li>\r\n 	<li dir=\"LTR\">Promote public and private collaboration in Healthcare;</li>\r\n 	<li dir=\"LTR\">Foster innovation across the continuum of care;</li>\r\n 	<li dir=\"LTR\">Revamp the governance structure of DHA; and</li>\r\n 	<li dir=\"LTR\">Establish efficient decision support systems by ensuring an integrated data platform.</li>\r\n</ol>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong><img class=\"wp-image-8098 alignright\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/08/shutterstock_356309201-1-958x1024.jpg\" alt=\"\" width=\"412\" height=\"441\" />Unified process for managing the health of Expo visitors</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">DHA has developed a service charter for the Emirate of Dubai especially for Expo 2020 which caters for the needs of customers, visitors, and investors. Prior to the commencement of Expo 2020, DHA will create and use multiple communications channels to raise awareness of it’s commitment to providing information regarding the availability of health insurance, healthcare services, medical tourism and highlighting Dubai as a leading healthcare hub.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">For participants and visitors requiring a visa (which in-turn requires having a medical fitness examination) DHA will provide medical ﬁtness services in an innovative way to ensure that the experience upon arrival is fast and efficient. This is expected to include processing visitors through an airport clinic upon arrival into the emirate, and a process to link all medical reports with the uniﬁed electronic ﬁle and the public health control system.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">While staying in Dubai, DHA will provide primary healthcare services, emergency services and specialised medical services through it’s integrated hospital network of facilities and clinics. It is also expected to have a clinic on-site at Expo 2020, which again will link all medical reports with the uniﬁed electronic ﬁle system and the public health control system.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">When the visitor then leaves the country DHA will provide all health reports to the visitor through a secure electronic portal called \"my chart\".</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Priority projects and initiatives of DHA that are related to Expo 2020</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">In line with the key strategic objectives DHA is in the process of rolling-out identified priority projects and initiatives related to Expo 2020.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Hasana</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Public Health Surveillance Network that aims to monitor and reduce the spread of infectious diseases, follow up basic vaccinations and manage vaccination campaigns in Dubai.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Sheryan</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">A network of healthcare specialists among the UAE’s health authorities as the only source of approved data for the issuance of temporary medical licenses to some professionals enabling them to take care of the needs of exhibitors and visitors at Expo 2020.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Dubai Heart Safe City Initiative</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Developing an effective response system to make Dubai the \"Heart Safe City\" in the world by adopting healthy innovations to combat heart attacks.<b></b></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Salama</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The uniﬁed electronic medical ﬁle The uniﬁed electronic medical ﬁle that aims to create a uniﬁed electronic record for each patient, available in all the centers of DHA. It also provides doctors with accurate data on patients to help them in decision making, to achieve the best medical outcomes.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Strategy for Investment in the Health Care Sector Strategy for investment in the health care sector and partnership with the private sector, including investment in the Emirate and the service of Expo 2020</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Salem</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">An integrated intelligent system designed to improve the customer’s journey, reduce waiting time, and provide all services in one place, with the best methods, electronic systems and smart technologies.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Dubai Health Experience</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">A web site which will include a variety of travel information including how to obtain a UAE visa (if required), in addition to the option of booking the hotel and the round-trip tickets on Emirates Airlines. The site includes more than 17 hospitals, 45 health facilities and more than 600 health packages.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Health Facilities Performance Assessment System</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">A smart system measuring the performance of all health facilities in Dubai including an integrated star rating system that will be available for the public in the emirate.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>DHA Central Call Center</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">A central Call Center as DHA’s ﬁrst line of customer service, responding to customer’s inquires, booking medical appointments and ease the communication of customers with DHA through telephone, website and social media channels.</p>\r\n<em>Disclosed Source: DHA Expo 2020 DHA Contribution &amp; Support Framework</em>\r\n&nbsp;<p dir=\"LTR\" align=\"LEFT\"><strong><img class=\"wp-image-8099 alignright\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/08/shutterstock_242389561.jpg\" alt=\"\" width=\"552\" height=\"310\" /></p>\r\n&nbsp;<p dir=\"LTR\" align=\"LEFT\">Medical tourism and innovation</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Dubai seeks to establish itself as a global hub for health tourism and innovation. In order to realise these objectives it is critical that the government of Dubai and DHA have a clear vision and strategy which will utilise Expo 2020 as a showcase for its services.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Recent legislative changes should improve the attractiveness of the emirate as a destination for medical tourism and innovation. Developments include new telehealth regulations, and initiatives based around the concept of ‘wellness’, that in turn are aligned with the ‘Emirates Vision 2021’ and emphasise the importance of preventive medicine to combat an increase in the prevalence of lifestyle-related diseases, and to identify and treat cancer, which is the third-leading cause of death in the country, after heart disease and accidents.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Public Private Partnerships</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The DHA Investment Strategy 2017- 2020 has created an investment strategy that \"Promote[s] Dubai as a viable and competitive hub for Investment In healthcare that address the needs of the Emirate and the future opportunities, and provide the best service for Investors and enable sustainable public-private model[s] in Dubai.\" Initiatives range from creating incentives to promote public private partnership (\"PPP\") investment, to reviewing and implementing regulatory changes that might encourage investment. A new piece of legislation is expected to be published later this year regarding PPPs in healthcare projects. These new and rapid changes are creating an attractive opportunity for foreign investment.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Conclusion</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">DHA has adopted a series of initiatives that will create a service delivery network of healthcare services for the Expo 2020 event, but that will also create opportunities for inward investment into the medical tourism and innovation strategy, thus ensuring it’s own Expo legacy.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Al Tamimi &amp; Company’s healthcare team regularly advises on Middle East healthcare strategy, regulatory developments, and commercial matters and provides key support to our Expo 2020 practice group. For further information, please contact expo2020@tamimi.com).</em></p>'),
	(257903,25061,'MetaValueOld','<p dir=\"LTR\" align=\"LEFT\"><img class=\"wp-image-7968 alignleft\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/07/13-1024x681.jpg\" alt=\"\" width=\"487\" height=\"324\" />The new DIFC Companies Law is expected to come into force in August / September 2018. The new law will make a number of major changes to the rules governing DIFC-established companies, including:</p>\r\n\r\n<ol>\r\n 	<li dir=\"LTR\">the removal of the category of limited liability companies (as an option to the company limited by shares) and the introduction of differing regulatory requirements imposed on private and public companies respectively; and</li>\r\n 	<li dir=\"LTR\">the introduction of more detailed and explicit provisions imposing and regulating directors’ duties.</li>\r\n</ol>\r\n<p dir=\"LTR\" align=\"LEFT\">This article concerns the most innovative feature of the new law, the introduction of a legal framework for corporate schemes of arrangement.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">A scheme of arrangement is a process which empowers companies to enter an array of binding arrangements and agreements with its shareholders and/or creditors as classes. Where an arrangement is supported by 75% of the relevant classes of creditors or shareholders, the Court has power to sanction it and to bind all the stakeholders, including any dissenting minority. Schemes of arrangement are used extensively in England and in other common law jurisdictions, so it is a welcome innovation for DIFC companies.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The legal process for schemes of arrangement was originally developed in England but the new DIFC provisions are closely modelled on Jersey law, which is less detailed and prescriptive than the legislation now applying in England and Wales. The DIFC provisions relating to compromises and arrangements can be found in Articles 124 to 126 of the new Companies Law.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>How are Schemes Commonly Used?</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Schemes of arrangement are extremely flexible and the legislation does not restrict the form or content of the compromise or arrangement. Here are a number of examples of how schemes have been employed successfully in the UK:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\"><strong>Reducing debt and carrying out debt for equity swaps</strong></li>\r\n</ul>\r\n<p style=\"padding-left: 60px;\">Sometimes, a scheme of arrangement can be used to reduce the value of claims from both secured and unsecured creditors. Debt reduction can occur as part of a compromise, where creditors agree to accept a pro-rated percentage of the total debt so the company can continue to be viable. Often, in these circumstances, a creditor will ‘swap’ some of its debt in the company for equity in a new holding company. This reduces the debt of the operating company, allows it to continue trading and provides for a cash injection into the new holding company.</p>\r\n<p style=\"padding-left: 60px;\"><em>For example, in the Countrywide plc case, the company had issued senior secured loan notes worth £470 million which were reduced to £175 million and the holder of the senior secured loan notes agreed to inject capital into a new holding company in return for 35% of the equity in that company. In addition, it was agreed to convert unsecured loan notes worth £170 million to 5% of equity in the new holding company. The proposal was supported by the majority of the loan note holders and so the court approved the agreement.</em></p>\r\n\r\n<ul>\r\n 	<li><em><strong>An alternative to liquidation</strong></em></li>\r\n</ul>\r\n<p style=\"padding-left: 60px;\"><em>Schemes can also be used as an alternative to a formal liquidation process. The terms of the scheme will prescribe a distribution of the company’s assets between the creditors. This can be helpful when there are a number of contingent claims which may be difficult to quantify and would delay the liquidation process or where assets of a group of companies are difficult to identify as owned by a particular member of a group.</em></p>\r\n\r\n<ul>\r\n 	<li><em><strong>Where the company seeks to assure future solvency by \"ring fencing\" contingent claims</strong></em></li>\r\n</ul>\r\n<p style=\"padding-left: 60px;\">In <em>Re Cape plc &amp; Ors</em>, Cape plc and its subsidiary companies called a meeting of creditors to approve a solvent scheme of arrangement.</p>\r\n<p style=\"padding-left: 60px;\">Cape plc’s group business was asbestos mining and the manufacture, distribution and installation of asbestos products. The company was solvent, but faced many future contingent claims due to its employees’ past exposure to asbestos dust. Given the slow emergence of medical problems caused by exposure to asbestos, it was clear that the company would face claims in the future, but at the time of proposing the scheme noone could quantify the value of these claims with precision.</p>\r\n<p style=\"padding-left: 60px;\">The scheme of arrangement was designed to protect the group’s ongoing businesses from the asbestos claims, whilst at the same time diverting a percentage of its earnings into a sinking fund for the payment of those claims. The Court approved the proposed scheme, thereby allowing Cape plc to create a subsidiary company to deal with all present and future claims, effectively ring-fencing the rest of the Cape group from the disruptive effect of the claims.</p>\r\n\r\n<ul>\r\n 	<li><strong>Takeovers</strong></li>\r\n</ul>\r\n<p style=\"padding-left: 60px;\">Schemes of arrangement are used in the UK as an alternative way to implement a company takeover rather than following the City Code on Takeovers and Mergers Takeover Regulations (\"UK Takeover Regulations\"). Consent is only required from 75% of the shareholders for all shareholders to be bound and liable to compulsory acquisition; whereas 90% of the shareholders are required to consent under the UK Takeover Regulations to achieve a ‘squeeze-out’.</p>\r\n<p style=\"padding-left: 60px;\">An example of this in practice is the case of TDG plc. There the company applied for an order under the Companies Act 2006 sanctioning a scheme of arrangement, the object of which was to facilitate the acquisition of shares in the company by a buyer. A minority shareholder opposed the approval of the scheme. The scheme was approved by the court as reasonable so all shareholders were bound to transfer their shares to the acquiring company.</p>\r\n<p style=\"padding-left: 60px;\">The provisions of the old DIFC Companies law in respect of takeovers contain the same threshold to that of the UK Takeover Regulations (consent of 90% of the shareholders). The introduction of the New Law will enable all shareholders to be bound by the arrangement with only the consent of 75% of the shareholders. This is likely to facilitate takeovers in the DIFC, particularly in circumstances where there are dissenting or ‘lost’ shareholders. The provisions can also be used to implement a ‘squeeze-out’.</p>\r\n\r\n<ul>\r\n 	<li><strong>Demergers</strong></li>\r\n</ul>\r\n<p style=\"padding-left: 60px;\">In the case of BGEO Group plc the applicant company applied for the court to sanction a scheme of arrangement to split its investment business from its banking business. The scheme involved the insertion of a new holding company and, once the scheme had taken effect, the demerger of the group’s two businesses. The new holding company would undertake a swap reduction of capital for the purpose of demerging the investment business. The shareholder agreed to swap their shares in the applicant company for shares in the new holding company on a one-for-one basis.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Benefits to companies incorporated in the DIFC</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The new provisions will open up wide range of flexible options for restructuring debt or equity. In certain scenarios, additional requirements of the DIFC companies law will also need to be taken into account, in particular the rules governing any return of capital to shareholders, so there may need to be parallel compliance.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>What types of compromises or arrangements will be approved?</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Subject to the required formalities and approvals, schemes can be used to bind all shareholders of the relevant class(es) of creditors and/or shareholders to almost any type of reorganisation. Nothing in the new law limits the subject matter of a scheme. In theory a scheme could be a compromise or arrangement between a company and its creditors or shareholders about anything which they can properly agree amongst themselves.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">However, a scheme must be a ‘genuine’ and ‘effective’ arrangement or compromise. This means that the shareholders and creditors of the company which participate in the scheme must obtain some advantage in compensation for the scheme’s alteration of their pre-scheme rights entitlements.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>The procedure</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">For a company to obtain a sanctioned compromise or arrangement in accordance with the New Law, the following steps will need to be undertaken:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">The person proposing the scheme of arrangement must seek a court order to convene creditor and/or shareholder meetings (as relevant) in order to vote on the proposed scheme;</li>\r\n 	<li dir=\"LTR\">The notice calling for the meeting whether by letter or advertisement, must include a statement containing details of; (i) the effect of the proposed compromise or arrangements, (ii) material interests of the directors of the company in the arrangement, (iii) if any debentures have been issued by the company how the arrangement or compromise would affect the rights of the debenture holders; and (iv) any other matter which would have a material impact on the company, its creditors and shareholder.</li>\r\n 	<li dir=\"LTR\">Compromise or arrangement schemes require approval by at least 75% in value of each class of the creditors who vote on the compromise or arrangements or the holders of 75% of the voting rights of the shareholders or class of shareholders, as the case may be, present and voting either in person or by proxy at the meeting;</li>\r\n 	<li dir=\"LTR\">After the scheme has been approved by the shareholders or creditor, it must then be sanctioned by the court;</li>\r\n 	<li dir=\"LTR\">Any interested shareholder or creditor can be represented when the court considers the application to sanction the scheme, and may argue for or against the sanctioning of the scheme.</li>\r\n 	<li dir=\"LTR\">A copy of the court order must then be sent to the Registrar and the Registrar will ensure that a copy of the court order is included in the company’s articles of association.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">Applications for a scheme of arrangement can be made by the company, a creditor or shareholder or in the case of a company being wound up its liquidator.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Conclusion</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The introduction of schemes of arrangement in the DIFC paves the way to greater flexibility in implementing a range of sophisticated deals within the DIFC from equity swaps, to demergers, to corporate turnarounds.</p>\r\n<em>Al Tamimi &amp; Company’s Corporate and Commercial team regularly advises on restructuring and take over arrangements. For further information please contact Anna Robinson, a.robinson@tamimi.com or Richard Catling, r.catling@tamimi.com.</em>'),
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	(264937,25642,'PostUrl','http://localhost:8888/tamimi/law-update-articles/stuck-between-a-rock-and-a-hard-place-the-uks-unexplained-wealth-orders-and-the-effect-in-the-middle-east/'),
	(264938,25642,'EditorLinkPost','http://localhost:8888/tamimi/wp-admin/post.php?post=7940&amp;action=edit'),
	(261704,25376,'MetaValueOld','<p dir=\"LTR\" align=\"LEFT\"><img class=\"aligncenter size-full wp-image-8077\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/08/shutterstock_732097636.jpg\" alt=\"\" width=\"3008\" height=\"1379\" /></p>\r\n<p dir=\"LTR\" align=\"LEFT\">It is rare for arbitrators to be sued in the UAE although the prospect of such steps being taken has garnered much press interest in recent times. The new 2018 arbitration law (UAE Federal Arbitration Law No. 6 of 2018) does not address the issue, and the old law (Articles 208 to 218 of UAE Civil Procedure Law No. 11 of 1992) merely stated that an arbitrator could be liable for damages if the arbitrator resigns without a good reason. However, a recent Dubai Court of Cassation judgment (No. 484 of 2017) has considered the issue and provided helpful guidance. This article considers this important judgment and its implications.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Background</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">A developer, Al Sayyah &amp; Sons Investments LLC (the \"Developer\"), sold various units off-plan in a tower it was developing in Dubai Marina. Various purchasers assigned their rights under the sale and purchase agreements they had with the Developer to a real estate finance company, Amlak.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Amlak initiated DIAC arbitration proceedings against the Developer, alleging that the units (now built) were not in conformity with the agreements.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In July 2012 DIAC appointed the sole arbitrator (\"Arbitrator No.1\"). He issued a partial award in November 2013 determining jurisdictional issues. Arbitrator No.1 resigned in December 2013 due to issues regarding impartiality. Arbitrator No.2 was subsequently appointed as the sole arbitrator by DIAC. Arbitrator No 2 issued a final award against the Developer. The award ordered that the Developer pay Amlak AED 46.5m plus interest, as well as AED 466,788 in arbitration costs. Arbitrator No 2 issued a supplemental award to correct accounting calculation errors in the final award which reduced the amount payable to AED 42.7m.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The final award was ratified by the Dubai Courts and an amount of AED 42.7m was paid in full by the Developer to Amlak.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>The Claim Before the Courts</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Developer then filed a claim before the Dubai Court of First Instance alleging that the two arbitrators had committed material errors in their respective awards. It was claimed that:</p>\r\n\r\n<ol>\r\n 	<li dir=\"LTR\">The two arbitrators lacked capacity to decide the dispute.</li>\r\n 	<li dir=\"LTR\">Arbitrator No.1 erred in his award on jurisdiction by holding that Al Sayyah &amp; Sons Investments LLC and Al Sayyah Investments were the same legal entity. Arbitrator No.2 made the same error by relying on and adopting the terms of the partial award in issuing the final award.</li>\r\n 	<li dir=\"LTR\">The Developer was not a party to the agreements containing the arbitration clause.</li>\r\n 	<li dir=\"LTR\">Arbitrator No.2 had denied the Developer’s right to submit its defence as Amlak should have been ordered to submit the original agreements.</li>\r\n 	<li dir=\"LTR\">Arbitrator No.2 had altered the terms of the agreement in order to render the final award and had failed to address the issue of lack of jurisdiction.</li>\r\n 	<li dir=\"LTR\">Arbitrator No.2 failed to include the names of the unit owners and misrepresented the unit area data as set out in the architect’s report in his supplemental award.</li>\r\n 	<li dir=\"LTR\">Arbitrator No.2 failed to take into consideration the relevant Land Department documents delineating the gross area of the units when making the final award.</li>\r\n</ol>\r\n<p dir=\"LTR\" align=\"LEFT\">For the above reasons the Developer asserted that they were wrongfully ordered to pay Amlak the AED 42m and sought that both arbitrators be held jointly and severally liable to repay this money to the Developer.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Court of First Instance dismissed the Developer’s claim in January 2017. This was upheld by the Dubai Court of Appeal in September 2017. The Developer appealed to the Dubai Court of Cassation.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>The Dubai Court of Cassation judgment</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">On 21 December 2017 the Court of Cassation dismissed the appeal. The Court of Cassation explained that in order for an arbitrator to be found liable in tort, the following elements had to be proved by the claimant:</p>\r\n\r\n<ol>\r\n 	<li dir=\"LTR\">There had been an act or omission by the arbitrator;</li>\r\n 	<li dir=\"LTR\">Harm was incurred by the claimant; and</li>\r\n 	<li dir=\"LTR\">There was a causal link between the act or omission and the harm caused.</li>\r\n</ol>\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Significantly, the Court then went further and stated that the act or omission would need to be \"a serious mistake tainted by deceit, fraud, collusion with the opponent, or refusal to act without acceptable justification. An ordinary mistake or negligence, whether in judgment or procedure, is not sufficient to hold the arbitrator liable unless it is a serious mistake or fraud\".</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Court held that it is for the trial court to examine the evidence and determine whether an arbitrator is liable. In this case the Court held that the errors which the Developer alleged were errors of judgment for which the two arbitrators could not be sued.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong><img class=\"alignright size-large wp-image-8076\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/08/shutterstock_1087401539-1024x683.jpg\" alt=\"\" width=\"640\" height=\"427\" />A Step in the Right Direction</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Court found that it was not enough for the claimant to demonstrate that an arbitrator made an error that had caused loss to the claimant. The error has to be a ‘serious mistake’ or one tainted by fraud or deceit or otherwise inexplicable. This suggests a high-threshold and one that should give comfort to arbitrators.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">This standard of civil liability is in tune with the threshold found in other laws. Both the DIFC and the ADGM have arbitration laws stating that an arbitrator will not be liable ‘unless they are shown to have caused damage by conscious and deliberate wrongdoing’ (Article 22 of the DIFC Arbitration Law 2008; Article 23 of the ADGM Arbitration Regulations 2015).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Many arbitral rules contain terms stating that the parties agree not to sue the arbitrator. This includes the DIAC rules which state, at Article 40, that no member of a tribunal shall be liable in connection with the arbitration. It is not clear why this was not referred to by the Court in its judgment, but its absence leaves open the question of whether an arbitrator’s liability under the law can be further limited by the consent of the parties.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">This Court of Cassation judgment is definitely a positive step forward. It should make arbitrator’s feel more confident that whilst they are not immune from suit, they are protected from spurious claims brought by disgruntled parties.</p>\r\n&nbsp;\r\n\r\n<em>Al Tamimi uniquely possesses the capability to litigate before both of the financial free zone courts and conduct litigation before the UAE Federal Courts and the courts of each individual Emirate. <a href=\"http://localhost:8888/tamimi/practice/arbitration/\">Al Tamimi &amp; Company’s Arbitration team</a> regularly advises on international investment and commercial arbitration. For further information, please contact Dr. Hassan Arab (<a href=\"mailto:h.arab@tamimi.com\">h.arab@tamimi.com</a>) or Dalal Al Houti (<a href=\"mailto:D.Alhouti@tamimi.com\">D.Alhouti@tamimi.com</a>).</em>'),
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	(261706,25376,'EditorLinkPost','http://localhost:8888/tamimi/wp-admin/post.php?post=7929&amp;action=edit'),
	(261707,25376,'ReportText','<p dir=\"LTR\" align=\"LEFT\"><img class=\"aligncenter size-full wp-image-8077\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/08/shutterstock_732097636.jpg\" alt=\"\" width=\"3008\" height=\"1379\" /></p>\r\n<p dir=\"LTR\" align=\"LEFT\">It is rare for arbitrators to be sued in the UAE although the prospect of such steps being taken has garnered much press interest in recent times. The new 2018 arbitration law (UAE Federal Arbitration Law No. 6 of 2018) does not address the issue, and the old law (Articles 208 to 218 of UAE Civil Procedure Law No. 11 of 1992) merely stated that an arbitrator could be liable for damages if the arbitrator resigns without a good reason. However, a recent Dubai Court of Cassation judgment (No. 484 of 2017) has considered the issue and provided helpful guidance. This article considers this important judgment and its implications.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Background</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">A developer, Al Sayyah &amp; Sons Investments LLC (the \"Developer\"), sold various units off-plan in a tower it was developing in Dubai Marina. Various purchasers assigned their rights under the sale and purchase agreements they had with the Developer to a real estate finance company, Amlak.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Amlak initiated DIAC arbitration proceedings against the Developer, alleging that the units (now built) were not in conformity with the agreements.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In July 2012 DIAC appointed the sole arbitrator (\"Arbitrator No.1\"). He issued a partial award in November 2013 determining jurisdictional issues. Arbitrator No.1 resigned in December 2013 due to issues regarding impartiality. Arbitrator No.2 was subsequently appointed as the sole arbitrator by DIAC. Arbitrator No 2 issued a final award against the Developer. The award ordered that the Developer pay Amlak AED 46.5m plus interest, as well as AED 466,788 in arbitration costs. Arbitrator No 2 issued a supplemental award to correct accounting calculation errors in the final award which reduced the amount payable to AED 42.7m.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The final award was ratified by the Dubai Courts and an amount of AED 42.7m was paid in full by the Developer to Amlak.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>The Claim Before the Courts</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Developer then filed a claim before the Dubai Court of First Instance alleging that the two arbitrators had committed material errors in their respective awards. It was claimed that:</p>\r\n\r\n<ol>\r\n 	<li dir=\"LTR\">The two arbitrators lacked capacity to decide the dispute.</li>\r\n 	<li dir=\"LTR\">Arbitrator No.1 erred in his award on jurisdiction by holding that Al Sayyah &amp; Sons Investments LLC and Al Sayyah Investments were the same legal entity. Arbitrator No.2 made the same error by relying on and adopting the terms of the partial award in issuing the final award.</li>\r\n 	<li dir=\"LTR\">The Developer was not a party to the agreements containing the arbitration clause.</li>\r\n 	<li dir=\"LTR\">Arbitrator No.2 had denied the Developer’s right to submit its defence as Amlak should have been ordered to submit the original agreements.</li>\r\n 	<li dir=\"LTR\">Arbitrator No.2 had altered the terms of the agreement in order to render the final award and had failed to address the issue of lack of jurisdiction.</li>\r\n 	<li dir=\"LTR\">Arbitrator No.2 failed to include the names of the unit owners and misrepresented the unit area data as set out in the architect’s report in his supplemental award.</li>\r\n 	<li dir=\"LTR\">Arbitrator No.2 failed to take into consideration the relevant Land Department documents delineating the gross area of the units when making the final award.</li>\r\n</ol>\r\n<p dir=\"LTR\" align=\"LEFT\">For the above reasons the Developer asserted that they were wrongfully ordered to pay Amlak the AED 42m and sought that both arbitrators be held jointly and severally liable to repay this money to the Developer.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Court of First Instance dismissed the Developer’s claim in January 2017. This was upheld by the Dubai Court of Appeal in September 2017. The Developer appealed to the Dubai Court of Cassation.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>The Dubai Court of Cassation judgment</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">On 21 December 2017 the Court of Cassation dismissed the appeal. The Court of Cassation explained that in order for an arbitrator to be found liable in tort, the following elements had to be proved by the claimant:</p>\r\n\r\n<ol>\r\n 	<li dir=\"LTR\">There had been an act or omission by the arbitrator;</li>\r\n 	<li dir=\"LTR\">Harm was incurred by the claimant; and</li>\r\n 	<li dir=\"LTR\">There was a causal link between the act or omission and the harm caused.</li>\r\n</ol>\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Significantly, the Court then went further and stated that the act or omission would need to be \"a serious mistake tainted by deceit, fraud, collusion with the opponent, or refusal to act without acceptable justification. An ordinary mistake or negligence, whether in judgment or procedure, is not sufficient to hold the arbitrator liable unless it is a serious mistake or fraud\".</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Court held that it is for the trial court to examine the evidence and determine whether an arbitrator is liable. In this case the Court held that the errors which the Developer alleged were errors of judgment for which the two arbitrators could not be sued.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong><img class=\"alignright size-large wp-image-8076\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/08/shutterstock_1087401539-1024x683.jpg\" alt=\"\" width=\"640\" height=\"427\" />A Step in the Right Direction</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Court found that it was not enough for the claimant to demonstrate that an arbitrator made an error that had caused loss to the claimant. The error has to be a ‘serious mistake’ or one tainted by fraud or deceit or otherwise inexplicable. This suggests a high-threshold and one that should give comfort to arbitrators.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">This standard of civil liability is in tune with the threshold found in other laws. Both the DIFC and the ADGM have arbitration laws stating that an arbitrator will not be liable ‘unless they are shown to have caused damage by conscious and deliberate wrongdoing’ (Article 22 of the DIFC Arbitration Law 2008; Article 23 of the ADGM Arbitration Regulations 2015).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Many arbitral rules contain terms stating that the parties agree not to sue the arbitrator. This includes the DIAC rules which state, at Article 40, that no member of a tribunal shall be liable in connection with the arbitration. It is not clear why this was not referred to by the Court in its judgment, but its absence leaves open the question of whether an arbitrator’s liability under the law can be further limited by the consent of the parties.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">This Court of Cassation judgment is definitely a positive step forward. It should make arbitrator’s feel more confident that whilst they are not immune from suit, they are protected from spurious claims brought by disgruntled parties.</p>\r\n&nbsp;\r\n\r\n<em>Al Tamimi uniquely possesses the capability to litigate before both of the financial free zone courts and conduct litigation before the UAE Federal Courts and the courts of each individual Emirate. <a href=\"http://localhost:8888/tamimi/practice/arbitration/\">Al Tamimi &amp; Company’s Arbitration team</a> regularly advises on international investment and commercial arbitration. For further information, please contact Dr. Hassan Arab (<a href=\"mailto:h.arab@tamimi.com\">h.arab@tamimi.com</a>) or Dalal Al Houti (<a href=\"mailto:D.Alhouti@tamimi.com\">D.Alhouti@tamimi.com</a>).</em>|<p dir=\"LTR\" align=\"LEFT\"><img class=\"aligncenter size-full wp-image-8077\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/08/shutterstock_732097636.jpg\" alt=\"\" width=\"3008\" height=\"1379\" /></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">It is rare for arbitrators to be sued in the UAE although the prospect of such steps being taken has garnered much press interest in recent times. The new 2018 arbitration law (UAE Federal Arbitration Law No. 6 of 2018) does not address the issue, and the old law (Articles 208 to 218 of UAE Civil Procedure Law No. 11 of 1992) merely stated that an arbitrator could be liable for damages if the arbitrator resigns without a good reason. However, a recent Dubai Court of Cassation judgment (No. 484 of 2017) has considered the issue and provided helpful guidance. This article considers this important judgment and its implications.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Background</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">A developer, Al Sayyah &amp; Sons Investments LLC (the \"Developer\"), sold various units off-plan in a tower it was developing in Dubai Marina. Various purchasers assigned their rights under the sale and purchase agreements they had with the Developer to a real estate finance company, Amlak.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Amlak initiated DIAC arbitration proceedings against the Developer, alleging that the units (now built) were not in conformity with the agreements.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In July 2012 DIAC appointed the sole arbitrator (\"Arbitrator No.1\"). He issued a partial award in November 2013 determining jurisdictional issues. Arbitrator No.1 resigned in December 2013 due to issues regarding impartiality. Arbitrator No.2 was subsequently appointed as the sole arbitrator by DIAC. Arbitrator No 2 issued a final award against the Developer. The award ordered that the Developer pay Amlak AED 46.5m plus interest, as well as AED 466,788 in arbitration costs. Arbitrator No 2 issued a supplemental award to correct accounting calculation errors in the final award which reduced the amount payable to AED 42.7m.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The final award was ratified by the Dubai Courts and an amount of AED 42.7m was paid in full by the Developer to Amlak.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>The Claim Before the Courts</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Developer then filed a claim before the Dubai Court of First Instance alleging that the two arbitrators had committed material errors in their respective awards. It was claimed that:</p>\r\n\r\n<ol>\r\n 	<li dir=\"LTR\">The two arbitrators lacked capacity to decide the dispute.</li>\r\n 	<li dir=\"LTR\">Arbitrator No.1 erred in his award on jurisdiction by holding that Al Sayyah &amp; Sons Investments LLC and Al Sayyah Investments were the same legal entity. Arbitrator No.2 made the same error by relying on and adopting the terms of the partial award in issuing the final award.</li>\r\n 	<li dir=\"LTR\">The Developer was not a party to the agreements containing the arbitration clause.</li>\r\n 	<li dir=\"LTR\">Arbitrator No.2 had denied the Developer’s right to submit its defence as Amlak should have been ordered to submit the original agreements.</li>\r\n 	<li dir=\"LTR\">Arbitrator No.2 had altered the terms of the agreement in order to render the final award and had failed to address the issue of lack of jurisdiction.</li>\r\n 	<li dir=\"LTR\">Arbitrator No.2 failed to include the names of the unit owners and misrepresented the unit area data as set out in the architect’s report in his supplemental award.</li>\r\n 	<li dir=\"LTR\">Arbitrator No.2 failed to take into consideration the relevant Land Department documents delineating the gross area of the units when making the final award.</li>\r\n</ol>\r\n<p dir=\"LTR\" align=\"LEFT\">For the above reasons the Developer asserted that they were wrongfully ordered to pay Amlak the AED 42m and sought that both arbitrators be held jointly and severally liable to repay this money to the Developer.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Court of First Instance dismissed the Developer’s claim in January 2017. This was upheld by the Dubai Court of Appeal in September 2017. The Developer appealed to the Dubai Court of Cassation.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>The Dubai Court of Cassation judgment</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">On 21 December 2017 the Court of Cassation dismissed the appeal. The Court of Cassation explained that in order for an arbitrator to be found liable in tort, the following elements had to be proved by the claimant:</p>\r\n\r\n<ol>\r\n 	<li dir=\"LTR\">There had been an act or omission by the arbitrator;</li>\r\n 	<li dir=\"LTR\">Harm was incurred by the claimant; and</li>\r\n 	<li dir=\"LTR\">There was a causal link between the act or omission and the harm caused.</li>\r\n</ol>\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Significantly, the Court then went further and stated that the act or omission would need to be \"a serious mistake tainted by deceit, fraud, collusion with the opponent, or refusal to act without acceptable justification. An ordinary mistake or negligence, whether in judgment or procedure, is not sufficient to hold the arbitrator liable unless it is a serious mistake or fraud\".</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Court held that it is for the trial court to examine the evidence and determine whether an arbitrator is liable. In this case the Court held that the errors which the Developer alleged were errors of judgment for which the two arbitrators could not be sued.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong><img class=\"alignright  wp-image-8076\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/08/shutterstock_1087401539-1024x683.jpg\" alt=\"\" width=\"492\" height=\"328\" />A Step in the Right Direction</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Court found that it was not enough for the claimant to demonstrate that an arbitrator made an error that had caused loss to the claimant. The error has to be a ‘serious mistake’ or one tainted by fraud or deceit or otherwise inexplicable. This suggests a high-threshold and one that should give comfort to arbitrators.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">This standard of civil liability is in tune with the threshold found in other laws. Both the DIFC and the ADGM have arbitration laws stating that an arbitrator will not be liable ‘unless they are shown to have caused damage by conscious and deliberate wrongdoing’ (Article 22 of the DIFC Arbitration Law 2008; Article 23 of the ADGM Arbitration Regulations 2015).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Many arbitral rules contain terms stating that the parties agree not to sue the arbitrator. This includes the DIAC rules which state, at Article 40, that no member of a tribunal shall be liable in connection with the arbitration. It is not clear why this was not referred to by the Court in its judgment, but its absence leaves open the question of whether an arbitrator’s liability under the law can be further limited by the consent of the parties.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">This Court of Cassation judgment is definitely a positive step forward. It should make arbitrator’s feel more confident that whilst they are not immune from suit, they are protected from spurious claims brought by disgruntled parties.</p>\r\n&nbsp;\r\n\r\n<em>Al Tamimi uniquely possesses the capability to litigate before both of the financial free zone courts and conduct litigation before the UAE Federal Courts and the courts of each individual Emirate. <a href=\"http://localhost:8888/tamimi/practice/arbitration/\">Al Tamimi &amp; Company’s Arbitration team</a> regularly advises on international investment and commercial arbitration. For further information, please contact Dr. Hassan Arab (<a href=\"mailto:h.arab@tamimi.com\">h.arab@tamimi.com</a>) or Dalal Al Houti (<a href=\"mailto:D.Alhouti@tamimi.com\">D.Alhouti@tamimi.com</a>).</em>'),
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	(261736,25379,'PostTitle','Enforcement and Challenges to Arbitral Awards under the New Arbitration Law in the UAE'),
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	(261758,25381,'PostTitle','Enforcement and Challenges to Arbitral Awards under the New Arbitration Law in the UAE'),
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	(261760,25381,'PostDate','2018-07-31 10:04:57'),
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	(261768,25382,'PostTitle','Enforcement and Challenges to Arbitral Awards under the New Arbitration Law in the UAE'),
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	(261771,25382,'PostDate','2018-07-31 10:04:57'),
	(261772,25382,'PostUrl','http://localhost:8888/tamimi/law-update-articles/enforcement-and-challenges-to-arbitral-awards-under-the-new-arbitration-law-in-the-uae/'),
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	(261775,25382,'MetaValueNew','<p dir=\"LTR\" align=\"LEFT\"><img class=\"size-full wp-image-7963 alignleft\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/07/1.jpg\" alt=\"\" width=\"5000\" height=\"1427\" /></p>\r\n<p dir=\"LTR\" align=\"LEFT\">On 03 May 2018 the UAE enacted Federal Law No. 6 of 2018 (\"the New Law\"), as published in the Official Gazette No 630 of 15 May 2018. The New Law replaced certain arbitration provisions found in the UAE Civil Procedures Law No. 11 of 1992, particularly Articles 203-218 (\"the former arbitration provisions\"). The New Law took effect after a month its publication, accordingly applying from mid-June 2018.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The enactment of the New Law confirms the UAE’s commitment to bring its arbitration law in line with internationally accepted best practice. In this article we consider key provisions of the New Law, with particular focus on the enforcement of arbitration awards.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Key Aspects of the New Law</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Article 2 outlines the scope of application of the New Law. It states that it applies to (i) any arbitration conducted in the UAE, unless the parties agree to another law governing the arbitration proceedings; (ii) any international arbitrations conducted outside the UAE, where the parties agree to apply the New Law to govern such proceedings; and (iii) to any arbitration arising from a dispute in respect of a legal relationship governed by UAE law, save where excepted by special provision.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><em>A significant feature of the New Law is Article 3, which defines ‘international arbitration’. An arbitration is international if ‘the parties have, at the time of conclusion of the arbitration agreement, their places of business in different States’.</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Moreover, an arbitration is deemed to be international, if the place of arbitration, or the place of performance of the contractual obligations, or the subject matter of the dispute is connected with more than one country, or if the parties have expressly agreed that the subject matter of the arbitration agreement relates to more than one country. This new feature did not exist in the former arbitration provisions and which were limited to domestic and foreign arbitrations only. They did not consider any aspects of international arbitration, even in cases where the domestic arbitration contained elements of international arbitration. The New Law does not, however, confer any additional advantages for international arbitration in terms of the enforcement of an award, as the procedure to ratify an international award is similar to that of domestic awards. The New Law does, however, provide the parties with freedom to choose the New Law to govern the arbitration proceedings, even if the arbitration proceedings are conducted outside the UAE.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Chapter II Article 4 of the New Law deals with the parties’ capacity to enter into an arbitration agreement. Similarly, Articles 5 to 8 of the New Law cover the form, autonomy and subject matter of arbitration agreements.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Unlike the former arbitration provisions, the New Law defines arbitration institutions and confers wide powers on these institutions if the parties to the arbitration agree to apply arbitration institutional rules. The New Law accordingly covers all types of arbitrations, regardless of it being ad-hoc, institutional or arbitration conducted through the Court.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Article 11 provides mechanisms where the parties fail to agree on the appointment of an arbitrator/tribunal. Under the former arbitration provisions (Article 204), in such circumstances, parties were required to file a Court application for direction - which was effectively similar to initiating full litigation proceedings. The New Law allows the parties simply to apply to the relevant authority, which is either the body authorized to administer the arbitration, or the Court.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Under the former arbitration provisions the grounds for challenging an arbitrator were similar to the grounds for the recusal or impleading of judges. The New Law, under Articles 14 and 15, changes this - providing specific grounds and procedures for challenging an arbitrator.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The New Law recognizes key principles and practices of international commercial arbitration including the principles of severability, Article 6(1), and competence-competence - Article 19(1).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Article 21 deals with the jurisdiction of the tribunal to issue interim or conservatory measures concerning arbitration proceedings, at the request of a party or on its own motion.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In contrast to the former arbitration provisions, Article 28 differentiates the ‘place of arbitration’ i.e. the seat of arbitration with which an award is legally connected, and the ‘venue of arbitration’ - where the arbitration sessions or hearings are conducted. Moreover, Article 41(6) provides that an award shall be considered as issued at the place of arbitration, as determined under Article 28, even if the tribunal signed an award outside the place of arbitration. The tribunal may conduct arbitration hearings and deliberations through modern means of communication (according to Article 28(2)(b)). Likewise, Article 35 provides an arbitral tribunal with the discretion to hear any witnesses, including expert witnesses, through modern means of communication.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Enforcement of Awards under the New Law</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Article 52 provides that an award issued under the New Law shall have res judicata status and be enforceable as a court judgment. The same article also states that an award must be ratified prior to its enforcement.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Unlike the former arbitration provisions, Article 55(1) states that a party seeking to enforce an award must submit an application to the Chief Justice of the relevant Court, together with supporting documents. The term ‘Court’ is defined as the Federal Court of Appeal or local Courts of Appeal in the UAE. Under Article 55(1), the Chief Justice of the Court (or any judges empowered by the Chief Justice) should issue an order confirming ratification and enforcement of the award within sixty days from the date of the submission of the application, unless any of the grounds for setting aside of the award exists under Article 53(1).</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Challenging the Decision against Enforcement of Awards</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Under Article 57, a party may challenge a decision of the Court on the ratification of the award, by filing a grievance before the Court within thirty days. Article 57 reads as follows:</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>\"A grievance may be filed against the Court’s decision to grant or deny enforcement of an arbitral award before the competent Court of Appeal within thirty days from the date following notification\".</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Article 57 does not confirm whether a decision of the ‘competent Court of Appeal’ is to be considered as final or if an aggrieved party could pursue an appeal before the Cassation Court. Considering the New Law does not provide for an appeal of the decision of the ‘competent Court of Appeal’ on the grievance presented under Article 57, it is our respectful view that the decision of the ‘competent Court of Appeal’ is likely to be deemed as final. Otherwise, this could lead to lengthy procedures and result in delays of enforcement of awards, which is against the core of objectives of the New Law.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Action to set aside Arbitration Awards</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Article 53 entitles a party to challenge the enforcement of an award by submitting an application before the Court under one or more grounds contained in Articles 53(1)(a) - (h). Further, Article 53(2) states that the Court shall set aside an award if the subject matter of the dispute is not capable of settlement, or if the award is in conflict with public order.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">An action to set aside an arbitration award must be submitted by a party within thirty days from the date of notification of such award, otherwise the action will be time barred under Article 54(2).</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Besides the option of filling an action to set aside an award under Article 53(1), a party seeking to challenge an award may also submit objections to ratifying the award before the Court during the process of ratification in accordance with Article 57. Accordingly, there are three options for a party to challenge the ratification and enforcement of an award:</p>\r\n\r\n<ol>\r\n 	<li dir=\"LTR\">file a case seeking to set aside an award under Article 53(1) before the Court of Appeal and this decision is subject to appeal before the Court of Cassation under Article 54(1);</li>\r\n 	<li dir=\"LTR\">present a defence to the Court objecting to the ratification and enforcement of the award during the process of ratification initiated by the award creditor under Article 55(1); or</li>\r\n 	<li dir=\"LTR\">submit a grievance against the Court’s decision to grant or deny enforcement under Article 57.</li>\r\n</ol>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Mechanism to Recognise and Enforce Foreign Awards</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The New Law does not expressly provide for the procedures applicable to the recognition and enforcement of foreign awards in the UAE. This begs the question - what procedures are applicable to the recognition of foreign arbitral awards in the UAE? Should a party seeking recognition apply to the Court of First Instance (the position prior to the enactment of the New Law) or should the parties follow the new procedures for ratifying awards as laid down under the New Law?</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Considering that Article 3 of the New York Convention requires Contracting States not to impose substantially more onerous conditions on the recognition and enforcement of foreign awards than are imposed on the enforcement of domestic awards, it is our view that the provisions of the New Law will apply for the recognition and enforcement of foreign awards. Further, the UAE is committed to fulfilling its obligations under applicable international conventions and treaties. It is accordingly inferred that a party seeking recognition of a foreign award should be required to submit an application to the Chief Justice of the Court in accordance with Article 55(1), together with the documents detailed in Article 4 of the New York Convention.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Since the UAE is a signatory to the New York Convention, UAE Courts should take into consideration Article 5, which provides the grounds for refusing recognition of foreign awards, rather than the grounds contained in Article 53(1), as the provisions of the Convention, we suggest, supersede the New Law.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">A party seeking to challenge the recognition and enforcement of a foreign award could submit their defence, objecting to enforcement of the foreign award, to the Court during the ratification process initiated by the award creditor under Article 55(1). However, the option for filling an action to set aside an award under Article 53(1) will not be available for foreign awards, as the UAE Courts do not have jurisdiction, in our view, to set aside foreign awards.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Conclusion</strong></p>\r\nThe New Law is undoubtedly a great milestone in the progression of international commercial arbitration in the UAE. It has taken into account the particular features and requirements of international commercial arbitration in the UAE. Thus, the New Law should contribute to making the UAE an arbitration hub in the region. However, certain elements of its enforcement provisions may still require clarity.\r\n\r\n&nbsp;'),
	(266851,25811,'MetaLink','content'),
	(266852,25811,'EditorLinkPost','http://localhost:8888/tamimi/wp-admin/post.php?post=7949&amp;action=edit'),
	(266853,25811,'ReportText','<p dir=\"LTR\" align=\"LEFT\"><img class=\"alignright size-large wp-image-8023\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/07/shutterstock_775162108-389x1024.jpg\" alt=\"\" width=\"389\" height=\"1024\" />The suspension of an athlete or nation from participating in the Olympic Games is commonly considered to be the ultimate sporting sanction. Whilst the suspension of Russia from PyeongChang 2018 (and its reinstatement immediately afterwards) grabbed headlines, Kuwait remains subject to a ban imposed by the International Olympic Committee (\"IOC\") in 2015.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Kuwait’s National Olympic Committee (\"NOC\") is no stranger to Olympic exile, having been suspended by the IOC in 1986. More recently, Kuwait was warned by the IOC in 2007 that its sports legislation permitted governmental interference in the internal functioning of its NOC and other sporting federations, in violation of the Olympic Charter. When Kuwait did not address this issue by the IOC’s deadline of 31 December 2009, its NOC was suspended. This ban was lifted shortly before London 2012.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Further sports legislation was enacted in early 2015, however, that conferred upon the Kuwaiti Sports Ministry the power to assume control of national sporting bodies, as well the ability to control financial matters. Consequently, Kuwait’s NOC was disbanded by the Kuwaiti Sport Ministry, purportedly due to financial irregularities, as were nine other national federations. Interim committees were established to take over their administration, headed by figures widely reported to be loyal to the Kuwaiti Sports Ministry. The IOC took the view that Kuwait had failed to ameliorate the position by the IOC’s deadline of 27 October 2015; and, its NOC was suspended again. This came shortly after FIFA had imposed its own suspension on Kuwait’s football association (\"KFA\"), having failed to meet FIFA’s 15 October 2015 deadline for corrective action. Sixteen further international sports federations subsequently followed suit.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Subsequent Developments</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">In response to its censure by the international sporting community, Kuwait went on the offensive. In June 2016, the Kuwait government appealed the IOC suspension in the Swiss Civil Courts and claimed $1 billion compensation for losses flowing from the alleged unjust imposition of a suspension in the absence of an appropriate investigation. The appeal and compensation claim were dismissed in August 2016 and Kuwait was ordered to pay $11,500 towards the IOC’s legal costs. Also in June 2016, the Court of Arbitration for Sport (\"CAS\") rejected an appeal brought by a number of Kuwaiti football clubs (including the Kuwaiti Premier League champions, Kuwait Sporting Club) against the FIFA suspension.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In addition to legal proceedings, Kuwait has made frequent unsuccessful appeals to the IOC (and FIFA) for its suspension to be lifted. Numerous meetings have also taken place between Kuwaiti officials and the IOC, most notably that mediated by the United Nations in January 2016, at which the parties appeared to have to have reached an agreement in principle that Kuwait reportedly reneged upon at a later date.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">On 12 December 2016, Kuwait’s newly-elected parliament voted by a majority of over two thirds to amend the relevant sports legislation to facilitate re-admission to international sport. This vote unfortunately came too late for Kuwait to take part in the AFC Asian Cup Qualification final round, given that the deadline imposed by the Asian Football Conference (\"AFC\") for the KFA to be readmitted to FIFA membership was 18 December 2016.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In early 2017 the IOC are reported to have sent a letter to the Kuwaiti Sports Ministry setting three conditions for Kuwait’s re-acceptance into the Olympic Movement:</p>\r\n\r\n<ol>\r\n 	<li dir=\"LTR\">all relevant sport legislation must be amended in order to comply with the Olympic Charter;</li>\r\n 	<li dir=\"LTR\">all board member changes imposed upon Kuwait’s NOC and other sporting bodes must be revoked; and</li>\r\n 	<li dir=\"LTR\">all ongoing domestic and international cases against the IOC and other international sporting bodes must be dropped.</li>\r\n</ol>\r\n<p dir=\"LTR\" align=\"LEFT\">On 4 December 2017, Kuwait finally bowed to mounting domestic and international pressure by enacting new sports legislation purporting to replace all previous such laws and thus prevent governmental interference with Kuwaiti sporting bodies.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">FIFA lifted its ban on 6 December 2017. However, despite subsequent meetings taking place between Kuwaiti officials and the IOC, the Olympic ban remains in place.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>The wider context of governmental interference</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Sporting bodies are hard-wired to protect their autonomy to govern and regulate their sport, as enshrined in the Olympic Charter. A distinct body of law, lex sportiva, has developed over time to underpin the doctrine that sporting bodies are best placed to understand the unique circumstances of sport and manage them in a way that maximises wider societal benefits. The Olympic Charter promotes collaboration between sporting bodies and government, but prohibits interference. This begs the question as to where the line is between benign and undue governmental influence. Reasonable conditions attached to the receipt of public funds by sporting bodies for grassroots investment is an obvious example of the former, whereas a government retaining unfettered power to disband national sporting federations is an obvious example of the latter. However, there are a myriad of circumstances falling in between.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Kuwait is not alone in finding itself on the wrong side of the IOC due to governmental interference in sport:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">In July 2007, Panama was suspended by the IOC for governmental interference in the running of its NOC. The ban was lifted in April 2008 in time for the nation to compete at Beijing 2008. It was threatened with a further suspension in January 2011 when the Panamanian President demanded the resignation of NOC committee members, but this was averted when the issue was resolved to the IOC’s satisfaction.</li>\r\n 	<li dir=\"LTR\">In January 2011, Ghana’s NOC was suspended by the IOC for failing to amend its sports law to prevent the Ghanaian government from making presidential appointments to its NOC and numerous national sporting federations. The ban was lifted in October 2011 when a new sports law was enacted to prevent political interference, allowing the nation to compete at London 2012.</li>\r\n 	<li dir=\"LTR\">In June 2011, the IOC warned the Indian Sports Ministry that compelling national sporting federations to adopt mandatory eligibility requirements for officials constituted undue governmental interference. When the Indian government ignored this warning and the Olympic Association separately elected officials accused of corruption, the Indian NOC was suspended by the IOC for non-compliance with the Olympic Charter in December 2012. Somewhat uniquely, the IOC lifted this ban lifted four days into Sochi 2014 when new officials were elected, causing the Indian flag to be belatedly raised in the Olympic Village.</li>\r\n 	<li dir=\"LTR\">In 2015, Sri Lanka was warned by the IOC that it faced suspension if it did not revise proposed sports legislation that barred high-ranking officials from standing for re-election by the end of that year. This governmental interference was cited as a major reason for Sri Lanka being stripped of its hosting rights of the 2017 Asian Youth Games.</li>\r\n 	<li dir=\"LTR\">In August 2016, Kenya’s Sports Ministry disbanded its NOC and transferred its duties to Sports Kenya, in response to alleged mismanagement of Team Kenya at Rio 2016 by senior NOC officials. In March 2017, the IOC cut funding and threated suspension of the newly-formed NOC when it refused to accept IOC-requested governance reforms.</li>\r\n 	<li dir=\"LTR\">Recent reports suggest that Saudi Arabia is coming under increased scrutiny from the IOC and FIFA in connection with a growing trend of appointments for government-backed appointees to the Kingdom’s national sports federations. A suspension from international sport would impact the Kingdom’s successful national and club football teams and may also affect its progressive economic reforms, of which sport - and in particular the privatisation of its top-tier football clubs - is a central component, owing to sport’s increasingly valuable geo-political status in the GCC region.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">The IOC is, therefore, not afraid to adopt a robust approach if it considers that the Olympic Charter is being undermined by undue governmental interference. One particular area it has sought to control is the fall-out when relations between national governments and NOCs breakdown. In this regard the IOC has a number of weapons at its disposal, including proactive engagement with the parties, interim funding cuts, the threat of a suspension, and ultimately the imposition of a suspension. The political unpopularity of presiding over a nation suspended from the Olympics more often than not prompts governments to take the necessary remedial action.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Commentary</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The fact that the IOC has not yet followed FIFA’s lead in lifting its ban on Kuwait is an intriguing epilogue to this rather messy affair. The reasons for this are not clear, however it may be because Kuwait has not yet complied with the pre-conditions for re-acceptance (outlined above) to the IOC’s satisfaction. It may also be symptomatic of the deterioration in the relationship between Kuwait and the IOC. A string of previous broken promises and the instigation of a $1 billion lawsuit may have eroded the IOC’s trust in Kuwait delivering meaningful and lasting change this time around.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">What is certain is that the impact on Kuwaiti sport has been marked. Kuwaiti athletes were unable to represent their country at the 2010 Summer Youth Olympics, Rio 2016, and PyeongChang 2018; having to compete instead as neutral athletes under the Olympic flag. Indeed, Kuwait was denied its first ever Olympic gold medal when Kuwaiti shooter Fehaid Al-Deehani claimed the dubious honour at Rio 2016 of becoming the first athlete to win a gold medal as an Independent Olympic Athlete. Similarly, Kuwaiti football teams and clubs have been barred from international competitions (including the World Cup 2018 qualifiers and the AFC Asian Cup 2019) and the national team’s FIFA ranking has plummeted to 160 (having been as high as 24 in 1998). To add insult to injury, all IOC and FIFA financial development assistance has been stopped during the periods of suspension, which has severely affected the finances of Kuwaiti sport. Even more tragic is the impact on Kuwait’s grassroots participants and youth, who have cruelly been denied sporting heroes to aspire to and sporting goals to aim for, as well as their training programmes and facilities being starved of cash from the IOC and FIFA. Many talk of Kuwait’s ‘lost generation’ of talent and feel that lasting damage has been done.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">It is difficult not to draw comparisons with Russia’s 85 day IOC suspension for systemic manipulation of anti-doping rules which the IOC President Thomas Bach described as \"an unprecedented attack on the integrity of the Olympic games and sport\". There is little doubting that a Russian team appeared at PyeongChang 2018 in all but name (and arguably in name, being ‘Olympic Athletes from Russia’, as compared to Kuwait’s ‘Independent Olympic Athletes’), with its 168 athletes (only 64 less than at Sochi 2014) being cheered on by fans wearing Russian kit, waving Russian flags and singing the Russian anthem. Kuwait’s continuing IOC suspension, which in contrast to the Russian suspension does not implicate any individual athletes, does seem to disproportionately punish Kuwaiti athletes for what has been termed a power struggle between Kuwait’s ruling elite.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Now that certain roadblocks to reinstatement have been removed (as outlined above), it seems likely that the IOC ban will be lifted; however it remains to be seen when this will be and what further steps Kuwait will need to take to achieve it.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><em><img class=\"alignleft size-full wp-image-8022\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/07/RTHTF.jpg\" alt=\"\" width=\"5786\" height=\"1837\" /></p>\r\n&nbsp;<p dir=\"LTR\" align=\"LEFT\">NB: Please note a version of this article was first published on lawinsport.com on 15 June 2018 (https://www.lawinsport.com/topics/articles/item/governmental-interference-in-global-sport-why-kuwait-is-still-in-the-olympic-wilderness).</em></p>\r\n<em>Andrew (a.moroney@tamimi.com) is an Associate in Al Tamimi &amp; Company’s dedicated Sports &amp; Events Management team, working exclusively for clients in the sports and events sector on commercial, dispute resolution and regulatory matters. For further information please contact Steve Bainbridge (s.bainbridge@tamimi.com)</em>|<p dir=\"LTR\" align=\"LEFT\"><img class=\" wp-image-8023 alignleft\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/07/shutterstock_775162108-389x1024.jpg\" alt=\"\" width=\"329\" height=\"866\" />The suspension of an athlete or nation from participating in the Olympic Games is commonly considered to be the ultimate sporting sanction. Whilst the suspension of Russia from PyeongChang 2018 (and its reinstatement immediately afterwards) grabbed headlines, Kuwait remains subject to a ban imposed by the International Olympic Committee (\"IOC\") in 2015.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Kuwait’s National Olympic Committee (\"NOC\") is no stranger to Olympic exile, having been suspended by the IOC in 1986. More recently, Kuwait was warned by the IOC in 2007 that its sports legislation permitted governmental interference in the internal functioning of its NOC and other sporting federations, in violation of the Olympic Charter. When Kuwait did not address this issue by the IOC’s deadline of 31 December 2009, its NOC was suspended. This ban was lifted shortly before London 2012.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Further sports legislation was enacted in early 2015, however, that conferred upon the Kuwaiti Sports Ministry the power to assume control of national sporting bodies, as well the ability to control financial matters. Consequently, Kuwait’s NOC was disbanded by the Kuwaiti Sport Ministry, purportedly due to financial irregularities, as were nine other national federations. Interim committees were established to take over their administration, headed by figures widely reported to be loyal to the Kuwaiti Sports Ministry. The IOC took the view that Kuwait had failed to ameliorate the position by the IOC’s deadline of 27 October 2015; and, its NOC was suspended again. This came shortly after FIFA had imposed its own suspension on Kuwait’s football association (\"KFA\"), having failed to meet FIFA’s 15 October 2015 deadline for corrective action. Sixteen further international sports federations subsequently followed suit.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Subsequent Developments</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">In response to its censure by the international sporting community, Kuwait went on the offensive. In June 2016, the Kuwait government appealed the IOC suspension in the Swiss Civil Courts and claimed $1 billion compensation for losses flowing from the alleged unjust imposition of a suspension in the absence of an appropriate investigation. The appeal and compensation claim were dismissed in August 2016 and Kuwait was ordered to pay $11,500 towards the IOC’s legal costs. Also in June 2016, the Court of Arbitration for Sport (\"CAS\") rejected an appeal brought by a number of Kuwaiti football clubs (including the Kuwaiti Premier League champions, Kuwait Sporting Club) against the FIFA suspension.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In addition to legal proceedings, Kuwait has made frequent unsuccessful appeals to the IOC (and FIFA) for its suspension to be lifted. Numerous meetings have also taken place between Kuwaiti officials and the IOC, most notably that mediated by the United Nations in January 2016, at which the parties appeared to have to have reached an agreement in principle that Kuwait reportedly reneged upon at a later date.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">On 12 December 2016, Kuwait’s newly-elected parliament voted by a majority of over two thirds to amend the relevant sports legislation to facilitate re-admission to international sport. This vote unfortunately came too late for Kuwait to take part in the AFC Asian Cup Qualification final round, given that the deadline imposed by the Asian Football Conference (\"AFC\") for the KFA to be readmitted to FIFA membership was 18 December 2016.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In early 2017 the IOC are reported to have sent a letter to the Kuwaiti Sports Ministry setting three conditions for Kuwait’s re-acceptance into the Olympic Movement:</p>\r\n\r\n<ol>\r\n 	<li dir=\"LTR\">all relevant sport legislation must be amended in order to comply with the Olympic Charter;</li>\r\n 	<li dir=\"LTR\">all board member changes imposed upon Kuwait’s NOC and other sporting bodes must be revoked; and</li>\r\n 	<li dir=\"LTR\">all ongoing domestic and international cases against the IOC and other international sporting bodes must be dropped.</li>\r\n</ol>\r\n<p dir=\"LTR\" align=\"LEFT\">On 4 December 2017, Kuwait finally bowed to mounting domestic and international pressure by enacting new sports legislation purporting to replace all previous such laws and thus prevent governmental interference with Kuwaiti sporting bodies.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">FIFA lifted its ban on 6 December 2017. However, despite subsequent meetings taking place between Kuwaiti officials and the IOC, the Olympic ban remains in place.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>The wider context of governmental interference</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Sporting bodies are hard-wired to protect their autonomy to govern and regulate their sport, as enshrined in the Olympic Charter. A distinct body of law, lex sportiva, has developed over time to underpin the doctrine that sporting bodies are best placed to understand the unique circumstances of sport and manage them in a way that maximises wider societal benefits. The Olympic Charter promotes collaboration between sporting bodies and government, but prohibits interference. This begs the question as to where the line is between benign and undue governmental influence. Reasonable conditions attached to the receipt of public funds by sporting bodies for grassroots investment is an obvious example of the former, whereas a government retaining unfettered power to disband national sporting federations is an obvious example of the latter. However, there are a myriad of circumstances falling in between.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Kuwait is not alone in finding itself on the wrong side of the IOC due to governmental interference in sport:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">In July 2007, Panama was suspended by the IOC for governmental interference in the running of its NOC. The ban was lifted in April 2008 in time for the nation to compete at Beijing 2008. It was threatened with a further suspension in January 2011 when the Panamanian President demanded the resignation of NOC committee members, but this was averted when the issue was resolved to the IOC’s satisfaction.</li>\r\n 	<li dir=\"LTR\">In January 2011, Ghana’s NOC was suspended by the IOC for failing to amend its sports law to prevent the Ghanaian government from making presidential appointments to its NOC and numerous national sporting federations. The ban was lifted in October 2011 when a new sports law was enacted to prevent political interference, allowing the nation to compete at London 2012.</li>\r\n 	<li dir=\"LTR\">In June 2011, the IOC warned the Indian Sports Ministry that compelling national sporting federations to adopt mandatory eligibility requirements for officials constituted undue governmental interference. When the Indian government ignored this warning and the Olympic Association separately elected officials accused of corruption, the Indian NOC was suspended by the IOC for non-compliance with the Olympic Charter in December 2012. Somewhat uniquely, the IOC lifted this ban lifted four days into Sochi 2014 when new officials were elected, causing the Indian flag to be belatedly raised in the Olympic Village.</li>\r\n 	<li dir=\"LTR\">In 2015, Sri Lanka was warned by the IOC that it faced suspension if it did not revise proposed sports legislation that barred high-ranking officials from standing for re-election by the end of that year. This governmental interference was cited as a major reason for Sri Lanka being stripped of its hosting rights of the 2017 Asian Youth Games.</li>\r\n 	<li dir=\"LTR\">In August 2016, Kenya’s Sports Ministry disbanded its NOC and transferred its duties to Sports Kenya, in response to alleged mismanagement of Team Kenya at Rio 2016 by senior NOC officials. In March 2017, the IOC cut funding and threated suspension of the newly-formed NOC when it refused to accept IOC-requested governance reforms.</li>\r\n 	<li dir=\"LTR\">Recent reports suggest that Saudi Arabia is coming under increased scrutiny from the IOC and FIFA in connection with a growing trend of appointments for government-backed appointees to the Kingdom’s national sports federations. A suspension from international sport would impact the Kingdom’s successful national and club football teams and may also affect its progressive economic reforms, of which sport - and in particular the privatisation of its top-tier football clubs - is a central component, owing to sport’s increasingly valuable geo-political status in the GCC region.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">The IOC is, therefore, not afraid to adopt a robust approach if it considers that the Olympic Charter is being undermined by undue governmental interference. One particular area it has sought to control is the fall-out when relations between national governments and NOCs breakdown. In this regard the IOC has a number of weapons at its disposal, including proactive engagement with the parties, interim funding cuts, the threat of a suspension, and ultimately the imposition of a suspension. The political unpopularity of presiding over a nation suspended from the Olympics more often than not prompts governments to take the necessary remedial action.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Commentary</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The fact that the IOC has not yet followed FIFA’s lead in lifting its ban on Kuwait is an intriguing epilogue to this rather messy affair. The reasons for this are not clear, however it may be because Kuwait has not yet complied with the pre-conditions for re-acceptance (outlined above) to the IOC’s satisfaction. It may also be symptomatic of the deterioration in the relationship between Kuwait and the IOC. A string of previous broken promises and the instigation of a $1 billion lawsuit may have eroded the IOC’s trust in Kuwait delivering meaningful and lasting change this time around.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">What is certain is that the impact on Kuwaiti sport has been marked. Kuwaiti athletes were unable to represent their country at the 2010 Summer Youth Olympics, Rio 2016, and PyeongChang 2018; having to compete instead as neutral athletes under the Olympic flag. Indeed, Kuwait was denied its first ever Olympic gold medal when Kuwaiti shooter Fehaid Al-Deehani claimed the dubious honour at Rio 2016 of becoming the first athlete to win a gold medal as an Independent Olympic Athlete. Similarly, Kuwaiti football teams and clubs have been barred from international competitions (including the World Cup 2018 qualifiers and the AFC Asian Cup 2019) and the national team’s FIFA ranking has plummeted to 160 (having been as high as 24 in 1998). To add insult to injury, all IOC and FIFA financial development assistance has been stopped during the periods of suspension, which has severely affected the finances of Kuwaiti sport. Even more tragic is the impact on Kuwait’s grassroots participants and youth, who have cruelly been denied sporting heroes to aspire to and sporting goals to aim for, as well as their training programmes and facilities being starved of cash from the IOC and FIFA. Many talk of Kuwait’s ‘lost generation’ of talent and feel that lasting damage has been done.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">It is difficult not to draw comparisons with Russia’s 85 day IOC suspension for systemic manipulation of anti-doping rules which the IOC President Thomas Bach described as \"an unprecedented attack on the integrity of the Olympic games and sport\". There is little doubting that a Russian team appeared at PyeongChang 2018 in all but name (and arguably in name, being ‘Olympic Athletes from Russia’, as compared to Kuwait’s ‘Independent Olympic Athletes’), with its 168 athletes (only 64 less than at Sochi 2014) being cheered on by fans wearing Russian kit, waving Russian flags and singing the Russian anthem. Kuwait’s continuing IOC suspension, which in contrast to the Russian suspension does not implicate any individual athletes, does seem to disproportionately punish Kuwaiti athletes for what has been termed a power struggle between Kuwait’s ruling elite.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Now that certain roadblocks to reinstatement have been removed (as outlined above), it seems likely that the IOC ban will be lifted; however it remains to be seen when this will be and what further steps Kuwait will need to take to achieve it.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em><img class=\"alignleft size-full wp-image-8022\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/07/RTHTF.jpg\" alt=\"\" width=\"5786\" height=\"1837\" /></em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">NB: Please note a version of this article was first published on lawinsport.com on 15 June 2018 (https://www.lawinsport.com/topics/articles/item/governmental-interference-in-global-sport-why-kuwait-is-still-in-the-olympic-wilderness).</p>\r\n<em>Andrew (a.moroney@tamimi.com) is an Associate in Al Tamimi &amp; Company’s dedicated Sports &amp; Events Management team, working exclusively for clients in the sports and events sector on commercial, dispute resolution and regulatory matters. For further information please contact Steve Bainbridge (s.bainbridge@tamimi.com)</em>');

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	(259140,25165,'EditorLinkPost','http://localhost:8888/tamimi/wp-admin/post.php?post=7937&amp;action=edit'),
	(259141,25165,'ReportText','<p dir=\"LTR\" align=\"LEFT\"><img class=\"wp-image-7968 alignright\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/07/13-1024x681.jpg\" alt=\"\" width=\"487\" height=\"324\" />The new DIFC Companies Law is expected to come into force in August / September 2018. The new law will make a number of major changes to the rules governing DIFC-established companies, including:</p>\r\n\r\n<ol>\r\n 	<li dir=\"LTR\">the removal of the category of limited liability companies (as an option to the company limited by shares) and the introduction of differing regulatory requirements imposed on private and public companies respectively; and</li>\r\n 	<li dir=\"LTR\">the introduction of more detailed and explicit provisions imposing and regulating directors’ duties.</li>\r\n</ol>\r\n<p dir=\"LTR\" align=\"LEFT\">This article concerns the most innovative feature of the new law, the introduction of a legal framework for corporate schemes of arrangement.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">A scheme of arrangement is a process which empowers companies to enter an array of binding arrangements and agreements with its shareholders and/or creditors as classes. Where an arrangement is supported by 75% of the relevant classes of creditors or shareholders, the Court has power to sanction it and to bind all the stakeholders, including any dissenting minority. Schemes of arrangement are used extensively in England and in other common law jurisdictions, so it is a welcome innovation for DIFC companies.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The legal process for schemes of arrangement was originally developed in England but the new DIFC provisions are closely modelled on Jersey law, which is less detailed and prescriptive than the legislation now applying in England and Wales. The DIFC provisions relating to compromises and arrangements can be found in Articles 124 to 126 of the new Companies Law.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>How are Schemes Commonly Used?</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Schemes of arrangement are extremely flexible and the legislation does not restrict the form or content of the compromise or arrangement. Here are a number of examples of how schemes have been employed successfully in the UK:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\"><strong>Reducing debt and carrying out debt for equity swaps</strong></li>\r\n</ul>\r\n<p style=\"padding-left: 60px;\">Sometimes, a scheme of arrangement can be used to reduce the value of claims from both secured and unsecured creditors. Debt reduction can occur as part of a compromise, where creditors agree to accept a pro-rated percentage of the total debt so the company can continue to be viable. Often, in these circumstances, a creditor will ‘swap’ some of its debt in the company for equity in a new holding company. This reduces the debt of the operating company, allows it to continue trading and provides for a cash injection into the new holding company.</p>\r\n<p style=\"padding-left: 60px;\"><em>For example, in the Countrywide plc case, the company had issued senior secured loan notes worth £470 million which were reduced to £175 million and the holder of the senior secured loan notes agreed to inject capital into a new holding company in return for 35% of the equity in that company. In addition, it was agreed to convert unsecured loan notes worth £170 million to 5% of equity in the new holding company. The proposal was supported by the majority of the loan note holders and so the court approved the agreement.</em></p>\r\n\r\n<ul>\r\n 	<li><em><strong>An alternative to liquidation</strong></em></li>\r\n</ul>\r\n<p style=\"padding-left: 60px;\"><em>Schemes can also be used as an alternative to a formal liquidation process. The terms of the scheme will prescribe a distribution of the company’s assets between the creditors. This can be helpful when there are a number of contingent claims which may be difficult to quantify and would delay the liquidation process or where assets of a group of companies are difficult to identify as owned by a particular member of a group.</em></p>\r\n\r\n<ul>\r\n 	<li><em><strong>Where the company seeks to assure future solvency by \"ring fencing\" contingent claims</strong></em></li>\r\n</ul>\r\n<p style=\"padding-left: 60px;\">In <em>Re Cape plc &amp; Ors</em>, Cape plc and its subsidiary companies called a meeting of creditors to approve a solvent scheme of arrangement.</p>\r\n<p style=\"padding-left: 60px;\">Cape plc’s group business was asbestos mining and the manufacture, distribution and installation of asbestos products. The company was solvent, but faced many future contingent claims due to its employees’ past exposure to asbestos dust. Given the slow emergence of medical problems caused by exposure to asbestos, it was clear that the company would face claims in the future, but at the time of proposing the scheme noone could quantify the value of these claims with precision.</p>\r\n<p style=\"padding-left: 60px;\">The scheme of arrangement was designed to protect the group’s ongoing businesses from the asbestos claims, whilst at the same time diverting a percentage of its earnings into a sinking fund for the payment of those claims. The Court approved the proposed scheme, thereby allowing Cape plc to create a subsidiary company to deal with all present and future claims, effectively ring-fencing the rest of the Cape group from the disruptive effect of the claims.</p>\r\n\r\n<ul>\r\n 	<li><strong>Takeovers</strong></li>\r\n</ul>\r\n<p style=\"padding-left: 60px;\">Schemes of arrangement are used in the UK as an alternative way to implement a company takeover rather than following the City Code on Takeovers and Mergers Takeover Regulations (\"UK Takeover Regulations\"). Consent is only required from 75% of the shareholders for all shareholders to be bound and liable to compulsory acquisition; whereas 90% of the shareholders are required to consent under the UK Takeover Regulations to achieve a ‘squeeze-out’.</p>\r\n<p style=\"padding-left: 60px;\">An example of this in practice is the case of TDG plc. There the company applied for an order under the Companies Act 2006 sanctioning a scheme of arrangement, the object of which was to facilitate the acquisition of shares in the company by a buyer. A minority shareholder opposed the approval of the scheme. The scheme was approved by the court as reasonable so all shareholders were bound to transfer their shares to the acquiring company.</p>\r\n<p style=\"padding-left: 60px;\">The provisions of the old DIFC Companies law in respect of takeovers contain the same threshold to that of the UK Takeover Regulations (consent of 90% of the shareholders). The introduction of the New Law will enable all shareholders to be bound by the arrangement with only the consent of 75% of the shareholders. This is likely to facilitate takeovers in the DIFC, particularly in circumstances where there are dissenting or ‘lost’ shareholders. The provisions can also be used to implement a ‘squeeze-out’.</p>\r\n\r\n<ul>\r\n 	<li><strong>Demergers</strong></li>\r\n</ul>\r\n<p style=\"padding-left: 60px;\">In the case of BGEO Group plc the applicant company applied for the court to sanction a scheme of arrangement to split its investment business from its banking business. The scheme involved the insertion of a new holding company and, once the scheme had taken effect, the demerger of the group’s two businesses. The new holding company would undertake a swap reduction of capital for the purpose of demerging the investment business. The shareholder agreed to swap their shares in the applicant company for shares in the new holding company on a one-for-one basis.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong><img class=\" wp-image-8071 alignleft\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/08/DIFC-Courts.jpg\" alt=\"\" width=\"507\" height=\"462\" />Benefits to companies incorporated in the DIFC</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The new provisions will open up wide range of flexible options for restructuring debt or equity. In certain scenarios, additional requirements of the DIFC companies law will also need to be taken into account, in particular the rules governing any return of capital to shareholders, so there may need to be parallel compliance.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>What types of compromises or arrangements will be approved?</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Subject to the required formalities and approvals, schemes can be used to bind all shareholders of the relevant class(es) of creditors and/or shareholders to almost any type of reorganisation. Nothing in the new law limits the subject matter of a scheme. In theory a scheme could be a compromise or arrangement between a company and its creditors or shareholders about anything which they can properly agree amongst themselves.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">However, a scheme must be a ‘genuine’ and ‘effective’ arrangement or compromise. This means that the shareholders and creditors of the company which participate in the scheme must obtain some advantage in compensation for the scheme’s alteration of their pre-scheme rights entitlements.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>The procedure</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">For a company to obtain a sanctioned compromise or arrangement in accordance with the New Law, the following steps will need to be undertaken:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">The person proposing the scheme of arrangement must seek a court order to convene creditor and/or shareholder meetings (as relevant) in order to vote on the proposed scheme;</li>\r\n 	<li dir=\"LTR\">The notice calling for the meeting whether by letter or advertisement, must include a statement containing details of; (i) the effect of the proposed compromise or arrangements, (ii) material interests of the directors of the company in the arrangement, (iii) if any debentures have been issued by the company how the arrangement or compromise would affect the rights of the debenture holders; and (iv) any other matter which would have a material impact on the company, its creditors and shareholder.</li>\r\n 	<li dir=\"LTR\">Compromise or arrangement schemes require approval by at least 75% in value of each class of the creditors who vote on the compromise or arrangements or the holders of 75% of the voting rights of the shareholders or class of shareholders, as the case may be, present and voting either in person or by proxy at the meeting;</li>\r\n 	<li dir=\"LTR\">After the scheme has been approved by the shareholders or creditor, it must then be sanctioned by the court;</li>\r\n 	<li dir=\"LTR\">Any interested shareholder or creditor can be represented when the court considers the application to sanction the scheme, and may argue for or against the sanctioning of the scheme.</li>\r\n 	<li dir=\"LTR\">A copy of the court order must then be sent to the Registrar and the Registrar will ensure that a copy of the court order is included in the company’s articles of association.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">Applications for a scheme of arrangement can be made by the company, a creditor or shareholder or in the case of a company being wound up its liquidator.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Conclusion</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The introduction of schemes of arrangement in the DIFC paves the way to greater flexibility in implementing a range of sophisticated deals within the DIFC from equity swaps, to demergers, to corporate turnarounds.</p>\r\n<em>Al Tamimi &amp; Company’s Corporate and Commercial team regularly advises on restructuring and take over arrangements. For further information please contact Anna Robinson, a.robinson@tamimi.com or Richard Catling, r.catling@tamimi.com.</em>|<p dir=\"LTR\" align=\"LEFT\"><img class=\"wp-image-7968 alignright\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/07/13-1024x681.jpg\" alt=\"\" width=\"487\" height=\"324\" />The new DIFC Companies Law is expected to come into force in August / September 2018. The new law will make a number of major changes to the rules governing DIFC-established companies, including:</p>\r\n\r\n<ol>\r\n 	<li dir=\"LTR\">the removal of the category of limited liability companies (as an option to the company limited by shares) and the introduction of differing regulatory requirements imposed on private and public companies respectively; and</li>\r\n 	<li dir=\"LTR\">the introduction of more detailed and explicit provisions imposing and regulating directors’ duties.</li>\r\n</ol>\r\n<p dir=\"LTR\" align=\"LEFT\">This article concerns the most innovative feature of the new law, the introduction of a legal framework for corporate schemes of arrangement.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">A scheme of arrangement is a process which empowers companies to enter an array of binding arrangements and agreements with its shareholders and/or creditors as classes. Where an arrangement is supported by 75% of the relevant classes of creditors or shareholders, the Court has power to sanction it and to bind all the stakeholders, including any dissenting minority. Schemes of arrangement are used extensively in England and in other common law jurisdictions, so it is a welcome innovation for DIFC companies.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The legal process for schemes of arrangement was originally developed in England but the new DIFC provisions are closely modelled on Jersey law, which is less detailed and prescriptive than the legislation now applying in England and Wales. The DIFC provisions relating to compromises and arrangements can be found in Articles 124 to 126 of the new Companies Law.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>How are Schemes Commonly Used?</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Schemes of arrangement are extremely flexible and the legislation does not restrict the form or content of the compromise or arrangement. Here are a number of examples of how schemes have been employed successfully in the UK:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\"><strong>Reducing debt and carrying out debt for equity swaps</strong></li>\r\n</ul>\r\n<p style=\"padding-left: 60px;\">Sometimes, a scheme of arrangement can be used to reduce the value of claims from both secured and unsecured creditors. Debt reduction can occur as part of a compromise, where creditors agree to accept a pro-rated percentage of the total debt so the company can continue to be viable. Often, in these circumstances, a creditor will ‘swap’ some of its debt in the company for equity in a new holding company. This reduces the debt of the operating company, allows it to continue trading and provides for a cash injection into the new holding company.</p>\r\n<p style=\"padding-left: 60px;\"><em>For example, in the Countrywide plc case, the company had issued senior secured loan notes worth £470 million which were reduced to £175 million and the holder of the senior secured loan notes agreed to inject capital into a new holding company in return for 35% of the equity in that company. In addition, it was agreed to convert unsecured loan notes worth £170 million to 5% of equity in the new holding company. The proposal was supported by the majority of the loan note holders and so the court approved the agreement.</em></p>\r\n\r\n<ul>\r\n 	<li><em><strong>An alternative to liquidation</strong></em></li>\r\n</ul>\r\n<p style=\"padding-left: 60px;\"><em>Schemes can also be used as an alternative to a formal liquidation process. The terms of the scheme will prescribe a distribution of the company’s assets between the creditors. This can be helpful when there are a number of contingent claims which may be difficult to quantify and would delay the liquidation process or where assets of a group of companies are difficult to identify as owned by a particular member of a group.</em></p>\r\n\r\n<ul>\r\n 	<li><em><strong>Where the company seeks to assure future solvency by \"ring fencing\" contingent claims</strong></em></li>\r\n</ul>\r\n<p style=\"padding-left: 60px;\">In <em>Re Cape plc &amp; Ors</em>, Cape plc and its subsidiary companies called a meeting of creditors to approve a solvent scheme of arrangement.</p>\r\n<p style=\"padding-left: 60px;\">Cape plc’s group business was asbestos mining and the manufacture, distribution and installation of asbestos products. The company was solvent, but faced many future contingent claims due to its employees’ past exposure to asbestos dust. Given the slow emergence of medical problems caused by exposure to asbestos, it was clear that the company would face claims in the future, but at the time of proposing the scheme noone could quantify the value of these claims with precision.</p>\r\n<p style=\"padding-left: 60px;\">The scheme of arrangement was designed to protect the group’s ongoing businesses from the asbestos claims, whilst at the same time diverting a percentage of its earnings into a sinking fund for the payment of those claims. The Court approved the proposed scheme, thereby allowing Cape plc to create a subsidiary company to deal with all present and future claims, effectively ring-fencing the rest of the Cape group from the disruptive effect of the claims.</p>\r\n\r\n<ul>\r\n 	<li><strong>Takeovers</strong></li>\r\n</ul>\r\n<p style=\"padding-left: 60px;\">Schemes of arrangement are used in the UK as an alternative way to implement a company takeover rather than following the City Code on Takeovers and Mergers Takeover Regulations (\"UK Takeover Regulations\"). Consent is only required from 75% of the shareholders for all shareholders to be bound and liable to compulsory acquisition; whereas 90% of the shareholders are required to consent under the UK Takeover Regulations to achieve a ‘squeeze-out’.</p>\r\n<p style=\"padding-left: 60px;\">An example of this in practice is the case of TDG plc. There the company applied for an order under the Companies Act 2006 sanctioning a scheme of arrangement, the object of which was to facilitate the acquisition of shares in the company by a buyer. A minority shareholder opposed the approval of the scheme. The scheme was approved by the court as reasonable so all shareholders were bound to transfer their shares to the acquiring company.</p>\r\n<p style=\"padding-left: 60px;\">The provisions of the old DIFC Companies law in respect of takeovers contain the same threshold to that of the UK Takeover Regulations (consent of 90% of the shareholders). The introduction of the New Law will enable all shareholders to be bound by the arrangement with only the consent of 75% of the shareholders. This is likely to facilitate takeovers in the DIFC, particularly in circumstances where there are dissenting or ‘lost’ shareholders. The provisions can also be used to implement a ‘squeeze-out’.</p>\r\n\r\n<ul>\r\n 	<li><strong>Demergers</strong></li>\r\n</ul>\r\n<p style=\"padding-left: 60px;\">In the case of BGEO Group plc the applicant company applied for the court to sanction a scheme of arrangement to split its investment business from its banking business. The scheme involved the insertion of a new holding company and, once the scheme had taken effect, the demerger of the group’s two businesses. The new holding company would undertake a swap reduction of capital for the purpose of demerging the investment business. The shareholder agreed to swap their shares in the applicant company for shares in the new holding company on a one-for-one basis.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong><img class=\"alignright size-full wp-image-8072\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/08/DIFC.jpg\" alt=\"\" width=\"291\" height=\"537\" />Benefits to companies incorporated in the DIFC</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The new provisions will open up wide range of flexible options for restructuring debt or equity. In certain scenarios, additional requirements of the DIFC companies law will also need to be taken into account, in particular the rules governing any return of capital to shareholders, so there may need to be parallel compliance.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>What types of compromises or arrangements will be approved?</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Subject to the required formalities and approvals, schemes can be used to bind all shareholders of the relevant class(es) of creditors and/or shareholders to almost any type of reorganisation. Nothing in the new law limits the subject matter of a scheme. In theory a scheme could be a compromise or arrangement between a company and its creditors or shareholders about anything which they can properly agree amongst themselves.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">However, a scheme must be a ‘genuine’ and ‘effective’ arrangement or compromise. This means that the shareholders and creditors of the company which participate in the scheme must obtain some advantage in compensation for the scheme’s alteration of their pre-scheme rights entitlements.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>The procedure</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">For a company to obtain a sanctioned compromise or arrangement in accordance with the New Law, the following steps will need to be undertaken:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">The person proposing the scheme of arrangement must seek a court order to convene creditor and/or shareholder meetings (as relevant) in order to vote on the proposed scheme;</li>\r\n 	<li dir=\"LTR\">The notice calling for the meeting whether by letter or advertisement, must include a statement containing details of; (i) the effect of the proposed compromise or arrangements, (ii) material interests of the directors of the company in the arrangement, (iii) if any debentures have been issued by the company how the arrangement or compromise would affect the rights of the debenture holders; and (iv) any other matter which would have a material impact on the company, its creditors and shareholder.</li>\r\n 	<li dir=\"LTR\">Compromise or arrangement schemes require approval by at least 75% in value of each class of the creditors who vote on the compromise or arrangements or the holders of 75% of the voting rights of the shareholders or class of shareholders, as the case may be, present and voting either in person or by proxy at the meeting;</li>\r\n 	<li dir=\"LTR\">After the scheme has been approved by the shareholders or creditor, it must then be sanctioned by the court;</li>\r\n 	<li dir=\"LTR\">Any interested shareholder or creditor can be represented when the court considers the application to sanction the scheme, and may argue for or against the sanctioning of the scheme.</li>\r\n 	<li dir=\"LTR\">A copy of the court order must then be sent to the Registrar and the Registrar will ensure that a copy of the court order is included in the company’s articles of association.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">Applications for a scheme of arrangement can be made by the company, a creditor or shareholder or in the case of a company being wound up its liquidator.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Conclusion</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The introduction of schemes of arrangement in the DIFC paves the way to greater flexibility in implementing a range of sophisticated deals within the DIFC from equity swaps, to demergers, to corporate turnarounds.</p>\r\n<em>Al Tamimi &amp; Company’s Corporate and Commercial team regularly advises on restructuring and take over arrangements. For further information please contact Anna Robinson, a.robinson@tamimi.com or Richard Catling, r.catling@tamimi.com.</em>'),
	(259139,25165,'MetaLink','content'),
	(259200,25170,'MetaLink','content'),
	(259201,25170,'EditorLinkPost','http://localhost:8888/tamimi/wp-admin/post.php?post=7938&amp;action=edit'),
	(259202,25170,'ReportText','<p dir=\"LTR\" align=\"LEFT\"><img class=\"alignleft size-full wp-image-8001\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/07/16.jpg\" alt=\"\" width=\"6449\" height=\"2173\" />The United Arab Emirates (UAE) has long been described as a business-friendly country in the mainstream media and in widely followed surveys of competitiveness. The last couple of months have seen a wave of official measures and initiatives that aim to make Dubai and Abu Dhabi more cost effective (and easier) places in which to live and to run businesses.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Even more open for business</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">On 20 May 2018, the Cabinet of the UAE announced two major changes, both of which were highlighted in tweets by HH Sheikh Mohammed bin Rashid Al Maktoum, the Ruler of Dubai and the Prime Minister of the UAE:</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>1. Long Term Residency Visas</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Under a new visa regime, 10-year residency visas will be available for ‘specialists in medical, scientific, research and technical fields, as well as for all scientists and innovators’. The new visa regime will also include five-year residency visas for students who are studying in the UAE and up to 10 years for ‘exceptional students’.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>2. 100% Foreign Business Ownership</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">In a strategic move to boost the economy and attract global investments, it was announced that the UAE will allow foreign investors in specific sectors to wholly own their businesses by the end of 2018.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Currently, the only way that foreigners could own up to 100% of a business was through one of the various Free Zones in the UAE; otherwise, the ceiling for foreign ownership in mainland UAE was 51%.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Whilst it has not yet been decided as to which sectors will benefit from the announcement, we believe that the decision will be linked to factors such as job creation and significant investments relating to advanced technology and artificial intelligence.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">From these breakthrough decisions, it is clear to see that the UAE governments are working hard to maintain their title of global leader and the \"business hub\" for foreign investment. It is well documented that the UAE never does things by half and therefore not surprisingly, the exciting announcements did not stop there…</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>More Action to Reduce Business Costs</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Waiver of Corporate Fines</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">On 29 May 2018, Dubai’s Department of Economic Development (\"DED\") drew attention to Decree No. 20 of 2018, which exempts companies that operate in the Emirate from paying all fines imposed on them, and which facilitates the renewal of licences. HE Sami Al Qamzi, the Director General of Dubai’s DED, noted that ‘[the Decree] will add to the financial benefits of the owners of expired business licenses, restore legal records and licenses, and help the business community in Dubai enhance their competitiveness.’</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Subsequent press reports from 9 June 2018 indicated that the waiver of fines applies to fines that have been issued before 14 April 2018. Businesses that have received fines since then can pay the amounts owing in instalments by arrangement with the DED. The press reports also noted that businesses have until the end of 2018 to renew their licences to operate in Dubai.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Abu Dhabi’s DED announced similar exemptions ‘for establishments whose licences have expired for more than 24 months from paying the delayed and accumulated fees’. HE Mohammed Munif Al Mansoori, the Chief Executive of Abu Dhabi Business Centre, emphasised that the exemptions apply to all establishments regardless of their size or type. The exemptions are valid in all three of the main regions of the Emirate - Abu Dhabi, Al Dhafra and Al Ain.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Going the Extra Mile</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>3 Year AED 50bn Stimulus Package</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Executive Committee of the Abu Dhabi Executive Council discussed a three-year AED50 billion (US$13,624 million) economic stimulus initiative.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Sheikh Mohammed bin Zayed announced the plans for the project, which aims to support Abu Dhabi’s economic development by introducing ten key initiatives; some of which are detailed below:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">Abu Dhabi Office Space Exemption: All new business enterprises that register in the Emirate of Abu Dhabi will be exempt from the requirement of having an office or workspace in the Emirate for two years.</li>\r\n 	<li dir=\"LTR\">Boosting Growth and Competitiveness: There will be a variety of new public-private partnerships in the Emirate of Abu Dhabi: ‘The initiatives marked for 3Q18 also include encouraging and organising local production and supporting SMEs to boost their competitiveness locally and regionally, in addition to the issuance of dual licenses for companies in Abu Dhabi Free Zones to enable them to work outside the free zones and to participate in government tenders’.</li>\r\n 	<li dir=\"LTR\">Instant Licences: ‘During the last quarter of 2018, the Executive Committee will roll out its plan for the implementation of instant licensing systems in most commercial license types and all services provided by the Government, in addition to the review of building regulations for the infrastructure, residential properties, commercial and industrial sectors, as well as the developmental requirements and community facilities of other residential areas in Abu Dhabi, Al Ain and Al Dhafra’.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">As expected, these initiatives have created a huge media buzz in the country, with all sorts of opinions and questions being asked about what it all means for the future. While this largely remains to be seen, what really matters is that the governments are now acting decisively to address the biggest problem for most establishments in the UAE.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">This is at a time that the high costs of doing business in Dubai and Abu Dhabi have been boosted by the introduction of Value Added Tax (VAT) from the beginning of 2018.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Hype and Hard Numbers: the UAE was already a competitive country</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">These announcements are remarkable for two reasons. One is that so many of them have been made in a short period of time by the governments of the UAE, namely in Abu Dhabi and Dubai. The other is that conventional wisdom already sees the UAE as having a (very) competitive business environment in both a regional and a global context. A lot of positive publicity has, for instance, been generated by Expo 2020, which will take place in Dubai.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The hype is supported by hard numbers. In May 2018, the Lausanne-based Institute for International Management Development (IMD - a leading business school) published its 2018 World Competitiveness Ranking. The UAE is currently in seventh place overall (between Denmark and Norway), having been in 10th place in 2017. The UAE is ranked second of the 63 countries assessed in terms of business efficiency (after Hong Kong), third in terms of economic performance (after the United States and mainland China), and fourth for government efficiency (after Hong Kong, Switzerland and Singapore). The UAE is also the only GCC country whose ranking in terms of the Global Competitiveness Index (GCI) calculated by the World Economic Forum (WEF) has clearly improved over the last five years. In 2012-13, the UAE was ranked at 24/144. In 2017-18, the country’s position had advanced to 17/137</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong><img class=\"alignleft  wp-image-8000\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/07/15-1.jpg\" alt=\"\" width=\"469\" height=\"368\" />Addressing the main problem, and ensuring a legacy beyond Expo 2020</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">A clue as to why the UAE’s governments are taking these steps now comes from that part of the WEF’s research, which deals with the most problematic factors for doing business, in the opinion of the various companies that were surveyed. In most of the Gulf Cooperation Council (GCC) countries, the key challenges are restrictive labour regulations and lack of access to finance. Lack of finance was the most serious problem in the UAE. However, inflation – a minor challenge in the other GCC countries - came in as a close second.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The impact of inflation depends on two factors. One is the rate of change of prices in the basket of goods and services that is being considered. The other is the base from which prices are rising. In the case of the UAE, that base is already high by global standards. In the Cost of Living survey compiled by consultancy Mercer in mid 2017, Dubai and Abu Dhabi were, respectively, the 19th and 22nd most expensive cities for expatriates. The survey covered 209 cities. The UAE’s two main cities are, for expatriates, about as costly as San Francisco (21st) and more expensive than London (29th).</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>To watch</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">While it is fair to say that the particulars of the announcements are not yet known; what we can rely on is the fact that the UAE has an excellent track record of following through in delivering their promises, meaning that investors and talented individuals alike should expect positive news in the near future.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">We believe that the key measure of success of the initiatives will be linked to the number of new enterprises that are incorporated in Dubai and Abu Dhabi in the future. With the array of incentives such as long term visas and reductions in set-up fees, it is hard to see why people would not jump at the chance of doing business in the region.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">For now, observers in the rest of the world will focus on the UAE like never before when Expo 2020 comes to Dubai. The latest announcements should have a positive impact on perceptions and the realities of the UAE’s economy.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Over the long-term, the governments will do whatever it takes to maintain the competitiveness of Dubai and Abu Dhabi in a regional, and indeed global, context. The UAE’s economy should continue to flourish and diversify long after Expo 2020.</p>\r\n<em>Al Tamimi &amp; Company’s Corporate Structuring team regularly advises on new changes taking place. For further information please contact Samer Qudah, s.qudah@tamimi.com.</em>|<p dir=\"LTR\" align=\"LEFT\"><img class=\"alignleft size-full wp-image-8001\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/07/16.jpg\" alt=\"\" width=\"6449\" height=\"2173\" />The United Arab Emirates (UAE) has long been described as a business-friendly country in the mainstream media and in widely followed surveys of competitiveness. The last couple of months have seen a wave of official measures and initiatives that aim to make Dubai and Abu Dhabi more cost effective (and easier) places in which to live and to run businesses.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Even more open for business</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">On 20 May 2018, the Cabinet of the UAE announced two major changes, both of which were highlighted in tweets by HH Sheikh Mohammed bin Rashid Al Maktoum, the Ruler of Dubai and the Prime Minister of the UAE:</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>1. Long Term Residency Visas</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Under a new visa regime, 10-year residency visas will be available for ‘specialists in medical, scientific, research and technical fields, as well as for all scientists and innovators’. The new visa regime will also include five-year residency visas for students who are studying in the UAE and up to 10 years for ‘exceptional students’.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>2. 100% Foreign Business Ownership</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">In a strategic move to boost the economy and attract global investments, it was announced that the UAE will allow foreign investors in specific sectors to wholly own their businesses by the end of 2018.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Currently, the only way that foreigners could own up to 100% of a business was through one of the various Free Zones in the UAE; otherwise, the ceiling for foreign ownership in mainland UAE was 51%.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Whilst it has not yet been decided as to which sectors will benefit from the announcement, we believe that the decision will be linked to factors such as job creation and significant investments relating to advanced technology and artificial intelligence.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">From these breakthrough decisions, it is clear to see that the UAE governments are working hard to maintain their title of global leader and the \"business hub\" for foreign investment. It is well documented that the UAE never does things by half and therefore not surprisingly, the exciting announcements did not stop there…</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>More Action to Reduce Business Costs</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Waiver of Corporate Fines</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">On 29 May 2018, Dubai’s Department of Economic Development (\"DED\") drew attention to Decree No. 20 of 2018, which exempts companies that operate in the Emirate from paying all fines imposed on them, and which facilitates the renewal of licences. HE Sami Al Qamzi, the Director General of Dubai’s DED, noted that ‘[the Decree] will add to the financial benefits of the owners of expired business licenses, restore legal records and licenses, and help the business community in Dubai enhance their competitiveness.’</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Subsequent press reports from 9 June 2018 indicated that the waiver of fines applies to fines that have been issued before 14 April 2018. Businesses that have received fines since then can pay the amounts owing in instalments by arrangement with the DED. The press reports also noted that businesses have until the end of 2018 to renew their licences to operate in Dubai.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Abu Dhabi’s DED announced similar exemptions ‘for establishments whose licences have expired for more than 24 months from paying the delayed and accumulated fees’. HE Mohammed Munif Al Mansoori, the Chief Executive of Abu Dhabi Business Centre, emphasised that the exemptions apply to all establishments regardless of their size or type. The exemptions are valid in all three of the main regions of the Emirate - Abu Dhabi, Al Dhafra and Al Ain.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Going the Extra Mile</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>3 Year AED 50bn Stimulus Package</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Executive Committee of the Abu Dhabi Executive Council discussed a three-year AED50 billion (US$13,624 million) economic stimulus initiative.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Sheikh Mohammed bin Zayed announced the plans for the project, which aims to support Abu Dhabi’s economic development by introducing ten key initiatives; some of which are detailed below:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">Abu Dhabi Office Space Exemption: All new business enterprises that register in the Emirate of Abu Dhabi will be exempt from the requirement of having an office or workspace in the Emirate for two years.</li>\r\n 	<li dir=\"LTR\">Boosting Growth and Competitiveness: There will be a variety of new public-private partnerships in the Emirate of Abu Dhabi: ‘The initiatives marked for 3Q18 also include encouraging and organising local production and supporting SMEs to boost their competitiveness locally and regionally, in addition to the issuance of dual licenses for companies in Abu Dhabi Free Zones to enable them to work outside the free zones and to participate in government tenders’.</li>\r\n 	<li dir=\"LTR\">Instant Licences: ‘During the last quarter of 2018, the Executive Committee will roll out its plan for the implementation of instant licensing systems in most commercial license types and all services provided by the Government, in addition to the review of building regulations for the infrastructure, residential properties, commercial and industrial sectors, as well as the developmental requirements and community facilities of other residential areas in Abu Dhabi, Al Ain and Al Dhafra’.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">As expected, these initiatives have created a huge media buzz in the country, with all sorts of opinions and questions being asked about what it all means for the future. While this largely remains to be seen, what really matters is that the governments are now acting decisively to address the biggest problem for most establishments in the UAE.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">This is at a time that the high costs of doing business in Dubai and Abu Dhabi have been boosted by the introduction of Value Added Tax (VAT) from the beginning of 2018.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Hype and Hard Numbers: the UAE was already a competitive country</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">These announcements are remarkable for two reasons. One is that so many of them have been made in a short period of time by the governments of the UAE, namely in Abu Dhabi and Dubai. The other is that conventional wisdom already sees the UAE as having a (very) competitive business environment in both a regional and a global context. A lot of positive publicity has, for instance, been generated by Expo 2020, which will take place in Dubai.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The hype is supported by hard numbers. In May 2018, the Lausanne-based Institute for International Management Development (IMD - a leading business school) published its 2018 World Competitiveness Ranking. The UAE is currently in seventh place overall (between Denmark and Norway), having been in 10th place in 2017. The UAE is ranked second of the 63 countries assessed in terms of business efficiency (after Hong Kong), third in terms of economic performance (after the United States and mainland China), and fourth for government efficiency (after Hong Kong, Switzerland and Singapore). The UAE is also the only GCC country whose ranking in terms of the Global Competitiveness Index (GCI) calculated by the World Economic Forum (WEF) has clearly improved over the last five years. In 2012-13, the UAE was ranked at 24/144. In 2017-18, the country’s position had advanced to 17/137</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong><img class=\"wp-image-8000 alignright\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/07/15-1.jpg\" alt=\"\" width=\"438\" height=\"345\" />Addressing the main problem, and ensuring a legacy beyond Expo 2020</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">A clue as to why the UAE’s governments are taking these steps now comes from that part of the WEF’s research, which deals with the most problematic factors for doing business, in the opinion of the various companies that were surveyed. In most of the Gulf Cooperation Council (GCC) countries, the key challenges are restrictive labour regulations and lack of access to finance. Lack of finance was the most serious problem in the UAE. However, inflation – a minor challenge in the other GCC countries - came in as a close second.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The impact of inflation depends on two factors. One is the rate of change of prices in the basket of goods and services that is being considered. The other is the base from which prices are rising. In the case of the UAE, that base is already high by global standards. In the Cost of Living survey compiled by consultancy Mercer in mid 2017, Dubai and Abu Dhabi were, respectively, the 19th and 22nd most expensive cities for expatriates. The survey covered 209 cities. The UAE’s two main cities are, for expatriates, about as costly as San Francisco (21st) and more expensive than London (29th).</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>To watch</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">While it is fair to say that the particulars of the announcements are not yet known; what we can rely on is the fact that the UAE has an excellent track record of following through in delivering their promises, meaning that investors and talented individuals alike should expect positive news in the near future.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">We believe that the key measure of success of the initiatives will be linked to the number of new enterprises that are incorporated in Dubai and Abu Dhabi in the future. With the array of incentives such as long term visas and reductions in set-up fees, it is hard to see why people would not jump at the chance of doing business in the region.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">For now, observers in the rest of the world will focus on the UAE like never before when Expo 2020 comes to Dubai. The latest announcements should have a positive impact on perceptions and the realities of the UAE’s economy.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Over the long-term, the governments will do whatever it takes to maintain the competitiveness of Dubai and Abu Dhabi in a regional, and indeed global, context. The UAE’s economy should continue to flourish and diversify long after Expo 2020.</p>\r\n<em>Al Tamimi &amp; Company’s Corporate Structuring team regularly advises on new changes taking place. For further information please contact Samer Qudah, s.qudah@tamimi.com.</em>'),
	(260529,25278,'CurrentUserID','1'),
	(260528,25278,'UserAgent','Mozilla/5.0 (Macintosh; Intel Mac OS X 10_13_2) AppleWebKit/537.36 (KHTML, like Gecko) Chrome/67.0.3396.99 Safari/537.36'),
	(260512,25277,'PostStatus','publish'),
	(260513,25277,'PostDate','2018-08-01 07:45:44'),
	(260514,25277,'PostUrl','http://localhost:8888/tamimi/law-update-articles/catching-the-wave-new-data-protection-law-in-bahrain/'),
	(260515,25277,'EditorLinkPost','http://localhost:8888/tamimi/wp-admin/post.php?post=7957&amp;action=edit'),
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	(260517,25277,'UserAgent','Mozilla/5.0 (Macintosh; Intel Mac OS X 10_13_2) AppleWebKit/537.36 (KHTML, like Gecko) Chrome/67.0.3396.99 Safari/537.36'),
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	(260520,25278,'PostID','7957'),
	(260521,25278,'PostType','law_update_articles'),
	(260522,25278,'PostTitle','Catching the wave: New Data Protection Law in Bahrain'),
	(260523,25278,'PostStatus','publish'),
	(260524,25278,'PostDate','2018-08-01 07:45:44'),
	(260525,25278,'PostUrl','http://localhost:8888/tamimi/law-update-articles/catching-the-wave-new-data-protection-law-in-bahrain/'),
	(260526,25278,'EditorLinkPost','http://localhost:8888/tamimi/wp-admin/post.php?post=7957&amp;action=edit'),
	(260527,25278,'ClientIP','86.98.5.18'),
	(260550,25280,'MetaValueNew','<p dir=\"LTR\" align=\"LEFT\"></p>\r\n<p dir=\"LTR\" align=\"LEFT\"><img class=\"size-full wp-image-8044 alignnone\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/07/cvdfd.jpg\" alt=\"\" width=\"6000\" height=\"2401\" /></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Bahrain’s Law on the Protection of Personal Data was published on 19 July 2018, and will come into effect on 1 August 2019. The Law will require a variety of changes to the way businesses process personal data in Bahrain or about residents of Bahrain. Data protection has not been a high priority topic for most businesses in Bahrain, with the limited exception of international entities subject to data protection requirements in other jurisdictions in which they operate. While the publication of the new Law provides a considerable lead-in period within which entities subject to the Law will need to comply, the fact that the Law creates criminal offences means that compliance is all the more important and should be treated as a high priority.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Until now, and with one exception (namely, Qatar), none of the Gulf Cooperation Council member states had a modern, nationally applicable data protection law. Legal issues relating to privacy and data protection are typically analysed in terms of general, and ill-fitting, criminal provisions relating to the unauthorized disclosure of secrets, or – in appropriate circumstances - industry-specific obligations relating to healthcare or credit data, or telecommunications sector subscriber data.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Law is generally composed of 60 articles divided into three broad sections or ‘titles’. These are:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">Title 1: Processing Provisions – Including definitions and general rules for the legality of processing, controls of data processing and transfer, statements as well as the rights of the data holder.</li>\r\n 	<li dir=\"LTR\">Title 2: Data Protection Authority - Including provisions relating to the establishment of the regulator, and its rights and responsibilities.</li>\r\n 	<li dir=\"LTR\">Title 3: Accountability of the data manager (data controller) and data processor – Including provisions relating to accountability to the regulator, investigation procedures, civil and criminal liability, and penalties for violation.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">In this article, we consider some key areas addressed in the Data Protection Law.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Application</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Bahrain’s Data Protection Law describes the legal protection of personal privacy as among the main constitutional rights of the person, and notes that it should be protected, particularly in the context of the increasing use of electronic/digital means for processing information.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Law applies to:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">Every individual residing normally in Bahrain or having a workplace in Bahrain, and every legal person (corporate) having a place of business in the Kingdom of Bahrain; and</li>\r\n 	<li dir=\"LTR\">Every individual not residing normally in Bahrain or having a workplace in Bahrain, and every legal person (corporate) not having a place of business in the Kingdom of Bahrain, where such persons are processing data using means available in Bahrain, except where such processing means are solely for the purpose of passing data through Bahrain.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">In this latter scenario, the legal person (corporate) is required to appoint an authorized representative in Bahrain, and notify the Authority of such appointment. This provision would appear to affect, for example, corporate customers of cloud service providers, where the customer is based outside Bahrain, and the services being provided to the customer are being provided from data centres located in Bahrain.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Criminal provisions</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Law criminalizes a variety of acts that would, at most, be the subject of administrative penalties in data protection laws elsewhere. Penalties generally comprise up to one year in prison and/or a fine of between BHD1,000 and BHD20,000 (between about USD 2,600 to about USD 53,000) (or a fine only in the case of corporate entities). The following are examples of activities that attract criminal penalties under the Law:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">processing sensitive personal data in violation of the provision specifying requirements for processing sensitive personal data;</li>\r\n 	<li dir=\"LTR\">transferring personal data outside Bahrain contrary to the provisions specifying requirements for transfers to jurisdictions that provide an adequate level of data protection, and associated exceptions;</li>\r\n 	<li dir=\"LTR\">processing personal data without notifying the Authority in accordance with the provision that sets out the obligation to notify the Authority before commencing any data processing activities (except where certain exceptions apply), or failing to update such notification to the Authority;</li>\r\n 	<li dir=\"LTR\">Processing personal data contrary to the provision that requires prior authorization from the Authority before processing personal data in certain circumstances;</li>\r\n 	<li dir=\"LTR\">Providing false or misleading information to the Authority or to a data subject, or withholding relevant information from the Authority, or otherwise hindering the Authority’s work; and</li>\r\n 	<li dir=\"LTR\">Disclosing any data or information accessed due to work, or using the same for own benefit or for the benefit of others unreasonably and in violation of the provisions of this law.</li>\r\n</ul>\r\n<img class=\"wp-image-8068 alignleft\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/08/56.jpg\" alt=\"\" width=\"429\" height=\"286\" />\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Security considerations</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Generally, the security of processing provisions, and the confidentiality provisions, appear to be fairly standard.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Data controllers are required to apply technical and organizational measures capable of protecting personal data against unintentional or unauthorized destruction, accidental loss, unauthorized alteration, disclosure or access, or any other form of processing. The measures adopted need to be appropriate, bearing in mind the nature of the data in question and the risks associated with processing it. The Law also indicates that ‘state-of-the-art’ technological protection measures should be adopted, but this is tempered by reference to the costs arising from use of such technology.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Additionally, the Law contemplates the issuance of a regulation specifying requirements that technical and organisational measures must satisfy. It also provides scope for specific requirements to be prescribed in such regulations.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Data controllers are required to maintain documentation that reflects the technical and organizational measures adopted. This documentation must be available for viewing by the parties concerned (presumably, including data subjects), as well as the Authority, any data processors, and the data controller itself.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">With regard to processing by data processors, the Law requires data controllers to engage only data processors who provide sufficient guarantees regarding the application of technical and organisational measures. Importantly, there is an obligation on data controllers to take steps to verify compliance with such measures, and to enter into a written contract with the data processor requiring that the data processor shall only process data in accordance with the instructions of the data controller, and in accordance with the data controller’s requirements with regard to security and confidentiality.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">There does not appear to be any specific obligation to notify the Authority in the event of a data breach incident. It is possible that this level of detail might be addressed in the regulations, or that the Authority is expected to address breaches only in the event that they become aware of them, and the circumstances indicate a breach of the obligation to use suitable technical and organizational security measures.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Data protection supervisor</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Law contemplates a role of ‘Data Protection Supervisor’ (which is not a data protection officer) intended to act as an independent and impartial intermediary between the data controller and the Authority.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The data protection supervisor will help the data controller fulfil its rights and obligations, and coordinate between the data controller and the Authority. It will also be required to verify the data controller’s processing in compliance with the law, alert the data controller to any apparent non-compliance to enable the issue to be addressed, and alert the Authority where such non-compliance has not been addressed within a specified timeframe. The data protection supervisor will also be required to maintain a register of the data controller’s processing operations that the data controller must notify the Authority, and update the Authority of the same on a monthly basis. (If no data protection supervisor is appointed, then the data controller is required to do this itself.)</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The qualifications and requirements for registration as a data protection supervisor will be officially issued, and data protection supervisors will need to be registered on a register maintained by the Authority. The requirement to appoint a data protection supervisor is optional, although it may be made compulsory for specific categories of data controllers.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The concept of a data protection supervisor has the potential to result in a whole new industry in the Bahrain market. The regulations setting out the requirements for the registration of data protection supervisors may shed greater light on what is anticipated, in terms of who might be able to fulfil such roles. The most natural development may be for the role to be filled by consulting/audit firms with expertise in data protection related issues.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Conclusion</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Bahrain’s new Data Protection Law will require a great deal of attention from businesses operating in Bahrain. Data protection has not been a high priority topic for most businesses in Bahrain, with the limited exception of international entities subject to data protection requirements in other jurisdictions in which they operate. While the publication of the new Law will result in some degree of a lead-in period within which entities subject to the Law will need to comply, the fact that the Law creates criminal offences means that compliance is all the more important and should be treated as a high priority.</p>'),
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	(261335,25344,'ReportText','<p dir=\"LTR\" align=\"LEFT\"><strong><img class=\"wp-image-7986 alignleft\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/07/74.png\" alt=\"\" width=\"1159\" height=\"389\" /></strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\"></p>\r\n<p dir=\"LTR\" align=\"LEFT\"></p>\r\n<p dir=\"LTR\" align=\"LEFT\"></p>\r\n<p dir=\"LTR\" align=\"LEFT\"></p>\r\n<p dir=\"LTR\" align=\"LEFT\"></p>\r\n<p dir=\"LTR\" align=\"LEFT\"></p>\r\n<p dir=\"LTR\" align=\"LEFT\"></p>\r\n<p dir=\"LTR\" align=\"LEFT\"></p>\r\n<p dir=\"LTR\" align=\"LEFT\"></p>\r\n<p dir=\"LTR\" align=\"LEFT\"></p>\r\n<p dir=\"LTR\" align=\"LEFT\"></p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Admissibility and Reliability of Electronic Evidence before Qatari courts</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Do the Qatari courts recognize a contractual relationship that results from an electronic transaction? Do the courts regard electronic evidence, such as emails and electronic receipts as admissible and reliable?</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Prior to the recent judgment of the Court of Cassation, the answer to the above questions would be negative. In fact, the Qatari courts had previously dismissed a few cases by denying the admissibility of electronic evidence following a challenge to its validity by the other party. In those cases, the courts held that there was no evidence reflecting the existence of the contractual relationship between the parties.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">However, in reliance on Law No. 16 of 2010 Promulgation of the Electronic Commerce and Transactions Law (\"The Electronic Commerce Law\"), the Court of Cassation has introduced a new principle which is considered to be a turning point for the admissibility and reliability of electronic evidence in litigation cases in Qatar.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Background to the Case</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Claimant had supplied and installed some medical equipment for the Defendant. The Claimant requested the Defendant to pay the outstanding amount for such service. However, the Defendant failed to pay any of the outstanding amounts. The Claimant sent email reminders to the Defendant requesting the Defendant to respect their agreement and pay the outstanding amounts, but the Defendant failed to respond and failed to pay the outstanding amounts.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>The Case at First Instance:</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">In 2012, the Claimant filed a civil case against the Defendant claiming the outstanding amount in addition to compensation as result of the non-payment.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Defendant argued that the case must be dismissed, alleging that there was no existing contractual relationship with the Claimant. In addition, the Defendant challenged the validity of the photocopies of the supporting documents submitted by the Claimant to substantiate the case.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Court of First Instance appointed an expert to review the case. He reported that there was correspondence which proved the existence of the contractual relationship between the parties, in addition to bank statements evidencing the partial payment of the outstanding amount made by the Defendant.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The First Instance Court dismissed the case based on the following grounds:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">The absence of evidence proving the existence of the contractual relationship between the Claimant and Defendant.</li>\r\n 	<li dir=\"LTR\">The Claimant’s inability to provide any original documents, all the submitted documentary evidence being photocopies - accepting the Defendant’s challenge to the validity of the same.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Ruling of the Court of Appeal</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Claimant appealed the decision of the Court of First Instance before the Court of Appeal. The Court of Appeal upheld the finding of the Court of First Instance and dismissed the appeal in 2016.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Judgment of the Court of Cassation</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Claimant challenged the decision of the Court of Appeal before the Court of Cassation. The Claimant relied on the ground that the Court of First Instance erred in its reasoning and application of the law on the facts of the case. The Claimant submitted that the Court of Appeal dismissed the case in contradiction of the following documents:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">The Claimant submitted documentary evidence such as photocopies of emails to prove the contractual relationship between the parties.</li>\r\n 	<li dir=\"LTR\">In addition, the \"copy\" document submitted by the Claimant was only copy of the bank statement to prove that the Defendant had already made partial payment for the outstanding amount due to the Claimant.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">The Court of Cassation accepted the Claimant’s argument and reversed the judgment of the Court of Appeal and confirmed the following important rules related to the enforcement of The Electronic Commerce Law :</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>1) The validity and the admissibility of the electronic transaction as evidence before the Court.</strong></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">In principle, in order for electronic evidence to be admissible before the court, it must:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">First take the form of a data message which, according to Article 1(4) of the Electronic Commerce Law is any type of information that was sent, received, displayed or stored by any means of electronic communications; and</li>\r\n 	<li dir=\"LTR\">Secondly, comply with the requirements of Article 26 of the Electronic Commerce Law, which states the following:</li>\r\n</ul>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>\"In assessing the evidential weight of information or document in the form of a data message, regard shall be had to the following:</em></p>\r\n\r\n<ol>\r\n 	<li dir=\"LTR\">The processes and circumstances under which the data message was generated, stored or communicated.</li>\r\n 	<li dir=\"LTR\">The processes and circumstances under which the integrity of the Information or document contained in the data message was maintained.\\</li>\r\n 	<li dir=\"LTR\">The processes and circumstances under which the originator of the data message was identified.</li>\r\n 	<li dir=\"LTR\">Any other relevant process or circumstances.\"</li>\r\n</ol>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Article 26 of the Electronic Commerce Law requires certainty of the origin of the data message and the identity of its receiver to ensure that the data message was not manipulated by the parties or was not a counterfeit. The court in some cases can appoint specialized experts to verify the accuracy of the data messages. As such, if such requirements are applied, then all electronic transactions made in the form of data message are equal to the written and signed documents, with regards to legal effect and admissibility in the court as reliable evidence.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Further, Article 20(1) of the Electronic Commerce Law explicitly states that any information in the form of a data message is legally admissible before a court, the legal effect of which cannot be denied.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Based on the above principles, the Court of Cassation held that all the information that was in the corresponding emails, the receipts and the bank letters are indeed data messages in terms of Article 1(4) and Article 26 of the Electronic Commerce Law.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Therefore, the Court of Cassation ruled that the documents submitted by the Claimant were legally effective and admissible before Court.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>2) Electronic transactions such as emails are a reliable means to constitute a valid offer and acceptance for the formation of an agreement.</strong></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The Court of Cassation held that, as the corresponding emails between the parties showed without a doubt that the parties intended to enter into an agreement, the judge could recognize the offer and acceptance from the electronic correspondence without the need of written documents. The fact that parties had not physically signed an agreement was not imperative. The Court supported its opinion by Article 4(1) of the Electronic Commerce Law which states:</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>\"An offer or acceptance of an offer may be expressed, in whole or in part, by means of electronic communications.\"</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The Court of Cassation ruled that electronic transactions have become essential as a means of conducting business or entering an agreement. The use of a paperless mechanism has become the most favourable means of communication between parties for expressing their intention to enter an agreement; therefore, it has become essential to regulate electronic transactions by issuing the Electronic Commerce Law.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Conclusion</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">This judgment issued by the Court of Cassation constitutes a reform of the methods of submitting proof before courts. The Court of Cassation gives evidential weight to electronic transactions which is equal to written documents in admissibility and reliability before the Qatari courts. In addition, the content of the electronic transactions can itself provide evidence of formation of binding agreements between parties.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><img class=\"size-full wp-image-7988 alignleft\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/07/55.png\" alt=\"\" width=\"3125\" height=\"1011\" /></p>|<p dir=\"LTR\" align=\"LEFT\"><strong><img class=\"wp-image-7986 alignleft\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/07/74.png\" alt=\"\" width=\"1159\" height=\"389\" /></strong></p>\r\n\r\n<h4 dir=\"LTR\" align=\"LEFT\"><strong>Admissibility and Reliability of Electronic Evidence before Qatari courts</strong></h4>\r\n<p dir=\"LTR\" align=\"LEFT\">Do the Qatari courts recognize a contractual relationship that results from an electronic transaction? Do the courts regard electronic evidence, such as emails and electronic receipts as admissible and reliable?</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Prior to the recent judgment of the Court of Cassation, the answer to the above questions would be negative. In fact, the Qatari courts had previously dismissed a few cases by denying the admissibility of electronic evidence following a challenge to its validity by the other party. In those cases, the courts held that there was no evidence reflecting the existence of the contractual relationship between the parties.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">However, in reliance on Law No. 16 of 2010 Promulgation of the Electronic Commerce and Transactions Law (\"The Electronic Commerce Law\"), the Court of Cassation has introduced a new principle which is considered to be a turning point for the admissibility and reliability of electronic evidence in litigation cases in Qatar.</p>\r\n\r\n<h4 dir=\"LTR\" align=\"LEFT\"><strong>Background to the Case</strong></h4>\r\n<p dir=\"LTR\" align=\"LEFT\">The Claimant had supplied and installed some medical equipment for the Defendant. The Claimant requested the Defendant to pay the outstanding amount for such service. However, the Defendant failed to pay any of the outstanding amounts. The Claimant sent email reminders to the Defendant requesting the Defendant to respect their agreement and pay the outstanding amounts, but the Defendant failed to respond and failed to pay the outstanding amounts.</p>\r\n\r\n<h4 dir=\"LTR\" align=\"LEFT\"><strong>The Case at First Instance:</strong></h4>\r\n<p dir=\"LTR\" align=\"LEFT\">In 2012, the Claimant filed a civil case against the Defendant claiming the outstanding amount in addition to compensation as result of the non-payment.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Defendant argued that the case must be dismissed, alleging that there was no existing contractual relationship with the Claimant. In addition, the Defendant challenged the validity of the photocopies of the supporting documents submitted by the Claimant to substantiate the case.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Court of First Instance appointed an expert to review the case. He reported that there was correspondence which proved the existence of the contractual relationship between the parties, in addition to bank statements evidencing the partial payment of the outstanding amount made by the Defendant.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The First Instance Court dismissed the case based on the following grounds:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">The absence of evidence proving the existence of the contractual relationship between the Claimant and Defendant.</li>\r\n 	<li dir=\"LTR\">The Claimant’s inability to provide any original documents, all the submitted documentary evidence being photocopies - accepting the Defendant’s challenge to the validity of the same.</li>\r\n</ul>\r\n<h4 dir=\"LTR\" align=\"LEFT\"><strong>Ruling of the Court of Appeal</strong></h4>\r\n<p dir=\"LTR\" align=\"LEFT\">The Claimant appealed the decision of the Court of First Instance before the Court of Appeal. The Court of Appeal upheld the finding of the Court of First Instance and dismissed the appeal in 2016.</p>\r\n\r\n<h4 dir=\"LTR\" align=\"LEFT\"><strong>Judgment of the Court of Cassation</strong></h4>\r\n<p dir=\"LTR\" align=\"LEFT\">The Claimant challenged the decision of the Court of Appeal before the Court of Cassation. The Claimant relied on the ground that the Court of First Instance erred in its reasoning and application of the law on the facts of the case. The Claimant submitted that the Court of Appeal dismissed the case in contradiction of the following documents:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">The Claimant submitted documentary evidence such as photocopies of emails to prove the contractual relationship between the parties.</li>\r\n 	<li dir=\"LTR\">In addition, the \"copy\" document submitted by the Claimant was only copy of the bank statement to prove that the Defendant had already made partial payment for the outstanding amount due to the Claimant.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">The Court of Cassation accepted the Claimant’s argument and reversed the judgment of the Court of Appeal and confirmed the following important rules related to the enforcement of The Electronic Commerce Law :</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>1) The validity and the admissibility of the electronic transaction as evidence before the Court.</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">In principle, in order for electronic evidence to be admissible before the court, it must:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">First take the form of a data message which, according to Article 1(4) of the Electronic Commerce Law is any type of information that was sent, received, displayed or stored by any means of electronic communications; and</li>\r\n 	<li dir=\"LTR\">Secondly, comply with the requirements of Article 26 of the Electronic Commerce Law, which states the following:</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\"><em>\"In assessing the evidential weight of information or document in the form of a data message, regard shall be had to the following:</em></p>\r\n\r\n<ol>\r\n 	<li dir=\"LTR\">The processes and circumstances under which the data message was generated, stored or communicated.</li>\r\n 	<li dir=\"LTR\">The processes and circumstances under which the integrity of the Information or document contained in the data message was maintained.\\</li>\r\n 	<li dir=\"LTR\">The processes and circumstances under which the originator of the data message was identified.</li>\r\n 	<li dir=\"LTR\">Any other relevant process or circumstances.\"</li>\r\n</ol>\r\n<p dir=\"LTR\" align=\"LEFT\">Article 26 of the Electronic Commerce Law requires certainty of the origin of the data message and the identity of its receiver to ensure that the data message was not manipulated by the parties or was not a counterfeit. The court in some cases can appoint specialized experts to verify the accuracy of the data messages. As such, if such requirements are applied, then all electronic transactions made in the form of data message are equal to the written and signed documents, with regards to legal effect and admissibility in the court as reliable evidence.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Further, Article 20(1) of the Electronic Commerce Law explicitly states that any information in the form of a data message is legally admissible before a court, the legal effect of which cannot be denied.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Based on the above principles, the Court of Cassation held that all the information that was in the corresponding emails, the receipts and the bank letters are indeed data messages in terms of Article 1(4) and Article 26 of the Electronic Commerce Law.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Therefore, the Court of Cassation ruled that the documents submitted by the Claimant were legally effective and admissible before Court.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>2) Electronic transactions such as emails are a reliable means to constitute a valid offer and acceptance for the formation of an agreement.</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Court of Cassation held that, as the corresponding emails between the parties showed without a doubt that the parties intended to enter into an agreement, the judge could recognize the offer and acceptance from the electronic correspondence without the need of written documents. The fact that parties had not physically signed an agreement was not imperative. The Court supported its opinion by Article 4(1) of the Electronic Commerce Law which states:</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><em>\"An offer or acceptance of an offer may be expressed, in whole or in part, by means of electronic communications.\"</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Court of Cassation ruled that electronic transactions have become essential as a means of conducting business or entering an agreement. The use of a paperless mechanism has become the most favourable means of communication between parties for expressing their intention to enter an agreement; therefore, it has become essential to regulate electronic transactions by issuing the Electronic Commerce Law.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Conclusion</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">This judgment issued by the Court of Cassation constitutes a reform of the methods of submitting proof before courts. The Court of Cassation gives evidential weight to electronic transactions which is equal to written documents in admissibility and reliability before the Qatari courts. In addition, the content of the electronic transactions can itself provide evidence of formation of binding agreements between parties.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><img class=\"size-full wp-image-7988 alignleft\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/07/55.png\" alt=\"\" width=\"3125\" height=\"1011\" /></p>'),
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	(261381,25348,'MetaValueNew','<p dir=\"LTR\" align=\"LEFT\"><strong><img class=\"wp-image-7986 alignleft\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/07/74.png\" alt=\"\" width=\"1159\" height=\"389\" /></strong></p>\r\n\r\n<h4 dir=\"LTR\" align=\"LEFT\"><strong>Admissibility and Reliability of Electronic Evidence before Qatari courts</strong></h4>\r\n<p dir=\"LTR\" align=\"LEFT\">Do the Qatari courts recognize a contractual relationship that results from an electronic transaction? Do the courts regard electronic evidence, such as emails and electronic receipts as admissible and reliable?</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Prior to the recent judgment of the Court of Cassation, the answer to the above questions would be negative. In fact, the Qatari courts had previously dismissed a few cases by denying the admissibility of electronic evidence following a challenge to its validity by the other party. In those cases, the courts held that there was no evidence reflecting the existence of the contractual relationship between the parties.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">However, in reliance on Law No. 16 of 2010 Promulgation of the Electronic Commerce and Transactions Law (\"The Electronic Commerce Law\"), the Court of Cassation has introduced a new principle which is considered to be a turning point for the admissibility and reliability of electronic evidence in litigation cases in Qatar.</p>\r\n\r\n<h4 dir=\"LTR\" align=\"LEFT\"><strong>Background to the Case</strong></h4>\r\n<p dir=\"LTR\" align=\"LEFT\">The Claimant had supplied and installed some medical equipment for the Defendant. The Claimant requested the Defendant to pay the outstanding amount for such service. However, the Defendant failed to pay any of the outstanding amounts. The Claimant sent email reminders to the Defendant requesting the Defendant to respect their agreement and pay the outstanding amounts, but the Defendant failed to respond and failed to pay the outstanding amounts.</p>\r\n\r\n<h4 dir=\"LTR\" align=\"LEFT\"><strong>The Case at First Instance:</strong></h4>\r\n<p dir=\"LTR\" align=\"LEFT\">In 2012, the Claimant filed a civil case against the Defendant claiming the outstanding amount in addition to compensation as result of the non-payment.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Defendant argued that the case must be dismissed, alleging that there was no existing contractual relationship with the Claimant. In addition, the Defendant challenged the validity of the photocopies of the supporting documents submitted by the Claimant to substantiate the case.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Court of First Instance appointed an expert to review the case. He reported that there was correspondence which proved the existence of the contractual relationship between the parties, in addition to bank statements evidencing the partial payment of the outstanding amount made by the Defendant.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The First Instance Court dismissed the case based on the following grounds:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">The absence of evidence proving the existence of the contractual relationship between the Claimant and Defendant.</li>\r\n 	<li dir=\"LTR\">The Claimant’s inability to provide any original documents, all the submitted documentary evidence being photocopies - accepting the Defendant’s challenge to the validity of the same.</li>\r\n</ul>\r\n<h4 dir=\"LTR\" align=\"LEFT\"><strong>Ruling of the Court of Appeal</strong></h4>\r\n<p dir=\"LTR\" align=\"LEFT\">The Claimant appealed the decision of the Court of First Instance before the Court of Appeal. The Court of Appeal upheld the finding of the Court of First Instance and dismissed the appeal in 2016.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"></p>\r\n\r\n<h4 dir=\"LTR\" align=\"LEFT\"><strong>Judgment of the Court of Cassation</strong></h4>\r\n<p dir=\"LTR\" align=\"LEFT\">The Claimant challenged the decision of the Court of Appeal before the Court of Cassation. The Claimant relied on the ground that the Court of First Instance erred in its reasoning and application of the law on the facts of the case. The Claimant submitted that the Court of Appeal dismissed the case in contradiction of the following documents:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">The Claimant submitted documentary evidence such as photocopies of emails to prove the contractual relationship between the parties.</li>\r\n 	<li dir=\"LTR\">In addition, the \"copy\" document submitted by the Claimant was only copy of the bank statement to prove that the Defendant had already made partial payment for the outstanding amount due to the Claimant.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">The Court of Cassation accepted the Claimant’s argument and reversed the judgment of the Court of Appeal and confirmed the following important rules related to the enforcement of The Electronic Commerce Law :</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>1) The validity and the admissibility of the electronic transaction as evidence before the Court.</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">In principle, in order for electronic evidence to be admissible before the court, it must:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">First take the form of a data message which, according to Article 1(4) of the Electronic Commerce Law is any type of information that was sent, received, displayed or stored by any means of electronic communications; and</li>\r\n 	<li dir=\"LTR\">Secondly, comply with the requirements of Article 26 of the Electronic Commerce Law, which states the following:</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\"><em>\"In assessing the evidential weight of information or document in the form of a data message, regard shall be had to the following:</em></p>\r\n\r\n<ol>\r\n 	<li dir=\"LTR\">The processes and circumstances under which the data message was generated, stored or communicated.</li>\r\n 	<li dir=\"LTR\">The processes and circumstances under which the integrity of the Information or document contained in the data message was maintained.\\</li>\r\n 	<li dir=\"LTR\">The processes and circumstances under which the originator of the data message was identified.</li>\r\n 	<li dir=\"LTR\">Any other relevant process or circumstances.\"</li>\r\n</ol>\r\n<p dir=\"LTR\" align=\"LEFT\">Article 26 of the Electronic Commerce Law requires certainty of the origin of the data message and the identity of its receiver to ensure that the data message was not manipulated by the parties or was not a counterfeit. The court in some cases can appoint specialized experts to verify the accuracy of the data messages. As such, if such requirements are applied, then all electronic transactions made in the form of data message are equal to the written and signed documents, with regards to legal effect and admissibility in the court as reliable evidence.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Further, Article 20(1) of the Electronic Commerce Law explicitly states that any information in the form of a data message is legally admissible before a court, the legal effect of which cannot be denied.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Based on the above principles, the Court of Cassation held that all the information that was in the corresponding emails, the receipts and the bank letters are indeed data messages in terms of Article 1(4) and Article 26 of the Electronic Commerce Law.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Therefore, the Court of Cassation ruled that the documents submitted by the Claimant were legally effective and admissible before Court.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>2) Electronic transactions such as emails are a reliable means to constitute a valid offer and acceptance for the formation of an agreement.</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Court of Cassation held that, as the corresponding emails between the parties showed without a doubt that the parties intended to enter into an agreement, the judge could recognize the offer and acceptance from the electronic correspondence without the need of written documents. The fact that parties had not physically signed an agreement was not imperative. The Court supported its opinion by Article 4(1) of the Electronic Commerce Law which states:</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><em>\"An offer or acceptance of an offer may be expressed, in whole or in part, by means of electronic communications.\"</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Court of Cassation ruled that electronic transactions have become essential as a means of conducting business or entering an agreement. The use of a paperless mechanism has become the most favourable means of communication between parties for expressing their intention to enter an agreement; therefore, it has become essential to regulate electronic transactions by issuing the Electronic Commerce Law.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Conclusion</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">This judgment issued by the Court of Cassation constitutes a reform of the methods of submitting proof before courts. The Court of Cassation gives evidential weight to electronic transactions which is equal to written documents in admissibility and reliability before the Qatari courts. In addition, the content of the electronic transactions can itself provide evidence of formation of binding agreements between parties.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><img class=\"size-full wp-image-7988 alignleft\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/07/55.png\" alt=\"\" width=\"3125\" height=\"1011\" /></p>'),
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	(261331,25344,'MetaValueNew','<p dir=\"LTR\" align=\"LEFT\"><strong><img class=\"wp-image-7986 alignleft\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/07/74.png\" alt=\"\" width=\"1159\" height=\"389\" /></strong></p>\r\n\r\n<h4 dir=\"LTR\" align=\"LEFT\"><strong>Admissibility and Reliability of Electronic Evidence before Qatari courts</strong></h4>\r\n<p dir=\"LTR\" align=\"LEFT\">Do the Qatari courts recognize a contractual relationship that results from an electronic transaction? Do the courts regard electronic evidence, such as emails and electronic receipts as admissible and reliable?</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Prior to the recent judgment of the Court of Cassation, the answer to the above questions would be negative. In fact, the Qatari courts had previously dismissed a few cases by denying the admissibility of electronic evidence following a challenge to its validity by the other party. In those cases, the courts held that there was no evidence reflecting the existence of the contractual relationship between the parties.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">However, in reliance on Law No. 16 of 2010 Promulgation of the Electronic Commerce and Transactions Law (\"The Electronic Commerce Law\"), the Court of Cassation has introduced a new principle which is considered to be a turning point for the admissibility and reliability of electronic evidence in litigation cases in Qatar.</p>\r\n\r\n<h4 dir=\"LTR\" align=\"LEFT\"><strong>Background to the Case</strong></h4>\r\n<p dir=\"LTR\" align=\"LEFT\">The Claimant had supplied and installed some medical equipment for the Defendant. The Claimant requested the Defendant to pay the outstanding amount for such service. However, the Defendant failed to pay any of the outstanding amounts. The Claimant sent email reminders to the Defendant requesting the Defendant to respect their agreement and pay the outstanding amounts, but the Defendant failed to respond and failed to pay the outstanding amounts.</p>\r\n\r\n<h4 dir=\"LTR\" align=\"LEFT\"><strong>The Case at First Instance:</strong></h4>\r\n<p dir=\"LTR\" align=\"LEFT\">In 2012, the Claimant filed a civil case against the Defendant claiming the outstanding amount in addition to compensation as result of the non-payment.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Defendant argued that the case must be dismissed, alleging that there was no existing contractual relationship with the Claimant. In addition, the Defendant challenged the validity of the photocopies of the supporting documents submitted by the Claimant to substantiate the case.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Court of First Instance appointed an expert to review the case. He reported that there was correspondence which proved the existence of the contractual relationship between the parties, in addition to bank statements evidencing the partial payment of the outstanding amount made by the Defendant.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The First Instance Court dismissed the case based on the following grounds:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">The absence of evidence proving the existence of the contractual relationship between the Claimant and Defendant.</li>\r\n 	<li dir=\"LTR\">The Claimant’s inability to provide any original documents, all the submitted documentary evidence being photocopies - accepting the Defendant’s challenge to the validity of the same.</li>\r\n</ul>\r\n<h4 dir=\"LTR\" align=\"LEFT\"><strong>Ruling of the Court of Appeal</strong></h4>\r\n<p dir=\"LTR\" align=\"LEFT\">The Claimant appealed the decision of the Court of First Instance before the Court of Appeal. The Court of Appeal upheld the finding of the Court of First Instance and dismissed the appeal in 2016.</p>\r\n\r\n<h4 dir=\"LTR\" align=\"LEFT\"><strong>Judgment of the Court of Cassation</strong></h4>\r\n<p dir=\"LTR\" align=\"LEFT\">The Claimant challenged the decision of the Court of Appeal before the Court of Cassation. The Claimant relied on the ground that the Court of First Instance erred in its reasoning and application of the law on the facts of the case. The Claimant submitted that the Court of Appeal dismissed the case in contradiction of the following documents:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">The Claimant submitted documentary evidence such as photocopies of emails to prove the contractual relationship between the parties.</li>\r\n 	<li dir=\"LTR\">In addition, the \"copy\" document submitted by the Claimant was only copy of the bank statement to prove that the Defendant had already made partial payment for the outstanding amount due to the Claimant.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">The Court of Cassation accepted the Claimant’s argument and reversed the judgment of the Court of Appeal and confirmed the following important rules related to the enforcement of The Electronic Commerce Law :</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>1) The validity and the admissibility of the electronic transaction as evidence before the Court.</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">In principle, in order for electronic evidence to be admissible before the court, it must:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">First take the form of a data message which, according to Article 1(4) of the Electronic Commerce Law is any type of information that was sent, received, displayed or stored by any means of electronic communications; and</li>\r\n 	<li dir=\"LTR\">Secondly, comply with the requirements of Article 26 of the Electronic Commerce Law, which states the following:</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\"><em>\"In assessing the evidential weight of information or document in the form of a data message, regard shall be had to the following:</em></p>\r\n\r\n<ol>\r\n 	<li dir=\"LTR\">The processes and circumstances under which the data message was generated, stored or communicated.</li>\r\n 	<li dir=\"LTR\">The processes and circumstances under which the integrity of the Information or document contained in the data message was maintained.\\</li>\r\n 	<li dir=\"LTR\">The processes and circumstances under which the originator of the data message was identified.</li>\r\n 	<li dir=\"LTR\">Any other relevant process or circumstances.\"</li>\r\n</ol>\r\n<p dir=\"LTR\" align=\"LEFT\">Article 26 of the Electronic Commerce Law requires certainty of the origin of the data message and the identity of its receiver to ensure that the data message was not manipulated by the parties or was not a counterfeit. The court in some cases can appoint specialized experts to verify the accuracy of the data messages. As such, if such requirements are applied, then all electronic transactions made in the form of data message are equal to the written and signed documents, with regards to legal effect and admissibility in the court as reliable evidence.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Further, Article 20(1) of the Electronic Commerce Law explicitly states that any information in the form of a data message is legally admissible before a court, the legal effect of which cannot be denied.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Based on the above principles, the Court of Cassation held that all the information that was in the corresponding emails, the receipts and the bank letters are indeed data messages in terms of Article 1(4) and Article 26 of the Electronic Commerce Law.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Therefore, the Court of Cassation ruled that the documents submitted by the Claimant were legally effective and admissible before Court.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>2) Electronic transactions such as emails are a reliable means to constitute a valid offer and acceptance for the formation of an agreement.</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Court of Cassation held that, as the corresponding emails between the parties showed without a doubt that the parties intended to enter into an agreement, the judge could recognize the offer and acceptance from the electronic correspondence without the need of written documents. The fact that parties had not physically signed an agreement was not imperative. The Court supported its opinion by Article 4(1) of the Electronic Commerce Law which states:</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><em>\"An offer or acceptance of an offer may be expressed, in whole or in part, by means of electronic communications.\"</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Court of Cassation ruled that electronic transactions have become essential as a means of conducting business or entering an agreement. The use of a paperless mechanism has become the most favourable means of communication between parties for expressing their intention to enter an agreement; therefore, it has become essential to regulate electronic transactions by issuing the Electronic Commerce Law.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Conclusion</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">This judgment issued by the Court of Cassation constitutes a reform of the methods of submitting proof before courts. The Court of Cassation gives evidential weight to electronic transactions which is equal to written documents in admissibility and reliability before the Qatari courts. In addition, the content of the electronic transactions can itself provide evidence of formation of binding agreements between parties.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><img class=\"size-full wp-image-7988 alignleft\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/07/55.png\" alt=\"\" width=\"3125\" height=\"1011\" /></p>'),
	(261332,25344,'MetaValueOld','<p dir=\"LTR\" align=\"LEFT\"><strong><img class=\"wp-image-7986 alignleft\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/07/74.png\" alt=\"\" width=\"1159\" height=\"389\" /></strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\"></p>\r\n<p dir=\"LTR\" align=\"LEFT\"></p>\r\n<p dir=\"LTR\" align=\"LEFT\"></p>\r\n<p dir=\"LTR\" align=\"LEFT\"></p>\r\n<p dir=\"LTR\" align=\"LEFT\"></p>\r\n<p dir=\"LTR\" align=\"LEFT\"></p>\r\n<p dir=\"LTR\" align=\"LEFT\"></p>\r\n<p dir=\"LTR\" align=\"LEFT\"></p>\r\n<p dir=\"LTR\" align=\"LEFT\"></p>\r\n<p dir=\"LTR\" align=\"LEFT\"></p>\r\n<p dir=\"LTR\" align=\"LEFT\"></p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Admissibility and Reliability of Electronic Evidence before Qatari courts</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Do the Qatari courts recognize a contractual relationship that results from an electronic transaction? Do the courts regard electronic evidence, such as emails and electronic receipts as admissible and reliable?</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Prior to the recent judgment of the Court of Cassation, the answer to the above questions would be negative. In fact, the Qatari courts had previously dismissed a few cases by denying the admissibility of electronic evidence following a challenge to its validity by the other party. In those cases, the courts held that there was no evidence reflecting the existence of the contractual relationship between the parties.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">However, in reliance on Law No. 16 of 2010 Promulgation of the Electronic Commerce and Transactions Law (\"The Electronic Commerce Law\"), the Court of Cassation has introduced a new principle which is considered to be a turning point for the admissibility and reliability of electronic evidence in litigation cases in Qatar.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Background to the Case</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Claimant had supplied and installed some medical equipment for the Defendant. The Claimant requested the Defendant to pay the outstanding amount for such service. However, the Defendant failed to pay any of the outstanding amounts. The Claimant sent email reminders to the Defendant requesting the Defendant to respect their agreement and pay the outstanding amounts, but the Defendant failed to respond and failed to pay the outstanding amounts.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>The Case at First Instance:</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">In 2012, the Claimant filed a civil case against the Defendant claiming the outstanding amount in addition to compensation as result of the non-payment.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Defendant argued that the case must be dismissed, alleging that there was no existing contractual relationship with the Claimant. In addition, the Defendant challenged the validity of the photocopies of the supporting documents submitted by the Claimant to substantiate the case.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Court of First Instance appointed an expert to review the case. He reported that there was correspondence which proved the existence of the contractual relationship between the parties, in addition to bank statements evidencing the partial payment of the outstanding amount made by the Defendant.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The First Instance Court dismissed the case based on the following grounds:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">The absence of evidence proving the existence of the contractual relationship between the Claimant and Defendant.</li>\r\n 	<li dir=\"LTR\">The Claimant’s inability to provide any original documents, all the submitted documentary evidence being photocopies - accepting the Defendant’s challenge to the validity of the same.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Ruling of the Court of Appeal</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Claimant appealed the decision of the Court of First Instance before the Court of Appeal. The Court of Appeal upheld the finding of the Court of First Instance and dismissed the appeal in 2016.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Judgment of the Court of Cassation</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The Claimant challenged the decision of the Court of Appeal before the Court of Cassation. The Claimant relied on the ground that the Court of First Instance erred in its reasoning and application of the law on the facts of the case. The Claimant submitted that the Court of Appeal dismissed the case in contradiction of the following documents:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">The Claimant submitted documentary evidence such as photocopies of emails to prove the contractual relationship between the parties.</li>\r\n 	<li dir=\"LTR\">In addition, the \"copy\" document submitted by the Claimant was only copy of the bank statement to prove that the Defendant had already made partial payment for the outstanding amount due to the Claimant.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">The Court of Cassation accepted the Claimant’s argument and reversed the judgment of the Court of Appeal and confirmed the following important rules related to the enforcement of The Electronic Commerce Law :</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>1) The validity and the admissibility of the electronic transaction as evidence before the Court.</strong></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">In principle, in order for electronic evidence to be admissible before the court, it must:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">First take the form of a data message which, according to Article 1(4) of the Electronic Commerce Law is any type of information that was sent, received, displayed or stored by any means of electronic communications; and</li>\r\n 	<li dir=\"LTR\">Secondly, comply with the requirements of Article 26 of the Electronic Commerce Law, which states the following:</li>\r\n</ul>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>\"In assessing the evidential weight of information or document in the form of a data message, regard shall be had to the following:</em></p>\r\n\r\n<ol>\r\n 	<li dir=\"LTR\">The processes and circumstances under which the data message was generated, stored or communicated.</li>\r\n 	<li dir=\"LTR\">The processes and circumstances under which the integrity of the Information or document contained in the data message was maintained.\\</li>\r\n 	<li dir=\"LTR\">The processes and circumstances under which the originator of the data message was identified.</li>\r\n 	<li dir=\"LTR\">Any other relevant process or circumstances.\"</li>\r\n</ol>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Article 26 of the Electronic Commerce Law requires certainty of the origin of the data message and the identity of its receiver to ensure that the data message was not manipulated by the parties or was not a counterfeit. The court in some cases can appoint specialized experts to verify the accuracy of the data messages. As such, if such requirements are applied, then all electronic transactions made in the form of data message are equal to the written and signed documents, with regards to legal effect and admissibility in the court as reliable evidence.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Further, Article 20(1) of the Electronic Commerce Law explicitly states that any information in the form of a data message is legally admissible before a court, the legal effect of which cannot be denied.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Based on the above principles, the Court of Cassation held that all the information that was in the corresponding emails, the receipts and the bank letters are indeed data messages in terms of Article 1(4) and Article 26 of the Electronic Commerce Law.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Therefore, the Court of Cassation ruled that the documents submitted by the Claimant were legally effective and admissible before Court.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>2) Electronic transactions such as emails are a reliable means to constitute a valid offer and acceptance for the formation of an agreement.</strong></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The Court of Cassation held that, as the corresponding emails between the parties showed without a doubt that the parties intended to enter into an agreement, the judge could recognize the offer and acceptance from the electronic correspondence without the need of written documents. The fact that parties had not physically signed an agreement was not imperative. The Court supported its opinion by Article 4(1) of the Electronic Commerce Law which states:</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>\"An offer or acceptance of an offer may be expressed, in whole or in part, by means of electronic communications.\"</em></p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The Court of Cassation ruled that electronic transactions have become essential as a means of conducting business or entering an agreement. The use of a paperless mechanism has become the most favourable means of communication between parties for expressing their intention to enter an agreement; therefore, it has become essential to regulate electronic transactions by issuing the Electronic Commerce Law.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Conclusion</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">This judgment issued by the Court of Cassation constitutes a reform of the methods of submitting proof before courts. The Court of Cassation gives evidential weight to electronic transactions which is equal to written documents in admissibility and reliability before the Qatari courts. In addition, the content of the electronic transactions can itself provide evidence of formation of binding agreements between parties.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><img class=\"size-full wp-image-7988 alignleft\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/07/55.png\" alt=\"\" width=\"3125\" height=\"1011\" /></p>'),
	(266850,25811,'MetaValueOld','<p dir=\"LTR\" align=\"LEFT\"><img class=\"alignright size-large wp-image-8023\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/07/shutterstock_775162108-389x1024.jpg\" alt=\"\" width=\"389\" height=\"1024\" />The suspension of an athlete or nation from participating in the Olympic Games is commonly considered to be the ultimate sporting sanction. Whilst the suspension of Russia from PyeongChang 2018 (and its reinstatement immediately afterwards) grabbed headlines, Kuwait remains subject to a ban imposed by the International Olympic Committee (\"IOC\") in 2015.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Kuwait’s National Olympic Committee (\"NOC\") is no stranger to Olympic exile, having been suspended by the IOC in 1986. More recently, Kuwait was warned by the IOC in 2007 that its sports legislation permitted governmental interference in the internal functioning of its NOC and other sporting federations, in violation of the Olympic Charter. When Kuwait did not address this issue by the IOC’s deadline of 31 December 2009, its NOC was suspended. This ban was lifted shortly before London 2012.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Further sports legislation was enacted in early 2015, however, that conferred upon the Kuwaiti Sports Ministry the power to assume control of national sporting bodies, as well the ability to control financial matters. Consequently, Kuwait’s NOC was disbanded by the Kuwaiti Sport Ministry, purportedly due to financial irregularities, as were nine other national federations. Interim committees were established to take over their administration, headed by figures widely reported to be loyal to the Kuwaiti Sports Ministry. The IOC took the view that Kuwait had failed to ameliorate the position by the IOC’s deadline of 27 October 2015; and, its NOC was suspended again. This came shortly after FIFA had imposed its own suspension on Kuwait’s football association (\"KFA\"), having failed to meet FIFA’s 15 October 2015 deadline for corrective action. Sixteen further international sports federations subsequently followed suit.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Subsequent Developments</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">In response to its censure by the international sporting community, Kuwait went on the offensive. In June 2016, the Kuwait government appealed the IOC suspension in the Swiss Civil Courts and claimed $1 billion compensation for losses flowing from the alleged unjust imposition of a suspension in the absence of an appropriate investigation. The appeal and compensation claim were dismissed in August 2016 and Kuwait was ordered to pay $11,500 towards the IOC’s legal costs. Also in June 2016, the Court of Arbitration for Sport (\"CAS\") rejected an appeal brought by a number of Kuwaiti football clubs (including the Kuwaiti Premier League champions, Kuwait Sporting Club) against the FIFA suspension.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In addition to legal proceedings, Kuwait has made frequent unsuccessful appeals to the IOC (and FIFA) for its suspension to be lifted. Numerous meetings have also taken place between Kuwaiti officials and the IOC, most notably that mediated by the United Nations in January 2016, at which the parties appeared to have to have reached an agreement in principle that Kuwait reportedly reneged upon at a later date.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">On 12 December 2016, Kuwait’s newly-elected parliament voted by a majority of over two thirds to amend the relevant sports legislation to facilitate re-admission to international sport. This vote unfortunately came too late for Kuwait to take part in the AFC Asian Cup Qualification final round, given that the deadline imposed by the Asian Football Conference (\"AFC\") for the KFA to be readmitted to FIFA membership was 18 December 2016.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In early 2017 the IOC are reported to have sent a letter to the Kuwaiti Sports Ministry setting three conditions for Kuwait’s re-acceptance into the Olympic Movement:</p>\r\n\r\n<ol>\r\n 	<li dir=\"LTR\">all relevant sport legislation must be amended in order to comply with the Olympic Charter;</li>\r\n 	<li dir=\"LTR\">all board member changes imposed upon Kuwait’s NOC and other sporting bodes must be revoked; and</li>\r\n 	<li dir=\"LTR\">all ongoing domestic and international cases against the IOC and other international sporting bodes must be dropped.</li>\r\n</ol>\r\n<p dir=\"LTR\" align=\"LEFT\">On 4 December 2017, Kuwait finally bowed to mounting domestic and international pressure by enacting new sports legislation purporting to replace all previous such laws and thus prevent governmental interference with Kuwaiti sporting bodies.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">FIFA lifted its ban on 6 December 2017. However, despite subsequent meetings taking place between Kuwaiti officials and the IOC, the Olympic ban remains in place.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>The wider context of governmental interference</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Sporting bodies are hard-wired to protect their autonomy to govern and regulate their sport, as enshrined in the Olympic Charter. A distinct body of law, lex sportiva, has developed over time to underpin the doctrine that sporting bodies are best placed to understand the unique circumstances of sport and manage them in a way that maximises wider societal benefits. The Olympic Charter promotes collaboration between sporting bodies and government, but prohibits interference. This begs the question as to where the line is between benign and undue governmental influence. Reasonable conditions attached to the receipt of public funds by sporting bodies for grassroots investment is an obvious example of the former, whereas a government retaining unfettered power to disband national sporting federations is an obvious example of the latter. However, there are a myriad of circumstances falling in between.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Kuwait is not alone in finding itself on the wrong side of the IOC due to governmental interference in sport:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">In July 2007, Panama was suspended by the IOC for governmental interference in the running of its NOC. The ban was lifted in April 2008 in time for the nation to compete at Beijing 2008. It was threatened with a further suspension in January 2011 when the Panamanian President demanded the resignation of NOC committee members, but this was averted when the issue was resolved to the IOC’s satisfaction.</li>\r\n 	<li dir=\"LTR\">In January 2011, Ghana’s NOC was suspended by the IOC for failing to amend its sports law to prevent the Ghanaian government from making presidential appointments to its NOC and numerous national sporting federations. The ban was lifted in October 2011 when a new sports law was enacted to prevent political interference, allowing the nation to compete at London 2012.</li>\r\n 	<li dir=\"LTR\">In June 2011, the IOC warned the Indian Sports Ministry that compelling national sporting federations to adopt mandatory eligibility requirements for officials constituted undue governmental interference. When the Indian government ignored this warning and the Olympic Association separately elected officials accused of corruption, the Indian NOC was suspended by the IOC for non-compliance with the Olympic Charter in December 2012. Somewhat uniquely, the IOC lifted this ban lifted four days into Sochi 2014 when new officials were elected, causing the Indian flag to be belatedly raised in the Olympic Village.</li>\r\n 	<li dir=\"LTR\">In 2015, Sri Lanka was warned by the IOC that it faced suspension if it did not revise proposed sports legislation that barred high-ranking officials from standing for re-election by the end of that year. This governmental interference was cited as a major reason for Sri Lanka being stripped of its hosting rights of the 2017 Asian Youth Games.</li>\r\n 	<li dir=\"LTR\">In August 2016, Kenya’s Sports Ministry disbanded its NOC and transferred its duties to Sports Kenya, in response to alleged mismanagement of Team Kenya at Rio 2016 by senior NOC officials. In March 2017, the IOC cut funding and threated suspension of the newly-formed NOC when it refused to accept IOC-requested governance reforms.</li>\r\n 	<li dir=\"LTR\">Recent reports suggest that Saudi Arabia is coming under increased scrutiny from the IOC and FIFA in connection with a growing trend of appointments for government-backed appointees to the Kingdom’s national sports federations. A suspension from international sport would impact the Kingdom’s successful national and club football teams and may also affect its progressive economic reforms, of which sport - and in particular the privatisation of its top-tier football clubs - is a central component, owing to sport’s increasingly valuable geo-political status in the GCC region.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">The IOC is, therefore, not afraid to adopt a robust approach if it considers that the Olympic Charter is being undermined by undue governmental interference. One particular area it has sought to control is the fall-out when relations between national governments and NOCs breakdown. In this regard the IOC has a number of weapons at its disposal, including proactive engagement with the parties, interim funding cuts, the threat of a suspension, and ultimately the imposition of a suspension. The political unpopularity of presiding over a nation suspended from the Olympics more often than not prompts governments to take the necessary remedial action.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Commentary</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The fact that the IOC has not yet followed FIFA’s lead in lifting its ban on Kuwait is an intriguing epilogue to this rather messy affair. The reasons for this are not clear, however it may be because Kuwait has not yet complied with the pre-conditions for re-acceptance (outlined above) to the IOC’s satisfaction. It may also be symptomatic of the deterioration in the relationship between Kuwait and the IOC. A string of previous broken promises and the instigation of a $1 billion lawsuit may have eroded the IOC’s trust in Kuwait delivering meaningful and lasting change this time around.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">What is certain is that the impact on Kuwaiti sport has been marked. Kuwaiti athletes were unable to represent their country at the 2010 Summer Youth Olympics, Rio 2016, and PyeongChang 2018; having to compete instead as neutral athletes under the Olympic flag. Indeed, Kuwait was denied its first ever Olympic gold medal when Kuwaiti shooter Fehaid Al-Deehani claimed the dubious honour at Rio 2016 of becoming the first athlete to win a gold medal as an Independent Olympic Athlete. Similarly, Kuwaiti football teams and clubs have been barred from international competitions (including the World Cup 2018 qualifiers and the AFC Asian Cup 2019) and the national team’s FIFA ranking has plummeted to 160 (having been as high as 24 in 1998). To add insult to injury, all IOC and FIFA financial development assistance has been stopped during the periods of suspension, which has severely affected the finances of Kuwaiti sport. Even more tragic is the impact on Kuwait’s grassroots participants and youth, who have cruelly been denied sporting heroes to aspire to and sporting goals to aim for, as well as their training programmes and facilities being starved of cash from the IOC and FIFA. Many talk of Kuwait’s ‘lost generation’ of talent and feel that lasting damage has been done.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">It is difficult not to draw comparisons with Russia’s 85 day IOC suspension for systemic manipulation of anti-doping rules which the IOC President Thomas Bach described as \"an unprecedented attack on the integrity of the Olympic games and sport\". There is little doubting that a Russian team appeared at PyeongChang 2018 in all but name (and arguably in name, being ‘Olympic Athletes from Russia’, as compared to Kuwait’s ‘Independent Olympic Athletes’), with its 168 athletes (only 64 less than at Sochi 2014) being cheered on by fans wearing Russian kit, waving Russian flags and singing the Russian anthem. Kuwait’s continuing IOC suspension, which in contrast to the Russian suspension does not implicate any individual athletes, does seem to disproportionately punish Kuwaiti athletes for what has been termed a power struggle between Kuwait’s ruling elite.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Now that certain roadblocks to reinstatement have been removed (as outlined above), it seems likely that the IOC ban will be lifted; however it remains to be seen when this will be and what further steps Kuwait will need to take to achieve it.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><em><img class=\"alignleft size-full wp-image-8022\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/07/RTHTF.jpg\" alt=\"\" width=\"5786\" height=\"1837\" /></p>\r\n&nbsp;<p dir=\"LTR\" align=\"LEFT\">NB: Please note a version of this article was first published on lawinsport.com on 15 June 2018 (https://www.lawinsport.com/topics/articles/item/governmental-interference-in-global-sport-why-kuwait-is-still-in-the-olympic-wilderness).</em></p>\r\n<em>Andrew (a.moroney@tamimi.com) is an Associate in Al Tamimi &amp; Company’s dedicated Sports &amp; Events Management team, working exclusively for clients in the sports and events sector on commercial, dispute resolution and regulatory matters. For further information please contact Steve Bainbridge (s.bainbridge@tamimi.com)</em>'),
	(264941,25642,'CurrentUserID','8'),
	(264942,25642,'CurrentUserRoles','a:2:{i:0;s:13:\"administrator\";i:1;s:10:\"superadmin\";}'),
	(264943,25643,'PostID','7940'),
	(264944,25643,'PostType','law_update_articles'),
	(264945,25643,'PostTitle','Stuck between a rock and a hard place… : The UK’s Unexplained Wealth Orders and the effect in the Middle East'),
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	(264956,25644,'PostTitle','Stuck between a rock and a hard place… : The UK’s Unexplained Wealth Orders and the effect in the Middle East'),
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	(264958,25644,'PostDate','2018-08-01 07:41:14'),
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	(264966,25645,'PostTitle','Stuck between a rock and a hard place… : The UK’s Unexplained Wealth Orders and the effect in the Middle East'),
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	(264969,25645,'PostDate','2018-08-01 07:41:14'),
	(264970,25645,'PostUrl','http://localhost:8888/tamimi/law-update-articles/stuck-between-a-rock-and-a-hard-place-the-uks-unexplained-wealth-orders-and-the-effect-in-the-middle-east/'),
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	(264972,25645,'MetaKey','content'),
	(264973,25645,'MetaValueNew','<img class=\"alignleft size-full wp-image-8002\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/07/17-1.png\" alt=\"\" width=\"3567\" height=\"715\" />\r\n\r\n&nbsp;\r\n\r\nThe UK legislature has recently introduced domestic legislation aimed at money launderers, potentially resulting in unintended consequences for foreign nationals who have legitimate assets in the UK. These orders demand the intended target provide information about the origin of their wealth, and refusal to disclose that information may render the target subject to criminal prosecution in the UK. However, if the foreign national does comply with the Unexplained Wealth Order (UWO), then that individual may be subject to criminal prosecution in another State… a real Catch 22.\r\n<p dir=\"LTR\" align=\"LEFT\">Controversially, there is no need for a foreign national to be accused of money laundering, or any criminality whatsoever, before they could be made subject to a UWO, which would lead to the freezing of their assets, or, worse, criminal prosecution.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The following article introduces UWOs to our clients and examines how one must be careful in weighing up their rights and obligations in respect of the request of a foreign State’s investigative authorities as it may impact their rights in the UAE, and around the GCC.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>What is a UWO?</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">On 31st January 2018, the UK introduced their latest attempt at stemming money laundering in the UK: Unexplained Wealth Orders. UWOs are civil investigative powers that are aimed at tackling those who use the UK as a destination for money laundering, or as a destination for those who wish to spend their ill-gotten gains.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">UWOs have been introduced in the UK at a time when London, and the UK, is facing scrutiny as a perceived hotbed of money laundering and revelry. A main proponent of UWOs has been Transparency International UK’s corruption taskforce, who, amongst others, have repeatedly called for greater investigative action to be taken in the UK against individuals and entities thought to have been complicit in corruption, and have led the drive to bring UWOs into action in UK law.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">UWOs are given legal effect pursuant to the UK Proceeds of Crime Act 2002 Article 362A, as introduced by the Criminal Finances Act 2017, and is defined in the legislation as:</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>‘An unexplained wealth order is an order requiring the respondent [i.e. the target of the order] to provide a statement—</em></p>\r\n\r\n<ul>\r\n 	<li><em>setting out the nature and extent of the respondent’s interest in the property in respect of which the order is made,</em></li>\r\n 	<li><em>explaining how the respondent obtained the property (including, in particular, how any costs incurred in obtaining it were met),</em></li>\r\n 	<li><em>where the property is held by the trustees of a settlement, setting out such details of the settlement as may be specified in the order, and</em></li>\r\n 	<li><em>setting out such other information in connection with the property as may be so specified.’</em></li>\r\n</ul>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The clear advantage that UWOs provide for UK investigative authorities is that it is no longer necessary for the UK authorities to demonstrate that an individual has been subject to a conviction for a criminal offence (either in the UK or abroad) in order to obtain information and take measures against a specific property.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Two months after the introduction of the legislation, in March 2018, it would appear that the first orders are now being made. We have seen the first use of these orders, not on a UK national, but on an Asian politician who owns two properties, worth USD $30 million, in the UK. The specific identity of this individual has not been disclosed as matters are ongoing, and no further details are available publically.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">This means that if an individual owns assets in the UK and they are made subject to a UWO, they will be forced to declare how they obtained this asset, and if they fail to do so they would be subject to criminal prosecution by the UK authorities. This may lead to foreign individuals being stuck between a rock and a hard place, with nowhere to turn and no route of escape.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Why is it Relevant To You?</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">As will be apparent from the first orders made against the Asian politician, whilst UWOs do apply to individuals who are reasonably suspected of being involved in crime, the UWOs will also target politically exposed individuals who have not been subject to criminal conviction, or investigation, either in the UK or internationally.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The definition of a PEP, or Politically Exposed Person, varies from State to State, but for the purposes of the UK legislation, the legislators have defined PEPs as the following:</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">‘(a) an individual who is, or has been, entrusted with prominent public functions by an international body or by a State other than the UK or other [European Economic Area] State;</p>\r\n<p dir=\"LTR\" align=\"LEFT\">(b) a family member of a person within paragraph (a); or</p>\r\n<p dir=\"LTR\" align=\"LEFT\">(c) known to be a close associate of a person within […] paragraph [a].’</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Evidently from this definition, paying particularly close attention to (c) namely ‘a close associate’ of an individual with prominent public functions, there is a very expansive definition of PEP, and this will likely include many unsuspecting individuals. The effect of this definition is that if you are an individual who has prominent public functions, or you are a close associate of another who has been entrusted with public functions, then you may now be targeted by the UK authorities with a UWO. Alarmingly, there is no need for you to have committed a crime, nor to have been suspected of being involved in a crime, for these orders to apply to you.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Specifically, when could a UWO apply?</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">A UK high court judge can give notice of a UWO if the judge is satisfied that it is likely that a foreign PEP (as defined above) is the owner of suspicious wealth in the UK beyond their means, and if all of the following provisions are met:</p>\r\n\r\n<ol>\r\n 	<li dir=\"LTR\">The respondent’s known income is insufficient to obtain the asset; and</li>\r\n 	<li dir=\"LTR\">The value of the asset is greater than £50,000 (approx. AED 260,000).</li>\r\n</ol>\r\n<p dir=\"LTR\" align=\"LEFT\">This legislation does not only target Foreign PEPs, but also where there are reasonable grounds to suspect any individual has been involved in serious crime.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Applications for UWOs may be made without notice. This means that there is no requirement on the UK investigative authority to notify the target of a UWO that they, or their assets, have been made subject of a UWO.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>What assets would this apply to?</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">A UWO can be made against assets whose value is greater than £50,000. There is no need for the PEP to be the sole owner of the property whose value is over £50,000, nor is it of relevance if the property was purchased prior to the introduction of the UK legislation.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>What is the effect?</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Following the making of an order by the High Court, the Court may order an individual’s property to be frozen, which would preclude the subject of the order from dealing with the property. As these freezing orders may be made without notice, this means that an individual’s assets may be frozen prior to their knowledge of any order being made against them.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The UWO will mandate the individual to explain, at a minimum:</p>\r\n\r\n<ol>\r\n 	<li dir=\"LTR\">The nature and extent of their interest in a particular property; and</li>\r\n 	<li dir=\"LTR\">Explain how the property was obtained.</li>\r\n</ol>\r\n<p dir=\"LTR\" align=\"LEFT\">An explanation will be requested by the UK authorities where ‘there are reasonable grounds to suspect that the respondent’s known lawfully obtained income would be insufficient to allow the respondent to obtain the property’.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Failing to Comply?</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Should the target of a UWO fail to comply with an order, or provide inaccurate or misleading information, then they will likely be subject to criminal sanction in the UK and may face a period of imprisonment and a financial penalty.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Within the legislation, it is stated that a UWO could lead to criminal liability for a target if that individual fails, without reasonable excuse, to comply with the requirements imposed by the Court against that individual. There is no definition of what a reasonable excuse would be in the legislation, and is a subjective requirement that would be decided in Court during the course of litigation.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong><img class=\"wp-image-8014 alignleft\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/07/Screen-Shot-2018-07-31-at-5.43.01-PM-242x300.png\" alt=\"\" width=\"304\" height=\"377\" /></strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>A View from the East: Stuck between a Rock and a Hard Place?</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">These orders, whilst designed to tackle money laundering on a global scale, and limit the use of the UK jurisdiction for those who seek to gain from their ill-gotten earnings, may cause legal difficulties for individuals based in foreign jurisdictions who are subject to UWOs – such as the UAE and the wider GCC – due to a conflict of laws between this UK legislation and that of other countries. This conflict could lead to an individual’s adherence to UK legislation meaning that the individual would be liable to prosecution in other jurisdictions.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Taking the UAE as a representative example of the Middle East’s approach to confidential or private information, the UAE’s jurisdiction imposes very strict obligations on an individual’s use and disclosure of confidential information. It is a criminal offence, pursuant to the UAE’s Federal Law No. 3 of 1987, as amended by Federal Decree No. 7 of 2016 (UAE Penal Code) to disclose secret information. Secret information is afforded an expansive definition in the UAE Penal Code and it is commonly viewed any information that is confidential, i.e. not in the public domain, and that an individual possesses due to their employment or individual nature.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Furthermore, due to the extraterritorial nature of the UAE Penal Code, should an individual commit a crime that is wholly or partly committed within the UAE, then that individual would be bound by the provisions of the Penal Code, and would be bound by provisions such as the disclosure of secret information. Specifically, should an individual be requested to provide secret information, such as the source of funds from a business entity, to the UK authorities, and that information relates to a UAE business or UAE based individual, then if the material or information is disclosed following a UWO in the UK, then in the UAE the individual may be subject to criminal prosecution for disclosing that exact information.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">There is no exception afforded under UAE domestic legislation that would permit an individual to disclose confidential information to a foreign investigative authority (such as the UK’s Serious Fraud Office, Financial Conduct Authority, or National Security Agency). Should that individual disclose such information to the UK’s, or any other foreign State’s, investigative authority, then that individual may be liable to prosecution in the UAE in the same manner as though the disclosure had been made to a private individual or entity.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Prosecution for disclosing confidential information is a serious offence in the UAE, and one that may carry a mandatory minimum period of imprisonment. Accordingly, the stakes are very high when one is subject to an international request for judicial assistance, in any form, and it is for that reason and in order to assist with international criminal investigations that the UAE has entered into number multilateral and bilateral treaties aimed at assisting mutual judicial assistance requests. As with most international requests from law enforcement agencies, such requests should follow the usual diplomatic channels through the deployment of letters rogatory.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The difficulties for UAE individuals would not stop simply at the threat of criminal sanction, but also according to the UAE’s Labour Law, should an individual disclose the secrets of their employer, then the worker may be dismissed without notice and forfeit their entire severance pay.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Accordingly, the receipt of a UWO in the UK demanding that an individual provide information to the UAE authorities may conflict with the statutory protection relating to confidential information (or other laws) in a foreign jurisdiction, such as the UAE. This would lead to the precarious situation where an individual may face prosecution in the UK if he doesn’t comply with the UWO, but criminal prosecution in the UAE if he does comply.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Conclusion</strong></p>\r\nThe above example and review provides a very high-level overview of the competing laws that the UK’s UWOs may catch. Whilst the UK legislation will no doubt serve as an effective deterrent and useful tool in minimising global money laundering, and limiting the attraction of the UK for criminals, it may have unintended consequences for foreign nationals holding legitimate assets in the UK. Prior to making any response to a request for assistance, it is imperative that the recipient apprise themselves of all legal considerations to ensure that they are not jumping out of the frying pan, but straight into the fire.'),
	(263138,25494,'MetaLink','content'),
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	(263140,25494,'ReportText','<p dir=\"LTR\" align=\"LEFT\"><strong><img class=\"alignleft size-full wp-image-7996\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/07/June-July-2018.jpg\" alt=\"\" width=\"1249\" height=\"287\" />Introduction</strong></p>\r\n&nbsp;<p dir=\"LTR\" align=\"LEFT\">An initial public offering (\"IPO\") is a process by which a company offers its shares, for the first time, to the public by virtue of drafting and publishing a prospectus on the company and carrying out a public subscription of its shares, after submitting required documentation to the relevant governmental authorities and obtaining their approvals in relation thereto.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Under the laws and regulations of the United Arab Emirates (\"UAE\"), in order for a company to offer its shares to the public, the said company must be or take up the legal form of a public joint stock company. Accordingly, a company wishing to execute an IPO will be either a newly incorporated public joint stock company, or a company assuming the legal form of a private joint stock company or a limited liability company that undergoes a conversion process to become a public joint stock company.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Introducing a brief on the history of IPOs in the UAE, there have only been a few IPOs in the past few years, only two of which have been executed in 2017 after the issuance of the new UAE Federal Law No. 2 of 2015 concerning Commercial Companies (\"Companies Law\"). We envisage that, in 2018, the market appetite will uphold the trend of one to two IPOs a year.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">It is also worth noting in this regard that the companies that have undergone IPOs in the period between 2014 until 2017 operated in fundamental yet diversified industries such as the real estate, investment, leisure and entertainment, and oil and gas sectors.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Generally speaking, companies that choose to go public in the UAE and offer their shares in an IPO usually seek to raise their capital in global markets. This is supported and facilitated by the local regulators and the regulatory schemes set by the governmental authorities.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">It should be noted that, for the purposes of this chapter, any reference to the UAE (which includes the Emirates of Abu Dhabi, Dubai and the five other emirates making up the UAE) excludes the geographical areas of the Dubai International Financial Centre (\"DIFC\") and the Abu Dhabi General Market (\"ADGM\"). The civil and commercial laws of the UAE (including the UAE’s securities market laws and regulations discussed in this chapter) are not applicable to the DIFC or ADGM and vice versa.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In the UAE, there are three financial exchange markets, two of which are onshore, being the Abu Dhabi Securities Exchange (\"ADX\") and Dubai Financial Market (\"DFM\"), while the third financial market is located within the jurisdiction of the DIFC, being NASDAQ Dubai. ADX and DFM are subject to the supervisory authority of the UAE Securities and Commodities Authority (\"SCA\"), while the Dubai Financial Supervisory Authority regulates NASDAQ Dubai in its capacity as the securities supervisory authority within the DIFC. As at the time of writing, there is no financial market that is located in the ADGM.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><span lang=\"EN\">This chapter excludes any regulations applicable to NASDAQ Dubai and any of the below regulations are applicable only to ADX and DFM where the text allows for the same.</span></p>\r\n<p dir=\"LTR\" align=\"LEFT\">ADX and DFM are governed and regulated by SCA, which has the authority to impose laws, regulations and standards with which both ADX and DFM must comply. ADX and DFM work proactively with SCA to protect investors and provide optimum trading platforms for securities trading.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Both ADX and DFM operate as a securities exchange market for trading securities including shares issued by public joint stock companies.</p>\r\n&nbsp;<p dir=\"LTR\" align=\"LEFT\"><strong>The IPO process: steps, timing and parties and market practice</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Despite the fact that an IPO is a process carried out in a very similar manner across the globe, the mechanics of such procedure differ from one country to another in terms of the applicable laws and regulations, required documentation, governmental approvals, and timeline of its procedures.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The IPO process in the UAE slightly varies according to the business and structure of the company undergoing the IPO process, i.e. whether the company is a newly established public joint stock company or a company undergoing a conversion process to become a public joint stock company, in which emirate the company has its place of business and on which market the company will be listed. Accordingly, we have set out below two different procedures and series of steps for each company structure as detailed hereunder.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Newly established public joint stock company</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><em>First stage: initial approvals</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Generally, greenfield (i.e. newly established) public joint stock companies require additional approvals from SCA to go through the route of the IPO. Some of these requirements include: (i) a special approval from the board of directors of SCA for incorporating the greenfield company; (ii) there is sufficient working capital for the twelve (12) months post the incorporation; and (iii) the offered shares are limited to qualified institutional investors and high-net-worth individuals for amounts that are no less than AED 5 million.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The founders committee of the new company (to be established) must refer to the Department of Economic Development (\"DED\") to obtain initial approval to establish the company as a public joint stock company in accordance with the provisions of Article (113) of the Companies Law.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">After obtaining the approval of the DED, the founders committee must apply for the preliminary approval of SCA for the establishment of the public joint stock company, accompanied by all the necessary documents; namely, the memorandum of association (\"MoA\"), articles of association (\"AoA\"), an economic feasibility study for the venture, the SCA application form requesting incorporation of a public joint stock company, a draft prospectus, a subscription application form, and evidence of payment in respect of subscription.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">If the company has shares issued in-kind, the value of the in-kind shares will be assessed by one or more financial advisors chosen by SCA from those accredited by it, or those with technical and financial expertise in the subject of evaluation who are approved by SCA. SCA then considers the application for incorporation and notifies the founders committee of its observations within ten (10) working days from the date of submission of the application in full.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The founders committee completes any deficiencies or makes the amendments deemed necessary by SCA to complete the application for incorporation within fifteen (15) working days from the date of notification. Otherwise, SCA may consider this a waiver of the application for incorporation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">SCA sends a copy of the documents to the DED after they have been completed. (The period of SCA’s review is ten (10) working days from the date of completing the application.)</p>\r\n<p dir=\"LTR\" align=\"LEFT\">A meeting is then held between SCA and the DED to study the application for incorporation and its documents. The meeting must be held within ten (10) working days from the date of the submission of documents by SCA to the DED.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In case there are any comments made by the DED, SCA informs the founders committee. The amendments are be made within ten (10) working days from the date of informing the founders committee.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">SCA ensures that the application and all documents and observations are completed and that the amended versions are sent to the DED. No particulars may be amended in the application after submitting it to the DED during any stage of incorporation either in respect of the capital of the company or its objectives or the names of its founders or any other data in the application for incorporation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">On approval of the incorporation application, the DED then issues a decision to license the incorporation of the company, which is announced in the official gazette at the expense of the founders.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Second stage: pre-subscription period</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The founders committee attest the MoA and AoA before a notary public.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Third stage: public subscription/public offering</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The founders committee must then commence the subscription process, as per the template provided by SCA, for the shares within fifteen (15) days from the date of issuance of the above-mentioned decision. The founders shall subscribe for not less than thirty percent (30%) and not more than seventy percent (70%) of the issued capital of the company, prior to the invitation to public subscription and offering for the remaining percentage of the share capital. In this regard, the founders may not subscribe to the shares offered for public subscription.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">N.B.: Prior to such step, the founders committee must provide SCA and the DED with a bank certificate evidencing payment of the value of their shares in accordance with the above-prescribed percentages. Additionally, they must submit an undertaking, as per the template provided by SCA, to deposit the proceeds generated from the subscription of the total shares to the account of the company under incorporation as well as refunding the surplus funds to subscribers within fifteen (15) days from the date of the subscription closure, if any.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Once SCA’s approval of the prospectus is obtained, the prospectus is then published in two local Arabic daily newspapers at least five (5) days prior to commencement of the subscription. This is the invitation to the public offering.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The subscription must be kept open for no less than ten (10) days and no more than thirty (30) days, open to extension by an additional period of ten (10) days subject to SCA and the DED’s approvals.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">A company issuing its shares in accordance with the share book-building mechanism shall enter into a contract with a financial advisor in order to carry out the IPO and for them to supervise the same. Such financial advisor shall have a number of roles, including presenting the company’s business to investors and ultimately setting the price of shares in the final prospectus after analysing the data from the book-building.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Companies issuing shares in an IPO process, and wishing to use the book-building process, must comply with the following:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">An application will be submitted to SCA using the form prepared for such purpose in order to obtain approval on book-building.</li>\r\n 	<li dir=\"LTR\">The company shall neither announce nor disclose, by any means whatsoever, its intention to issue or sell shares through the book-building process before obtaining SCA’s approval.</li>\r\n 	<li dir=\"LTR\">Not less than twenty percent (20%) of the subscription shares shall be offered to retail investors, and not less than sixty percent (60%) shall be offered to qualified investors, excluding newly established companies, in which case the subscription is restricted to qualified investors only.</li>\r\n 	<li dir=\"LTR\">Allocate to qualified investors, based upon the subscription applications submitted by them, any shares not subscribed by retail investors.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">The price set for retail investors may be discounted compared to the one set for qualified investors in accordance with disclosures made in the final prospectus.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Retail investors shall pay the full value of their subscribed shares upon subscription. Qualified investors may pay the value of their subscribed shares after allocation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The allotment of shares and refund of the surplus funds must be made within five (5) working days from the date of the subscription. In the event that the subscription applications exceed the number of shares offered, the shares shall be distributed to subscribers proportionally to their subscribed amounts or as determined in the prospectus and approved by SCA, and the distribution shall be made to the nearest whole share.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">After the allocation has been made, the company must send the shareholders register to the UAE financial market (i.e. ADX or DFM) on which the shares will be listed.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The entities receiving the subscription keep the payments made by subscribers; in this regard any returns gained in relation thereto are for the account of the company under incorporation. The receiving entities will not deliver such amounts to the board of directors until the incorporation certificate has been issued and the company is registered before the commercial registrar at the DED.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Fourth stage: incorporation announcement</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The company must announce an invitation to the subscribers to attend the constitutive general assembly meeting (after obtaining approval of SCA) to be held within fifteen (15) days from the date of the subscription closure. The agenda of the first constitutive general assembly must include certain matters prescribed by the SCA.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">If a quorum has not been met at the first meeting, the meeting must be held within five (5) to fifteen (15) days from the date of the first meeting, and the second meeting will be deemed to satisfy the legal quorum regardless of the number of the attendees.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Within ten (10) days from the date of the constitutive general assembly, the founders will submit an application to SCA, for issue of the incorporation certificate, and will enclose the documents stipulated under Article (133) of the Companies Law.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Afterwards, SCA issues the incorporation certificate within five (5) working days.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Fifth stage: registration before the competent authorities and SCA</em></p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">The board of directors of the newly incorporated company must complete the registration procedures before DED in anticipation of its listing in the financial market within ten (10) days from the date of issuance of the incorporation certificate.</li>\r\n 	<li dir=\"LTR\">The DED must then register the company before the commercial registrar and issue the company’s trade licence within five (5) working days.</li>\r\n 	<li dir=\"LTR\">Afterwards, the chairman of the board of directors of the newly incorporated company must, within five (5) working days from the date of issuance of the company’s trade licence, provide the AoA, MoA and company licence to the company registrar to register the company in the companies register.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Sixth stage: listing on UAE financial markets</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The board of directors of the newly incorporated company must, within fifteen (15) working days from the date of the company’s registration before the commercial registrar, list its shares on any of the UAE financial markets (i.e. ADX or DFM) and revert to such financial market with a listing request in accordance with the listing regulations adopted by SCA and the financial market on which the shares will be listed.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Newly converted public joint stock company</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Existing companies wishing to convert into public joint stock companies follow the same rules and steps applicable to newly established public joint stock companies except in relation to the following:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">Companies wishing to convert into a public joint stock company are required to fulfil, amongst others, the following requirements:\r\n<ul dir=\"ltr\">\r\n 	<li dir=\"LTR\">the value of the issued shares of the company wishing to convert has been paid in full;</li>\r\n 	<li dir=\"LTR\">the completion of at least two fiscal years prior to the application;</li>\r\n 	<li dir=\"LTR\">the company has realised, within the two financial years preceding the approval on the conversion application, net operational profits that are distributable to shareholders of no less than ten percent (10%) of the company’s capital as an average; and</li>\r\n 	<li dir=\"LTR\">a special resolution (depending on the legal form of the company and its constitutional documents, this should be passed by no less than three quarters of either: (i) the share capital of the company; or (ii) the shares being represented in a general assembly meeting) issued by the shareholders of the company approving its conversion into a public joint stock company.</li>\r\n</ul>\r\n</li>\r\n 	<li dir=\"LTR\">The founders may sell by way of IPO up to thirty percent (30%) of its share capital. In this regard, the founders may not subscribe to the shares offered for public subscription.</li>\r\n 	<li dir=\"LTR\">The founders committee (to be established by way of a shareholders’ resolution) of the existing company that wishes to convert to a public joint stock company must draft a letter to SCA requesting a listing window reservation and confirming eligibility.</li>\r\n 	<li dir=\"LTR\">Afterwards, the founders committee applies to SCA for a public joint stock conversion accompanied by its shareholders’ resolution approving such conversion.</li>\r\n 	<li dir=\"LTR\">Simultaneously, the said company appoints, approves and forms the said founders committee.</li>\r\n 	<li dir=\"LTR\">Subsequently, the founders committee files with SCA the first draft of the local prospectus as well as the shareholders’ resolution of the existing company approving the conversion, a final draft of the IPO MoA and AoA, a business plan review, and a final real estate valuation report.</li>\r\n 	<li dir=\"LTR\">SCA will examine the conversion application and filed documents and produce a decision on the request within a period of ten (10) working days.</li>\r\n 	<li dir=\"LTR\">In case of approval of the conversion by SCA, the founders committee must announce the conversion and notify its shareholders and creditors (if any) of such conversion via written notice within a period of five (5) working days from the date of SCA’s approval.</li>\r\n 	<li dir=\"LTR\">Shareholders and/or creditors of the company are given a period of fifteen (15) working days to object to the conversion.</li>\r\n 	<li dir=\"LTR\">Afterwards, the company files with SCA a copy of the resolution and confirmation that the opposition period has expired. SCA forms a committee to evaluate the company assets. The process of this evaluation process is thirty (30) working days.</li>\r\n 	<li dir=\"LTR\">A meeting between SCA and the DED is then held to examine the conversion application and its documents. The time for such procedure is five (5) working days.</li>\r\n 	<li dir=\"LTR\">In case of final approval of the conversion application, SCA issues a licence to the company and such licensing decision is then published in the official gazette at the expense of the company founders.</li>\r\n 	<li dir=\"LTR\">The company then proceeds with the IPO and listing in the same manner as a newly established public joint stock company.</li>\r\n</ul>\r\n&nbsp;<p dir=\"LTR\" align=\"LEFT\"><strong>Regulatory architecture: overview of the regulators and key regulations</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The key regulators in the UAE in respect of the IPO process are the Securities and Commodities Authority (SCA) and the Department of Economic Development (DED). Additionally, and depending on the nature of the company’s business, the company may be required to obtain the approval of other relevant governmental authorities or regulators such as the Central Bank or the Insurance Authority in the UAE.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Other than the key regulators mentioned above and as part of the IPO process, the company is required to liaise with ADX or DFM for the listing of its shares and their offering to the public.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In addition to the Companies Law, one of the important regulations in respect of an IPO are the Companies Law, and the Chairman of SCA’s Resolution No. (11/R.M.) of 2016 governing public offering and issuance of shares of public joint stock companies.</p>\r\n&nbsp;<p dir=\"LTR\" align=\"LEFT\"><strong>Public company responsibilities</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Public joint stock companies are subject to a more refined governing structure in comparison to other legal forms of companies. The main differences manifest in the ‘corporate governance’ and the ‘disclosure and transparency’ regulations applicable to public joint stock companies.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Disclosure and transparency regulations</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Post the IPO, the company and its shareholders have additional disclosure and transparency obligations, which include restrictions on dealing with the securities of the company, notification obligations in relation to material developments affecting the company, restrictions on publishing certain data relating to the company and to provide SCA with copies of certain documents including financial reports, and details of general assemblies and resolutions.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Corporate governance regulations</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Public joint stock companies are obliged to follow separate regulations for corporate governance in addition to those specified in the Companies Law. Such set of corporate governance regulations can be found in SCA’s Resolution No. (7/R.M.) of 2016 concerning the standards of institutional discipline and governance of public joint stock companies (\"CGR\"). These include, amongst other obligations (i) that the company is obliged to obtain approval from its shareholders and maintain records of transactions that take place with related parties, (ii) all shares issued in the company must be in the same class with equal rights attached to them, (iii) the AoA and internal by-laws of the company should include controls to protect shareholders’ rights, and (iv) the company must have internal control systems to ensure compliance with corporate governance rules.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The company is also obliged to issue a ‘Corporate Governance Report’, which has to provide details of all remuneration and compensation paid to the board; such report must be available to the shareholders prior to the annual general meeting.</p>\r\n&nbsp;<p dir=\"LTR\" align=\"LEFT\"><strong>Potential risks, liabilities and pitfalls</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Given that the IPO is a simple and straightforward process, there should be no potential legal risks, liabilities or pitfalls with regards to undertaking the IPO process should the above-mentioned procedures be thoroughly followed and all governmental approvals obtained. This is notwithstanding any risks, liabilities and pitfalls related to the business of the company itself or any market risks occurring during the IPO process. However, any negligence on the part of the company or its advisors may expose the company and its founders to risk. The IPO is a lengthy and detailed process that needs to be dealt with by advisors who are experienced in the field of IPOs, in order for them to handle the requirements and ensure compliance with all regulations in an efficient manner and minimise any risk to the company and its founders.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><em><img class=\"alignleft size-full wp-image-7998\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/07/shutterstock_589011317.jpg\" alt=\"\" width=\"5472\" height=\"2384\" />Acknowledgment</em></p>\r\n<em>The authors would like to thank Sarah Tomy and Anna Robinson for their invaluable assistance in the preparation of this chapter.</em>|&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong><img class=\"alignleft size-full wp-image-7996\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/07/June-July-2018.jpg\" alt=\"\" width=\"1249\" height=\"287\" />Introduction</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">An initial public offering (\"IPO\") is a process by which a company offers its shares, for the first time, to the public by virtue of drafting and publishing a prospectus on the company and carrying out a public subscription of its shares, after submitting required documentation to the relevant governmental authorities and obtaining their approvals in relation thereto.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Under the laws and regulations of the United Arab Emirates (\"UAE\"), in order for a company to offer its shares to the public, the said company must be or take up the legal form of a public joint stock company. Accordingly, a company wishing to execute an IPO will be either a newly incorporated public joint stock company, or a company assuming the legal form of a private joint stock company or a limited liability company that undergoes a conversion process to become a public joint stock company.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Introducing a brief on the history of IPOs in the UAE, there have only been a few IPOs in the past few years, only two of which have been executed in 2017 after the issuance of the new UAE Federal Law No. 2 of 2015 concerning Commercial Companies (\"Companies Law\"). We envisage that, in 2018, the market appetite will uphold the trend of one to two IPOs a year.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">It is also worth noting in this regard that the companies that have undergone IPOs in the period between 2014 until 2017 operated in fundamental yet diversified industries such as the real estate, investment, leisure and entertainment, and oil and gas sectors.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Generally speaking, companies that choose to go public in the UAE and offer their shares in an IPO usually seek to raise their capital in global markets. This is supported and facilitated by the local regulators and the regulatory schemes set by the governmental authorities.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">It should be noted that, for the purposes of this chapter, any reference to the UAE (which includes the Emirates of Abu Dhabi, Dubai and the five other emirates making up the UAE) excludes the geographical areas of the Dubai International Financial Centre (\"DIFC\") and the Abu Dhabi General Market (\"ADGM\"). The civil and commercial laws of the UAE (including the UAE’s securities market laws and regulations discussed in this chapter) are not applicable to the DIFC or ADGM and vice versa.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In the UAE, there are three financial exchange markets, two of which are onshore, being the Abu Dhabi Securities Exchange (\"ADX\") and Dubai Financial Market (\"DFM\"), while the third financial market is located within the jurisdiction of the DIFC, being NASDAQ Dubai. ADX and DFM are subject to the supervisory authority of the UAE Securities and Commodities Authority (\"SCA\"), while the Dubai Financial Supervisory Authority regulates NASDAQ Dubai in its capacity as the securities supervisory authority within the DIFC. As at the time of writing, there is no financial market that is located in the ADGM.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><span lang=\"EN\">This chapter excludes any regulations applicable to NASDAQ Dubai and any of the below regulations are applicable only to ADX and DFM where the text allows for the same.</span></p>\r\n<p dir=\"LTR\" align=\"LEFT\">ADX and DFM are governed and regulated by SCA, which has the authority to impose laws, regulations and standards with which both ADX and DFM must comply. ADX and DFM work proactively with SCA to protect investors and provide optimum trading platforms for securities trading.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Both ADX and DFM operate as a securities exchange market for trading securities including shares issued by public joint stock companies.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>The IPO process: steps, timing and parties and market practice</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Despite the fact that an IPO is a process carried out in a very similar manner across the globe, the mechanics of such procedure differ from one country to another in terms of the applicable laws and regulations, required documentation, governmental approvals, and timeline of its procedures.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The IPO process in the UAE slightly varies according to the business and structure of the company undergoing the IPO process, i.e. whether the company is a newly established public joint stock company or a company undergoing a conversion process to become a public joint stock company, in which emirate the company has its place of business and on which market the company will be listed. Accordingly, we have set out below two different procedures and series of steps for each company structure as detailed hereunder.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Newly established public joint stock company</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><em>First stage: initial approvals</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Generally, greenfield (i.e. newly established) public joint stock companies require additional approvals from SCA to go through the route of the IPO. Some of these requirements include: (i) a special approval from the board of directors of SCA for incorporating the greenfield company; (ii) there is sufficient working capital for the twelve (12) months post the incorporation; and (iii) the offered shares are limited to qualified institutional investors and high-net-worth individuals for amounts that are no less than AED 5 million.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The founders committee of the new company (to be established) must refer to the Department of Economic Development (\"DED\") to obtain initial approval to establish the company as a public joint stock company in accordance with the provisions of Article (113) of the Companies Law.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">After obtaining the approval of the DED, the founders committee must apply for the preliminary approval of SCA for the establishment of the public joint stock company, accompanied by all the necessary documents; namely, the memorandum of association (\"MoA\"), articles of association (\"AoA\"), an economic feasibility study for the venture, the SCA application form requesting incorporation of a public joint stock company, a draft prospectus, a subscription application form, and evidence of payment in respect of subscription.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">If the company has shares issued in-kind, the value of the in-kind shares will be assessed by one or more financial advisors chosen by SCA from those accredited by it, or those with technical and financial expertise in the subject of evaluation who are approved by SCA. SCA then considers the application for incorporation and notifies the founders committee of its observations within ten (10) working days from the date of submission of the application in full.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The founders committee completes any deficiencies or makes the amendments deemed necessary by SCA to complete the application for incorporation within fifteen (15) working days from the date of notification. Otherwise, SCA may consider this a waiver of the application for incorporation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">SCA sends a copy of the documents to the DED after they have been completed. (The period of SCA’s review is ten (10) working days from the date of completing the application.)</p>\r\n<p dir=\"LTR\" align=\"LEFT\">A meeting is then held between SCA and the DED to study the application for incorporation and its documents. The meeting must be held within ten (10) working days from the date of the submission of documents by SCA to the DED.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In case there are any comments made by the DED, SCA informs the founders committee. The amendments are be made within ten (10) working days from the date of informing the founders committee.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">SCA ensures that the application and all documents and observations are completed and that the amended versions are sent to the DED. No particulars may be amended in the application after submitting it to the DED during any stage of incorporation either in respect of the capital of the company or its objectives or the names of its founders or any other data in the application for incorporation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">On approval of the incorporation application, the DED then issues a decision to license the incorporation of the company, which is announced in the official gazette at the expense of the founders.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Second stage: pre-subscription period</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The founders committee attest the MoA and AoA before a notary public.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Third stage: public subscription/public offering</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The founders committee must then commence the subscription process, as per the template provided by SCA, for the shares within fifteen (15) days from the date of issuance of the above-mentioned decision. The founders shall subscribe for not less than thirty percent (30%) and not more than seventy percent (70%) of the issued capital of the company, prior to the invitation to public subscription and offering for the remaining percentage of the share capital. In this regard, the founders may not subscribe to the shares offered for public subscription.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">N.B.: Prior to such step, the founders committee must provide SCA and the DED with a bank certificate evidencing payment of the value of their shares in accordance with the above-prescribed percentages. Additionally, they must submit an undertaking, as per the template provided by SCA, to deposit the proceeds generated from the subscription of the total shares to the account of the company under incorporation as well as refunding the surplus funds to subscribers within fifteen (15) days from the date of the subscription closure, if any.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Once SCA’s approval of the prospectus is obtained, the prospectus is then published in two local Arabic daily newspapers at least five (5) days prior to commencement of the subscription. This is the invitation to the public offering.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The subscription must be kept open for no less than ten (10) days and no more than thirty (30) days, open to extension by an additional period of ten (10) days subject to SCA and the DED’s approvals.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">A company issuing its shares in accordance with the share book-building mechanism shall enter into a contract with a financial advisor in order to carry out the IPO and for them to supervise the same. Such financial advisor shall have a number of roles, including presenting the company’s business to investors and ultimately setting the price of shares in the final prospectus after analysing the data from the book-building.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Companies issuing shares in an IPO process, and wishing to use the book-building process, must comply with the following:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">An application will be submitted to SCA using the form prepared for such purpose in order to obtain approval on book-building.</li>\r\n 	<li dir=\"LTR\">The company shall neither announce nor disclose, by any means whatsoever, its intention to issue or sell shares through the book-building process before obtaining SCA’s approval.</li>\r\n 	<li dir=\"LTR\">Not less than twenty percent (20%) of the subscription shares shall be offered to retail investors, and not less than sixty percent (60%) shall be offered to qualified investors, excluding newly established companies, in which case the subscription is restricted to qualified investors only.</li>\r\n 	<li dir=\"LTR\">Allocate to qualified investors, based upon the subscription applications submitted by them, any shares not subscribed by retail investors.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">The price set for retail investors may be discounted compared to the one set for qualified investors in accordance with disclosures made in the final prospectus.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Retail investors shall pay the full value of their subscribed shares upon subscription. Qualified investors may pay the value of their subscribed shares after allocation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The allotment of shares and refund of the surplus funds must be made within five (5) working days from the date of the subscription. In the event that the subscription applications exceed the number of shares offered, the shares shall be distributed to subscribers proportionally to their subscribed amounts or as determined in the prospectus and approved by SCA, and the distribution shall be made to the nearest whole share.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">After the allocation has been made, the company must send the shareholders register to the UAE financial market (i.e. ADX or DFM) on which the shares will be listed.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The entities receiving the subscription keep the payments made by subscribers; in this regard any returns gained in relation thereto are for the account of the company under incorporation. The receiving entities will not deliver such amounts to the board of directors until the incorporation certificate has been issued and the company is registered before the commercial registrar at the DED.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><em><img class=\"size-large wp-image-7998 alignleft\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/07/shutterstock_589011317-1024x446.jpg\" alt=\"\" width=\"640\" height=\"279\" />Fourth stage: incorporation announcement</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The company must announce an invitation to the subscribers to attend the constitutive general assembly meeting (after obtaining approval of SCA) to be held within fifteen (15) days from the date of the subscription closure. The agenda of the first constitutive general assembly must include certain matters prescribed by the SCA.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">If a quorum has not been met at the first meeting, the meeting must be held within five (5) to fifteen (15) days from the date of the first meeting, and the second meeting will be deemed to satisfy the legal quorum regardless of the number of the attendees.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Within ten (10) days from the date of the constitutive general assembly, the founders will submit an application to SCA, for issue of the incorporation certificate, and will enclose the documents stipulated under Article (133) of the Companies Law.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Afterwards, SCA issues the incorporation certificate within five (5) working days.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Fifth stage: registration before the competent authorities and SCA</em></p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">The board of directors of the newly incorporated company must complete the registration procedures before DED in anticipation of its listing in the financial market within ten (10) days from the date of issuance of the incorporation certificate.</li>\r\n 	<li dir=\"LTR\">The DED must then register the company before the commercial registrar and issue the company’s trade licence within five (5) working days.</li>\r\n 	<li dir=\"LTR\">Afterwards, the chairman of the board of directors of the newly incorporated company must, within five (5) working days from the date of issuance of the company’s trade licence, provide the AoA, MoA and company licence to the company registrar to register the company in the companies register.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Sixth stage: listing on UAE financial markets</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The board of directors of the newly incorporated company must, within fifteen (15) working days from the date of the company’s registration before the commercial registrar, list its shares on any of the UAE financial markets (i.e. ADX or DFM) and revert to such financial market with a listing request in accordance with the listing regulations adopted by SCA and the financial market on which the shares will be listed.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Newly converted public joint stock company</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Existing companies wishing to convert into public joint stock companies follow the same rules and steps applicable to newly established public joint stock companies except in relation to the following:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">Companies wishing to convert into a public joint stock company are required to fulfil, amongst others, the following requirements:\r\n<ul dir=\"ltr\">\r\n 	<li dir=\"LTR\">the value of the issued shares of the company wishing to convert has been paid in full;</li>\r\n 	<li dir=\"LTR\">the completion of at least two fiscal years prior to the application;</li>\r\n 	<li dir=\"LTR\">the company has realised, within the two financial years preceding the approval on the conversion application, net operational profits that are distributable to shareholders of no less than ten percent (10%) of the company’s capital as an average; and</li>\r\n 	<li dir=\"LTR\">a special resolution (depending on the legal form of the company and its constitutional documents, this should be passed by no less than three quarters of either: (i) the share capital of the company; or (ii) the shares being represented in a general assembly meeting) issued by the shareholders of the company approving its conversion into a public joint stock company.</li>\r\n</ul>\r\n</li>\r\n 	<li dir=\"LTR\">The founders may sell by way of IPO up to thirty percent (30%) of its share capital. In this regard, the founders may not subscribe to the shares offered for public subscription.</li>\r\n 	<li dir=\"LTR\">The founders committee (to be established by way of a shareholders’ resolution) of the existing company that wishes to convert to a public joint stock company must draft a letter to SCA requesting a listing window reservation and confirming eligibility.</li>\r\n 	<li dir=\"LTR\">Afterwards, the founders committee applies to SCA for a public joint stock conversion accompanied by its shareholders’ resolution approving such conversion.</li>\r\n 	<li dir=\"LTR\">Simultaneously, the said company appoints, approves and forms the said founders committee.</li>\r\n 	<li dir=\"LTR\">Subsequently, the founders committee files with SCA the first draft of the local prospectus as well as the shareholders’ resolution of the existing company approving the conversion, a final draft of the IPO MoA and AoA, a business plan review, and a final real estate valuation report.</li>\r\n 	<li dir=\"LTR\">SCA will examine the conversion application and filed documents and produce a decision on the request within a period of ten (10) working days.</li>\r\n 	<li dir=\"LTR\">In case of approval of the conversion by SCA, the founders committee must announce the conversion and notify its shareholders and creditors (if any) of such conversion via written notice within a period of five (5) working days from the date of SCA’s approval.</li>\r\n 	<li dir=\"LTR\">Shareholders and/or creditors of the company are given a period of fifteen (15) working days to object to the conversion.</li>\r\n 	<li dir=\"LTR\">Afterwards, the company files with SCA a copy of the resolution and confirmation that the opposition period has expired. SCA forms a committee to evaluate the company assets. The process of this evaluation process is thirty (30) working days.</li>\r\n 	<li dir=\"LTR\">A meeting between SCA and the DED is then held to examine the conversion application and its documents. The time for such procedure is five (5) working days.</li>\r\n 	<li dir=\"LTR\">In case of final approval of the conversion application, SCA issues a licence to the company and such licensing decision is then published in the official gazette at the expense of the company founders.</li>\r\n 	<li dir=\"LTR\">The company then proceeds with the IPO and listing in the same manner as a newly established public joint stock company.</li>\r\n</ul>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Regulatory architecture: overview of the regulators and key regulations</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The key regulators in the UAE in respect of the IPO process are the Securities and Commodities Authority (SCA) and the Department of Economic Development (DED). Additionally, and depending on the nature of the company’s business, the company may be required to obtain the approval of other relevant governmental authorities or regulators such as the Central Bank or the Insurance Authority in the UAE.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Other than the key regulators mentioned above and as part of the IPO process, the company is required to liaise with ADX or DFM for the listing of its shares and their offering to the public.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In addition to the Companies Law, one of the important regulations in respect of an IPO are the Companies Law, and the Chairman of SCA’s Resolution No. (11/R.M.) of 2016 governing public offering and issuance of shares of public joint stock companies.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Public company responsibilities</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Public joint stock companies are subject to a more refined governing structure in comparison to other legal forms of companies. The main differences manifest in the ‘corporate governance’ and the ‘disclosure and transparency’ regulations applicable to public joint stock companies.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Disclosure and transparency regulations</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Post the IPO, the company and its shareholders have additional disclosure and transparency obligations, which include restrictions on dealing with the securities of the company, notification obligations in relation to material developments affecting the company, restrictions on publishing certain data relating to the company and to provide SCA with copies of certain documents including financial reports, and details of general assemblies and resolutions.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Corporate governance regulations</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Public joint stock companies are obliged to follow separate regulations for corporate governance in addition to those specified in the Companies Law. Such set of corporate governance regulations can be found in SCA’s Resolution No. (7/R.M.) of 2016 concerning the standards of institutional discipline and governance of public joint stock companies (\"CGR\"). These include, amongst other obligations (i) that the company is obliged to obtain approval from its shareholders and maintain records of transactions that take place with related parties, (ii) all shares issued in the company must be in the same class with equal rights attached to them, (iii) the AoA and internal by-laws of the company should include controls to protect shareholders’ rights, and (iv) the company must have internal control systems to ensure compliance with corporate governance rules.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The company is also obliged to issue a ‘Corporate Governance Report’, which has to provide details of all remuneration and compensation paid to the board; such report must be available to the shareholders prior to the annual general meeting.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Potential risks, liabilities and pitfalls</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Given that the IPO is a simple and straightforward process, there should be no potential legal risks, liabilities or pitfalls with regards to undertaking the IPO process should the above-mentioned procedures be thoroughly followed and all governmental approvals obtained. This is notwithstanding any risks, liabilities and pitfalls related to the business of the company itself or any market risks occurring during the IPO process. However, any negligence on the part of the company or its advisors may expose the company and its founders to risk. The IPO is a lengthy and detailed process that needs to be dealt with by advisors who are experienced in the field of IPOs, in order for them to handle the requirements and ensure compliance with all regulations in an efficient manner and minimise any risk to the company and its founders.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Acknowledgment</em></p>\r\n<em>The authors would like to thank Sarah Tomy and Anna Robinson for their invaluable assistance in the preparation of this chapter.</em>'),
	(263137,25494,'MetaValueOld','<p dir=\"LTR\" align=\"LEFT\"><strong><img class=\"alignleft size-full wp-image-7996\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/07/June-July-2018.jpg\" alt=\"\" width=\"1249\" height=\"287\" />Introduction</strong></p>\r\n&nbsp;<p dir=\"LTR\" align=\"LEFT\">An initial public offering (\"IPO\") is a process by which a company offers its shares, for the first time, to the public by virtue of drafting and publishing a prospectus on the company and carrying out a public subscription of its shares, after submitting required documentation to the relevant governmental authorities and obtaining their approvals in relation thereto.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Under the laws and regulations of the United Arab Emirates (\"UAE\"), in order for a company to offer its shares to the public, the said company must be or take up the legal form of a public joint stock company. Accordingly, a company wishing to execute an IPO will be either a newly incorporated public joint stock company, or a company assuming the legal form of a private joint stock company or a limited liability company that undergoes a conversion process to become a public joint stock company.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Introducing a brief on the history of IPOs in the UAE, there have only been a few IPOs in the past few years, only two of which have been executed in 2017 after the issuance of the new UAE Federal Law No. 2 of 2015 concerning Commercial Companies (\"Companies Law\"). We envisage that, in 2018, the market appetite will uphold the trend of one to two IPOs a year.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">It is also worth noting in this regard that the companies that have undergone IPOs in the period between 2014 until 2017 operated in fundamental yet diversified industries such as the real estate, investment, leisure and entertainment, and oil and gas sectors.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Generally speaking, companies that choose to go public in the UAE and offer their shares in an IPO usually seek to raise their capital in global markets. This is supported and facilitated by the local regulators and the regulatory schemes set by the governmental authorities.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">It should be noted that, for the purposes of this chapter, any reference to the UAE (which includes the Emirates of Abu Dhabi, Dubai and the five other emirates making up the UAE) excludes the geographical areas of the Dubai International Financial Centre (\"DIFC\") and the Abu Dhabi General Market (\"ADGM\"). The civil and commercial laws of the UAE (including the UAE’s securities market laws and regulations discussed in this chapter) are not applicable to the DIFC or ADGM and vice versa.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In the UAE, there are three financial exchange markets, two of which are onshore, being the Abu Dhabi Securities Exchange (\"ADX\") and Dubai Financial Market (\"DFM\"), while the third financial market is located within the jurisdiction of the DIFC, being NASDAQ Dubai. ADX and DFM are subject to the supervisory authority of the UAE Securities and Commodities Authority (\"SCA\"), while the Dubai Financial Supervisory Authority regulates NASDAQ Dubai in its capacity as the securities supervisory authority within the DIFC. As at the time of writing, there is no financial market that is located in the ADGM.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><span lang=\"EN\">This chapter excludes any regulations applicable to NASDAQ Dubai and any of the below regulations are applicable only to ADX and DFM where the text allows for the same.</span></p>\r\n<p dir=\"LTR\" align=\"LEFT\">ADX and DFM are governed and regulated by SCA, which has the authority to impose laws, regulations and standards with which both ADX and DFM must comply. ADX and DFM work proactively with SCA to protect investors and provide optimum trading platforms for securities trading.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Both ADX and DFM operate as a securities exchange market for trading securities including shares issued by public joint stock companies.</p>\r\n&nbsp;<p dir=\"LTR\" align=\"LEFT\"><strong>The IPO process: steps, timing and parties and market practice</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Despite the fact that an IPO is a process carried out in a very similar manner across the globe, the mechanics of such procedure differ from one country to another in terms of the applicable laws and regulations, required documentation, governmental approvals, and timeline of its procedures.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The IPO process in the UAE slightly varies according to the business and structure of the company undergoing the IPO process, i.e. whether the company is a newly established public joint stock company or a company undergoing a conversion process to become a public joint stock company, in which emirate the company has its place of business and on which market the company will be listed. Accordingly, we have set out below two different procedures and series of steps for each company structure as detailed hereunder.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Newly established public joint stock company</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><em>First stage: initial approvals</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Generally, greenfield (i.e. newly established) public joint stock companies require additional approvals from SCA to go through the route of the IPO. Some of these requirements include: (i) a special approval from the board of directors of SCA for incorporating the greenfield company; (ii) there is sufficient working capital for the twelve (12) months post the incorporation; and (iii) the offered shares are limited to qualified institutional investors and high-net-worth individuals for amounts that are no less than AED 5 million.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The founders committee of the new company (to be established) must refer to the Department of Economic Development (\"DED\") to obtain initial approval to establish the company as a public joint stock company in accordance with the provisions of Article (113) of the Companies Law.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">After obtaining the approval of the DED, the founders committee must apply for the preliminary approval of SCA for the establishment of the public joint stock company, accompanied by all the necessary documents; namely, the memorandum of association (\"MoA\"), articles of association (\"AoA\"), an economic feasibility study for the venture, the SCA application form requesting incorporation of a public joint stock company, a draft prospectus, a subscription application form, and evidence of payment in respect of subscription.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">If the company has shares issued in-kind, the value of the in-kind shares will be assessed by one or more financial advisors chosen by SCA from those accredited by it, or those with technical and financial expertise in the subject of evaluation who are approved by SCA. SCA then considers the application for incorporation and notifies the founders committee of its observations within ten (10) working days from the date of submission of the application in full.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The founders committee completes any deficiencies or makes the amendments deemed necessary by SCA to complete the application for incorporation within fifteen (15) working days from the date of notification. Otherwise, SCA may consider this a waiver of the application for incorporation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">SCA sends a copy of the documents to the DED after they have been completed. (The period of SCA’s review is ten (10) working days from the date of completing the application.)</p>\r\n<p dir=\"LTR\" align=\"LEFT\">A meeting is then held between SCA and the DED to study the application for incorporation and its documents. The meeting must be held within ten (10) working days from the date of the submission of documents by SCA to the DED.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In case there are any comments made by the DED, SCA informs the founders committee. The amendments are be made within ten (10) working days from the date of informing the founders committee.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">SCA ensures that the application and all documents and observations are completed and that the amended versions are sent to the DED. No particulars may be amended in the application after submitting it to the DED during any stage of incorporation either in respect of the capital of the company or its objectives or the names of its founders or any other data in the application for incorporation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">On approval of the incorporation application, the DED then issues a decision to license the incorporation of the company, which is announced in the official gazette at the expense of the founders.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Second stage: pre-subscription period</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The founders committee attest the MoA and AoA before a notary public.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Third stage: public subscription/public offering</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The founders committee must then commence the subscription process, as per the template provided by SCA, for the shares within fifteen (15) days from the date of issuance of the above-mentioned decision. The founders shall subscribe for not less than thirty percent (30%) and not more than seventy percent (70%) of the issued capital of the company, prior to the invitation to public subscription and offering for the remaining percentage of the share capital. In this regard, the founders may not subscribe to the shares offered for public subscription.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">N.B.: Prior to such step, the founders committee must provide SCA and the DED with a bank certificate evidencing payment of the value of their shares in accordance with the above-prescribed percentages. Additionally, they must submit an undertaking, as per the template provided by SCA, to deposit the proceeds generated from the subscription of the total shares to the account of the company under incorporation as well as refunding the surplus funds to subscribers within fifteen (15) days from the date of the subscription closure, if any.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Once SCA’s approval of the prospectus is obtained, the prospectus is then published in two local Arabic daily newspapers at least five (5) days prior to commencement of the subscription. This is the invitation to the public offering.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The subscription must be kept open for no less than ten (10) days and no more than thirty (30) days, open to extension by an additional period of ten (10) days subject to SCA and the DED’s approvals.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">A company issuing its shares in accordance with the share book-building mechanism shall enter into a contract with a financial advisor in order to carry out the IPO and for them to supervise the same. Such financial advisor shall have a number of roles, including presenting the company’s business to investors and ultimately setting the price of shares in the final prospectus after analysing the data from the book-building.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Companies issuing shares in an IPO process, and wishing to use the book-building process, must comply with the following:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">An application will be submitted to SCA using the form prepared for such purpose in order to obtain approval on book-building.</li>\r\n 	<li dir=\"LTR\">The company shall neither announce nor disclose, by any means whatsoever, its intention to issue or sell shares through the book-building process before obtaining SCA’s approval.</li>\r\n 	<li dir=\"LTR\">Not less than twenty percent (20%) of the subscription shares shall be offered to retail investors, and not less than sixty percent (60%) shall be offered to qualified investors, excluding newly established companies, in which case the subscription is restricted to qualified investors only.</li>\r\n 	<li dir=\"LTR\">Allocate to qualified investors, based upon the subscription applications submitted by them, any shares not subscribed by retail investors.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\">The price set for retail investors may be discounted compared to the one set for qualified investors in accordance with disclosures made in the final prospectus.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Retail investors shall pay the full value of their subscribed shares upon subscription. Qualified investors may pay the value of their subscribed shares after allocation.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The allotment of shares and refund of the surplus funds must be made within five (5) working days from the date of the subscription. In the event that the subscription applications exceed the number of shares offered, the shares shall be distributed to subscribers proportionally to their subscribed amounts or as determined in the prospectus and approved by SCA, and the distribution shall be made to the nearest whole share.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">After the allocation has been made, the company must send the shareholders register to the UAE financial market (i.e. ADX or DFM) on which the shares will be listed.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The entities receiving the subscription keep the payments made by subscribers; in this regard any returns gained in relation thereto are for the account of the company under incorporation. The receiving entities will not deliver such amounts to the board of directors until the incorporation certificate has been issued and the company is registered before the commercial registrar at the DED.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Fourth stage: incorporation announcement</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The company must announce an invitation to the subscribers to attend the constitutive general assembly meeting (after obtaining approval of SCA) to be held within fifteen (15) days from the date of the subscription closure. The agenda of the first constitutive general assembly must include certain matters prescribed by the SCA.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">If a quorum has not been met at the first meeting, the meeting must be held within five (5) to fifteen (15) days from the date of the first meeting, and the second meeting will be deemed to satisfy the legal quorum regardless of the number of the attendees.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Within ten (10) days from the date of the constitutive general assembly, the founders will submit an application to SCA, for issue of the incorporation certificate, and will enclose the documents stipulated under Article (133) of the Companies Law.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Afterwards, SCA issues the incorporation certificate within five (5) working days.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Fifth stage: registration before the competent authorities and SCA</em></p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">The board of directors of the newly incorporated company must complete the registration procedures before DED in anticipation of its listing in the financial market within ten (10) days from the date of issuance of the incorporation certificate.</li>\r\n 	<li dir=\"LTR\">The DED must then register the company before the commercial registrar and issue the company’s trade licence within five (5) working days.</li>\r\n 	<li dir=\"LTR\">Afterwards, the chairman of the board of directors of the newly incorporated company must, within five (5) working days from the date of issuance of the company’s trade licence, provide the AoA, MoA and company licence to the company registrar to register the company in the companies register.</li>\r\n</ul>\r\n<p dir=\"LTR\" align=\"LEFT\"><em>Sixth stage: listing on UAE financial markets</em></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The board of directors of the newly incorporated company must, within fifteen (15) working days from the date of the company’s registration before the commercial registrar, list its shares on any of the UAE financial markets (i.e. ADX or DFM) and revert to such financial market with a listing request in accordance with the listing regulations adopted by SCA and the financial market on which the shares will be listed.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Newly converted public joint stock company</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Existing companies wishing to convert into public joint stock companies follow the same rules and steps applicable to newly established public joint stock companies except in relation to the following:</p>\r\n\r\n<ul>\r\n 	<li dir=\"LTR\">Companies wishing to convert into a public joint stock company are required to fulfil, amongst others, the following requirements:\r\n<ul dir=\"ltr\">\r\n 	<li dir=\"LTR\">the value of the issued shares of the company wishing to convert has been paid in full;</li>\r\n 	<li dir=\"LTR\">the completion of at least two fiscal years prior to the application;</li>\r\n 	<li dir=\"LTR\">the company has realised, within the two financial years preceding the approval on the conversion application, net operational profits that are distributable to shareholders of no less than ten percent (10%) of the company’s capital as an average; and</li>\r\n 	<li dir=\"LTR\">a special resolution (depending on the legal form of the company and its constitutional documents, this should be passed by no less than three quarters of either: (i) the share capital of the company; or (ii) the shares being represented in a general assembly meeting) issued by the shareholders of the company approving its conversion into a public joint stock company.</li>\r\n</ul>\r\n</li>\r\n 	<li dir=\"LTR\">The founders may sell by way of IPO up to thirty percent (30%) of its share capital. In this regard, the founders may not subscribe to the shares offered for public subscription.</li>\r\n 	<li dir=\"LTR\">The founders committee (to be established by way of a shareholders’ resolution) of the existing company that wishes to convert to a public joint stock company must draft a letter to SCA requesting a listing window reservation and confirming eligibility.</li>\r\n 	<li dir=\"LTR\">Afterwards, the founders committee applies to SCA for a public joint stock conversion accompanied by its shareholders’ resolution approving such conversion.</li>\r\n 	<li dir=\"LTR\">Simultaneously, the said company appoints, approves and forms the said founders committee.</li>\r\n 	<li dir=\"LTR\">Subsequently, the founders committee files with SCA the first draft of the local prospectus as well as the shareholders’ resolution of the existing company approving the conversion, a final draft of the IPO MoA and AoA, a business plan review, and a final real estate valuation report.</li>\r\n 	<li dir=\"LTR\">SCA will examine the conversion application and filed documents and produce a decision on the request within a period of ten (10) working days.</li>\r\n 	<li dir=\"LTR\">In case of approval of the conversion by SCA, the founders committee must announce the conversion and notify its shareholders and creditors (if any) of such conversion via written notice within a period of five (5) working days from the date of SCA’s approval.</li>\r\n 	<li dir=\"LTR\">Shareholders and/or creditors of the company are given a period of fifteen (15) working days to object to the conversion.</li>\r\n 	<li dir=\"LTR\">Afterwards, the company files with SCA a copy of the resolution and confirmation that the opposition period has expired. SCA forms a committee to evaluate the company assets. The process of this evaluation process is thirty (30) working days.</li>\r\n 	<li dir=\"LTR\">A meeting between SCA and the DED is then held to examine the conversion application and its documents. The time for such procedure is five (5) working days.</li>\r\n 	<li dir=\"LTR\">In case of final approval of the conversion application, SCA issues a licence to the company and such licensing decision is then published in the official gazette at the expense of the company founders.</li>\r\n 	<li dir=\"LTR\">The company then proceeds with the IPO and listing in the same manner as a newly established public joint stock company.</li>\r\n</ul>\r\n&nbsp;<p dir=\"LTR\" align=\"LEFT\"><strong>Regulatory architecture: overview of the regulators and key regulations</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">The key regulators in the UAE in respect of the IPO process are the Securities and Commodities Authority (SCA) and the Department of Economic Development (DED). Additionally, and depending on the nature of the company’s business, the company may be required to obtain the approval of other relevant governmental authorities or regulators such as the Central Bank or the Insurance Authority in the UAE.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Other than the key regulators mentioned above and as part of the IPO process, the company is required to liaise with ADX or DFM for the listing of its shares and their offering to the public.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">In addition to the Companies Law, one of the important regulations in respect of an IPO are the Companies Law, and the Chairman of SCA’s Resolution No. (11/R.M.) of 2016 governing public offering and issuance of shares of public joint stock companies.</p>\r\n&nbsp;<p dir=\"LTR\" align=\"LEFT\"><strong>Public company responsibilities</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Public joint stock companies are subject to a more refined governing structure in comparison to other legal forms of companies. The main differences manifest in the ‘corporate governance’ and the ‘disclosure and transparency’ regulations applicable to public joint stock companies.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Disclosure and transparency regulations</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Post the IPO, the company and its shareholders have additional disclosure and transparency obligations, which include restrictions on dealing with the securities of the company, notification obligations in relation to material developments affecting the company, restrictions on publishing certain data relating to the company and to provide SCA with copies of certain documents including financial reports, and details of general assemblies and resolutions.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Corporate governance regulations</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Public joint stock companies are obliged to follow separate regulations for corporate governance in addition to those specified in the Companies Law. Such set of corporate governance regulations can be found in SCA’s Resolution No. (7/R.M.) of 2016 concerning the standards of institutional discipline and governance of public joint stock companies (\"CGR\"). These include, amongst other obligations (i) that the company is obliged to obtain approval from its shareholders and maintain records of transactions that take place with related parties, (ii) all shares issued in the company must be in the same class with equal rights attached to them, (iii) the AoA and internal by-laws of the company should include controls to protect shareholders’ rights, and (iv) the company must have internal control systems to ensure compliance with corporate governance rules.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The company is also obliged to issue a ‘Corporate Governance Report’, which has to provide details of all remuneration and compensation paid to the board; such report must be available to the shareholders prior to the annual general meeting.</p>\r\n&nbsp;<p dir=\"LTR\" align=\"LEFT\"><strong>Potential risks, liabilities and pitfalls</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Given that the IPO is a simple and straightforward process, there should be no potential legal risks, liabilities or pitfalls with regards to undertaking the IPO process should the above-mentioned procedures be thoroughly followed and all governmental approvals obtained. This is notwithstanding any risks, liabilities and pitfalls related to the business of the company itself or any market risks occurring during the IPO process. However, any negligence on the part of the company or its advisors may expose the company and its founders to risk. The IPO is a lengthy and detailed process that needs to be dealt with by advisors who are experienced in the field of IPOs, in order for them to handle the requirements and ensure compliance with all regulations in an efficient manner and minimise any risk to the company and its founders.</p>\r\n<p dir=\"LTR\" align=\"LEFT\"><em><img class=\"alignleft size-full wp-image-7998\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/07/shutterstock_589011317.jpg\" alt=\"\" width=\"5472\" height=\"2384\" />Acknowledgment</em></p>\r\n<em>The authors would like to thank Sarah Tomy and Anna Robinson for their invaluable assistance in the preparation of this chapter.</em>'),
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	(264904,25639,'EditorLinkPost','http://localhost:8888/tamimi/wp-admin/post.php?post=7940&amp;action=edit'),
	(264905,25639,'ReportText','<img class=\"alignleft size-full wp-image-8002\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/07/17-1.png\" alt=\"\" width=\"3567\" height=\"715\" />\r\n\r\n&nbsp;\r\n\r\nThe UK legislature has recently introduced domestic legislation aimed at money launderers, potentially resulting in unintended consequences for foreign nationals who have legitimate assets in the UK. These orders demand the intended target provide information about the origin of their wealth, and refusal to disclose that information may render the target subject to criminal prosecution in the UK. However, if the foreign national does comply with the Unexplained Wealth Order (UWO), then that individual may be subject to criminal prosecution in another State… a real Catch 22.\r\n<p dir=\"LTR\" align=\"LEFT\">Controversially, there is no need for a foreign national to be accused of money laundering, or any criminality whatsoever, before they could be made subject to a UWO, which would lead to the freezing of their assets, or, worse, criminal prosecution.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The following article introduces UWOs to our clients and examines how one must be careful in weighing up their rights and obligations in respect of the request of a foreign State’s investigative authorities as it may impact their rights in the UAE, and around the GCC.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>What is a UWO?</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">On 31st January 2018, the UK introduced their latest attempt at stemming money laundering in the UK: Unexplained Wealth Orders. UWOs are civil investigative powers that are aimed at tackling those who use the UK as a destination for money laundering, or as a destination for those who wish to spend their ill-gotten gains.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">UWOs have been introduced in the UK at a time when London, and the UK, is facing scrutiny as a perceived hotbed of money laundering and revelry. A main proponent of UWOs has been Transparency International UK’s corruption taskforce, who, amongst others, have repeatedly called for greater investigative action to be taken in the UK against individuals and entities thought to have been complicit in corruption, and have led the drive to bring UWOs into action in UK law.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">UWOs are given legal effect pursuant to the UK Proceeds of Crime Act 2002 Article 362A, as introduced by the Criminal Finances Act 2017, and is defined in the legislation as:</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>‘An unexplained wealth order is an order requiring the respondent [i.e. the target of the order] to provide a statement—</em></p>\r\n\r\n<ul>\r\n 	<li><em>setting out the nature and extent of the respondent’s interest in the property in respect of which the order is made,</em></li>\r\n 	<li><em>explaining how the respondent obtained the property (including, in particular, how any costs incurred in obtaining it were met),</em></li>\r\n 	<li><em>where the property is held by the trustees of a settlement, setting out such details of the settlement as may be specified in the order, and</em></li>\r\n 	<li><em>setting out such other information in connection with the property as may be so specified.’</em></li>\r\n</ul>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The clear advantage that UWOs provide for UK investigative authorities is that it is no longer necessary for the UK authorities to demonstrate that an individual has been subject to a conviction for a criminal offence (either in the UK or abroad) in order to obtain information and take measures against a specific property.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Two months after the introduction of the legislation, in March 2018, it would appear that the first orders are now being made. We have seen the first use of these orders, not on a UK national, but on an Asian politician who owns two properties, worth USD $30 million, in the UK. The specific identity of this individual has not been disclosed as matters are ongoing, and no further details are available publically.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">This means that if an individual owns assets in the UK and they are made subject to a UWO, they will be forced to declare how they obtained this asset, and if they fail to do so they would be subject to criminal prosecution by the UK authorities. This may lead to foreign individuals being stuck between a rock and a hard place, with nowhere to turn and no route of escape.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Why is it Relevant To You?</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">As will be apparent from the first orders made against the Asian politician, whilst UWOs do apply to individuals who are reasonably suspected of being involved in crime, the UWOs will also target politically exposed individuals who have not been subject to criminal conviction, or investigation, either in the UK or internationally.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The definition of a PEP, or Politically Exposed Person, varies from State to State, but for the purposes of the UK legislation, the legislators have defined PEPs as the following:</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">‘(a) an individual who is, or has been, entrusted with prominent public functions by an international body or by a State other than the UK or other [European Economic Area] State;</p>\r\n<p dir=\"LTR\" align=\"LEFT\">(b) a family member of a person within paragraph (a); or</p>\r\n<p dir=\"LTR\" align=\"LEFT\">(c) known to be a close associate of a person within […] paragraph [a].’</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Evidently from this definition, paying particularly close attention to (c) namely ‘a close associate’ of an individual with prominent public functions, there is a very expansive definition of PEP, and this will likely include many unsuspecting individuals. The effect of this definition is that if you are an individual who has prominent public functions, or you are a close associate of another who has been entrusted with public functions, then you may now be targeted by the UK authorities with a UWO. Alarmingly, there is no need for you to have committed a crime, nor to have been suspected of being involved in a crime, for these orders to apply to you.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Specifically, when could a UWO apply?</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">A UK high court judge can give notice of a UWO if the judge is satisfied that it is likely that a foreign PEP (as defined above) is the owner of suspicious wealth in the UK beyond their means, and if all of the following provisions are met:</p>\r\n\r\n<ol>\r\n 	<li dir=\"LTR\">The respondent’s known income is insufficient to obtain the asset; and</li>\r\n 	<li dir=\"LTR\">The value of the asset is greater than £50,000 (approx. AED 260,000).</li>\r\n</ol>\r\n<p dir=\"LTR\" align=\"LEFT\">This legislation does not only target Foreign PEPs, but also where there are reasonable grounds to suspect any individual has been involved in serious crime.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Applications for UWOs may be made without notice. This means that there is no requirement on the UK investigative authority to notify the target of a UWO that they, or their assets, have been made subject of a UWO.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>What assets would this apply to?</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">A UWO can be made against assets whose value is greater than £50,000. There is no need for the PEP to be the sole owner of the property whose value is over £50,000, nor is it of relevance if the property was purchased prior to the introduction of the UK legislation.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>What is the effect?</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Following the making of an order by the High Court, the Court may order an individual’s property to be frozen, which would preclude the subject of the order from dealing with the property. As these freezing orders may be made without notice, this means that an individual’s assets may be frozen prior to their knowledge of any order being made against them.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The UWO will mandate the individual to explain, at a minimum:</p>\r\n\r\n<ol>\r\n 	<li dir=\"LTR\">The nature and extent of their interest in a particular property; and</li>\r\n 	<li dir=\"LTR\">Explain how the property was obtained.</li>\r\n</ol>\r\n<p dir=\"LTR\" align=\"LEFT\">An explanation will be requested by the UK authorities where ‘there are reasonable grounds to suspect that the respondent’s known lawfully obtained income would be insufficient to allow the respondent to obtain the property’.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Failing to Comply?</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Should the target of a UWO fail to comply with an order, or provide inaccurate or misleading information, then they will likely be subject to criminal sanction in the UK and may face a period of imprisonment and a financial penalty.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Within the legislation, it is stated that a UWO could lead to criminal liability for a target if that individual fails, without reasonable excuse, to comply with the requirements imposed by the Court against that individual. There is no definition of what a reasonable excuse would be in the legislation, and is a subjective requirement that would be decided in Court during the course of litigation.</p>\r\n&nbsp;<p dir=\"LTR\" align=\"LEFT\"><strong><img class=\"wp-image-8014 alignright\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/07/Screen-Shot-2018-07-31-at-5.43.01-PM-242x300.png\" alt=\"\" width=\"330\" height=\"409\" /></strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>A View from the East: Stuck between a Rock and a Hard Place?</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">These orders, whilst designed to tackle money laundering on a global scale, and limit the use of the UK jurisdiction for those who seek to gain from their ill-gotten earnings, may cause legal difficulties for individuals based in foreign jurisdictions who are subject to UWOs – such as the UAE and the wider GCC – due to a conflict of laws between this UK legislation and that of other countries. This conflict could lead to an individual’s adherence to UK legislation meaning that the individual would be liable to prosecution in other jurisdictions.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Taking the UAE as a representative example of the Middle East’s approach to confidential or private information, the UAE’s jurisdiction imposes very strict obligations on an individual’s use and disclosure of confidential information. It is a criminal offence, pursuant to the UAE’s Federal Law No. 3 of 1987, as amended by Federal Decree No. 7 of 2016 (UAE Penal Code) to disclose secret information. Secret information is afforded an expansive definition in the UAE Penal Code and it is commonly viewed any information that is confidential, i.e. not in the public domain, and that an individual possesses due to their employment or individual nature.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Furthermore, due to the extraterritorial nature of the UAE Penal Code, should an individual commit a crime that is wholly or partly committed within the UAE, then that individual would be bound by the provisions of the Penal Code, and would be bound by provisions such as the disclosure of secret information. Specifically, should an individual be requested to provide secret information, such as the source of funds from a business entity, to the UK authorities, and that information relates to a UAE business or UAE based individual, then if the material or information is disclosed following a UWO in the UK, then in the UAE the individual may be subject to criminal prosecution for disclosing that exact information.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">There is no exception afforded under UAE domestic legislation that would permit an individual to disclose confidential information to a foreign investigative authority (such as the UK’s Serious Fraud Office, Financial Conduct Authority, or National Security Agency). Should that individual disclose such information to the UK’s, or any other foreign State’s, investigative authority, then that individual may be liable to prosecution in the UAE in the same manner as though the disclosure had been made to a private individual or entity.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Prosecution for disclosing confidential information is a serious offence in the UAE, and one that may carry a mandatory minimum period of imprisonment. Accordingly, the stakes are very high when one is subject to an international request for judicial assistance, in any form, and it is for that reason and in order to assist with international criminal investigations that the UAE has entered into number multilateral and bilateral treaties aimed at assisting mutual judicial assistance requests. As with most international requests from law enforcement agencies, such requests should follow the usual diplomatic channels through the deployment of letters rogatory.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The difficulties for UAE individuals would not stop simply at the threat of criminal sanction, but also according to the UAE’s Labour Law, should an individual disclose the secrets of their employer, then the worker may be dismissed without notice and forfeit their entire severance pay.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Accordingly, the receipt of a UWO in the UK demanding that an individual provide information to the UAE authorities may conflict with the statutory protection relating to confidential information (or other laws) in a foreign jurisdiction, such as the UAE. This would lead to the precarious situation where an individual may face prosecution in the UK if he doesn’t comply with the UWO, but criminal prosecution in the UAE if he does comply.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Conclusion</strong></p>\r\nThe above example and review provides a very high-level overview of the competing laws that the UK’s UWOs may catch. Whilst the UK legislation will no doubt serve as an effective deterrent and useful tool in minimising global money laundering, and limiting the attraction of the UK for criminals, it may have unintended consequences for foreign nationals holding legitimate assets in the UK. Prior to making any response to a request for assistance, it is imperative that the recipient apprise themselves of all legal considerations to ensure that they are not jumping out of the frying pan, but straight into the fire.|<img class=\"alignleft size-full wp-image-8002\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/07/17-1.png\" alt=\"\" width=\"3567\" height=\"715\" />\r\n\r\n&nbsp;\r\n\r\nThe UK legislature has recently introduced domestic legislation aimed at money launderers, potentially resulting in unintended consequences for foreign nationals who have legitimate assets in the UK. These orders demand the intended target provide information about the origin of their wealth, and refusal to disclose that information may render the target subject to criminal prosecution in the UK. However, if the foreign national does comply with the Unexplained Wealth Order (UWO), then that individual may be subject to criminal prosecution in another State… a real Catch 22.\r\n<p dir=\"LTR\" align=\"LEFT\">Controversially, there is no need for a foreign national to be accused of money laundering, or any criminality whatsoever, before they could be made subject to a UWO, which would lead to the freezing of their assets, or, worse, criminal prosecution.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The following article introduces UWOs to our clients and examines how one must be careful in weighing up their rights and obligations in respect of the request of a foreign State’s investigative authorities as it may impact their rights in the UAE, and around the GCC.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>What is a UWO?</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">On 31st January 2018, the UK introduced their latest attempt at stemming money laundering in the UK: Unexplained Wealth Orders. UWOs are civil investigative powers that are aimed at tackling those who use the UK as a destination for money laundering, or as a destination for those who wish to spend their ill-gotten gains.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">UWOs have been introduced in the UK at a time when London, and the UK, is facing scrutiny as a perceived hotbed of money laundering and revelry. A main proponent of UWOs has been Transparency International UK’s corruption taskforce, who, amongst others, have repeatedly called for greater investigative action to be taken in the UK against individuals and entities thought to have been complicit in corruption, and have led the drive to bring UWOs into action in UK law.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">UWOs are given legal effect pursuant to the UK Proceeds of Crime Act 2002 Article 362A, as introduced by the Criminal Finances Act 2017, and is defined in the legislation as:</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><em>‘An unexplained wealth order is an order requiring the respondent [i.e. the target of the order] to provide a statement—</em></p>\r\n\r\n<ul>\r\n 	<li><em>setting out the nature and extent of the respondent’s interest in the property in respect of which the order is made,</em></li>\r\n 	<li><em>explaining how the respondent obtained the property (including, in particular, how any costs incurred in obtaining it were met),</em></li>\r\n 	<li><em>where the property is held by the trustees of a settlement, setting out such details of the settlement as may be specified in the order, and</em></li>\r\n 	<li><em>setting out such other information in connection with the property as may be so specified.’</em></li>\r\n</ul>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">The clear advantage that UWOs provide for UK investigative authorities is that it is no longer necessary for the UK authorities to demonstrate that an individual has been subject to a conviction for a criminal offence (either in the UK or abroad) in order to obtain information and take measures against a specific property.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Two months after the introduction of the legislation, in March 2018, it would appear that the first orders are now being made. We have seen the first use of these orders, not on a UK national, but on an Asian politician who owns two properties, worth USD $30 million, in the UK. The specific identity of this individual has not been disclosed as matters are ongoing, and no further details are available publically.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">This means that if an individual owns assets in the UK and they are made subject to a UWO, they will be forced to declare how they obtained this asset, and if they fail to do so they would be subject to criminal prosecution by the UK authorities. This may lead to foreign individuals being stuck between a rock and a hard place, with nowhere to turn and no route of escape.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Why is it Relevant To You?</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">As will be apparent from the first orders made against the Asian politician, whilst UWOs do apply to individuals who are reasonably suspected of being involved in crime, the UWOs will also target politically exposed individuals who have not been subject to criminal conviction, or investigation, either in the UK or internationally.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The definition of a PEP, or Politically Exposed Person, varies from State to State, but for the purposes of the UK legislation, the legislators have defined PEPs as the following:</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">‘(a) an individual who is, or has been, entrusted with prominent public functions by an international body or by a State other than the UK or other [European Economic Area] State;</p>\r\n<p dir=\"LTR\" align=\"LEFT\">(b) a family member of a person within paragraph (a); or</p>\r\n<p dir=\"LTR\" align=\"LEFT\">(c) known to be a close associate of a person within […] paragraph [a].’</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\">Evidently from this definition, paying particularly close attention to (c) namely ‘a close associate’ of an individual with prominent public functions, there is a very expansive definition of PEP, and this will likely include many unsuspecting individuals. The effect of this definition is that if you are an individual who has prominent public functions, or you are a close associate of another who has been entrusted with public functions, then you may now be targeted by the UK authorities with a UWO. Alarmingly, there is no need for you to have committed a crime, nor to have been suspected of being involved in a crime, for these orders to apply to you.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Specifically, when could a UWO apply?</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">A UK high court judge can give notice of a UWO if the judge is satisfied that it is likely that a foreign PEP (as defined above) is the owner of suspicious wealth in the UK beyond their means, and if all of the following provisions are met:</p>\r\n\r\n<ol>\r\n 	<li dir=\"LTR\">The respondent’s known income is insufficient to obtain the asset; and</li>\r\n 	<li dir=\"LTR\">The value of the asset is greater than £50,000 (approx. AED 260,000).</li>\r\n</ol>\r\n<p dir=\"LTR\" align=\"LEFT\">This legislation does not only target Foreign PEPs, but also where there are reasonable grounds to suspect any individual has been involved in serious crime.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Applications for UWOs may be made without notice. This means that there is no requirement on the UK investigative authority to notify the target of a UWO that they, or their assets, have been made subject of a UWO.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>What assets would this apply to?</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">A UWO can be made against assets whose value is greater than £50,000. There is no need for the PEP to be the sole owner of the property whose value is over £50,000, nor is it of relevance if the property was purchased prior to the introduction of the UK legislation.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>What is the effect?</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Following the making of an order by the High Court, the Court may order an individual’s property to be frozen, which would preclude the subject of the order from dealing with the property. As these freezing orders may be made without notice, this means that an individual’s assets may be frozen prior to their knowledge of any order being made against them.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The UWO will mandate the individual to explain, at a minimum:</p>\r\n\r\n<ol>\r\n 	<li dir=\"LTR\">The nature and extent of their interest in a particular property; and</li>\r\n 	<li dir=\"LTR\">Explain how the property was obtained.</li>\r\n</ol>\r\n<p dir=\"LTR\" align=\"LEFT\">An explanation will be requested by the UK authorities where ‘there are reasonable grounds to suspect that the respondent’s known lawfully obtained income would be insufficient to allow the respondent to obtain the property’.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Failing to Comply?</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">Should the target of a UWO fail to comply with an order, or provide inaccurate or misleading information, then they will likely be subject to criminal sanction in the UK and may face a period of imprisonment and a financial penalty.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Within the legislation, it is stated that a UWO could lead to criminal liability for a target if that individual fails, without reasonable excuse, to comply with the requirements imposed by the Court against that individual. There is no definition of what a reasonable excuse would be in the legislation, and is a subjective requirement that would be decided in Court during the course of litigation.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong><img class=\"wp-image-8014 alignleft\" src=\"http://localhost:8888/tamimi/wp-content/uploads/2018/07/Screen-Shot-2018-07-31-at-5.43.01-PM-242x300.png\" alt=\"\" width=\"330\" height=\"409\" /></strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>A View from the East: Stuck between a Rock and a Hard Place?</strong></p>\r\n<p dir=\"LTR\" align=\"LEFT\">These orders, whilst designed to tackle money laundering on a global scale, and limit the use of the UK jurisdiction for those who seek to gain from their ill-gotten earnings, may cause legal difficulties for individuals based in foreign jurisdictions who are subject to UWOs – such as the UAE and the wider GCC – due to a conflict of laws between this UK legislation and that of other countries. This conflict could lead to an individual’s adherence to UK legislation meaning that the individual would be liable to prosecution in other jurisdictions.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Taking the UAE as a representative example of the Middle East’s approach to confidential or private information, the UAE’s jurisdiction imposes very strict obligations on an individual’s use and disclosure of confidential information. It is a criminal offence, pursuant to the UAE’s Federal Law No. 3 of 1987, as amended by Federal Decree No. 7 of 2016 (UAE Penal Code) to disclose secret information. Secret information is afforded an expansive definition in the UAE Penal Code and it is commonly viewed any information that is confidential, i.e. not in the public domain, and that an individual possesses due to their employment or individual nature.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Furthermore, due to the extraterritorial nature of the UAE Penal Code, should an individual commit a crime that is wholly or partly committed within the UAE, then that individual would be bound by the provisions of the Penal Code, and would be bound by provisions such as the disclosure of secret information. Specifically, should an individual be requested to provide secret information, such as the source of funds from a business entity, to the UK authorities, and that information relates to a UAE business or UAE based individual, then if the material or information is disclosed following a UWO in the UK, then in the UAE the individual may be subject to criminal prosecution for disclosing that exact information.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">There is no exception afforded under UAE domestic legislation that would permit an individual to disclose confidential information to a foreign investigative authority (such as the UK’s Serious Fraud Office, Financial Conduct Authority, or National Security Agency). Should that individual disclose such information to the UK’s, or any other foreign State’s, investigative authority, then that individual may be liable to prosecution in the UAE in the same manner as though the disclosure had been made to a private individual or entity.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Prosecution for disclosing confidential information is a serious offence in the UAE, and one that may carry a mandatory minimum period of imprisonment. Accordingly, the stakes are very high when one is subject to an international request for judicial assistance, in any form, and it is for that reason and in order to assist with international criminal investigations that the UAE has entered into number multilateral and bilateral treaties aimed at assisting mutual judicial assistance requests. As with most international requests from law enforcement agencies, such requests should follow the usual diplomatic channels through the deployment of letters rogatory.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">The difficulties for UAE individuals would not stop simply at the threat of criminal sanction, but also according to the UAE’s Labour Law, should an individual disclose the secrets of their employer, then the worker may be dismissed without notice and forfeit their entire severance pay.</p>\r\n<p dir=\"LTR\" align=\"LEFT\">Accordingly, the receipt of a UWO in the UK demanding that an individual provide information to the UAE authorities may conflict with the statutory protection relating to confidential information (or other laws) in a foreign jurisdiction, such as the UAE. This would lead to the precarious situation where an individual may face prosecution in the UK if he doesn’t comply with the UWO, but criminal prosecution in the UAE if he does comply.</p>\r\n&nbsp;\r\n<p dir=\"LTR\" align=\"LEFT\"><strong>Conclusion</strong></p>\r\nThe above example and review provides a very high-level overview of the competing laws that the UK’s UWOs may catch. Whilst the UK legislation will no doubt serve as an effective deterrent and useful tool in minimising global money laundering, and limiting the attraction of the UK for criminals, it may have unintended consequences for foreign nationals holding legitimate assets in the UK. Prior to making any response to a request for assistance, it is imperative that the recipient apprise themselves of all legal considerations to ensure that they are not jumping out of the frying pan, but straight into the fire.');

