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(89940, 4893, '_yoast_wpseo_metadesc', 'Another judgment by the Dubai Cassation Court, issued on 4 November 2012 continued its trend of deciding that a buyer may legitimately withhold the performance of his due obligation (as to price), if there are serious reasons to lead him to believe that the developer will fail to perform his future obligation.'),
(89941, 4894, 'content', 'April 2014\r\n\r\n<hr />\r\n\r\nOne of the main restrictions is the procedure which must be followed by an employee to collect her dues in case of a dispute with the employer. The procedure, which is mandatory and strictly followed, requires the employee to first contact the Ministry of Labour (or the relevant authority) and then file a labour claim with the court.  The UAE courts, as detailed below, view this procedure and the court’s jurisdiction over labour disputes as a matter of public policy.\r\n\r\nIn cassation appeal 123/2009, the Dubai Court of Cassation heard a challenge to the lower court’s judgment denying the defendant employer’s request to dismiss the case for want of jurisdiction. The defendant argued that the labour contract with the employee contained an arbitration clause which precludes the Dubai Courts from hearing the case. The Defendant argued that Article 203 of the Civil Procedure Law allows parties to a contract to agree to an arbitration clause and the employee agreed to the clause, therefore the court should respect the parties’ wishes and arbitration agreement.\r\n\r\nThe Court in its analysis quoted Article 7 of the Labour Law which states: “any condition contrary to the provisions of this Law, even if was made prior to its commencement, shall be null and void, unless they are more beneficial to the Employee”. The Court reasoned that this article evidences the legislative intent and makes the employee’s rights given under the Labour Law part of public policy. Matters of public policy, the Court explained, are not matters which can be waived or conciliated. Therefore a labour contract may grant an employee more rights than the ones provided by law; however, an employee may not waive his rights under the law as this waiver would be contrary to public policy.\r\n\r\nThe court, for example, has affirmed an employee’s claim of 3 months payment in lieu of notice based on a clause in the employee’s contract which granted the employee more benefits than the Labour Law. (Cassation 65/2008). On the other hand, an employee’s agreement to clauses in a labour contract which lessens his rights as compared to the basic rights in the Labour Law is seen as waiver and is invalid.\r\n\r\nAs regards the arbitration clause, the Court quoted Article 203 (4) of the Civil Procedure Code which states that “It shall not be permissible to arbitrate matters in which conciliation is not permissible” and read it along with Article 7 of the Labour Law to conclude that conciliation is not permissible in labour disputes and therefore arbitration is not permissible either. Therefore, even if the parties agreed to an arbitration clause in their contract, the jurisdiction will remain with the Court since the clause would be against public policy.'),
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(89943, 4894, 'lawUpdateArticleMonth', '4888'),
(89944, 4894, '_lawUpdateArticleMonth', 'field_59da2a396b063'),
(89945, 4894, 'content_description', 'Federal Law 8 of 1980 (“the Labour Law”) provides special protections for employees and sets specific restrictions to labour contracts. '),
(89946, 4894, '_content_description', 'field_59b641c07f473'),
(89947, 4894, 'pageSummary', 'Federal Law 8 of 1980 (“the Labour Law”) provides special protections for employees and sets specific restrictions to labour contracts.'),
(89948, 4894, '_pageSummary', 'field_59e59b307dec8'),
(89949, 4894, 'currentURL', 'http://www.tamimi.com/en/magazine/law-update/section-8/april-7/limitations-on-labour-contracts.html'),
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(89951, 4894, 'lawUpdateArticleNoWriters_0_lawUpdateAuthorName', 'Eman Ahmad'),
(89952, 4894, '_lawUpdateArticleNoWriters_0_lawUpdateAuthorName', 'field_59e59ad5d15dd'),
(89953, 4894, 'lawUpdateArticleNoWriters_0_lawUpdateAuthorEmail', 'e.ahmad@tamimi.com'),
(89954, 4894, '_lawUpdateArticleNoWriters_0_lawUpdateAuthorEmail', 'field_59e59afcd15de'),
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(89956, 4894, '_lawUpdateArticleNoWriters_0_lawUpdateAuthorLocation', 'field_59e59b05d15df'),
(89957, 4894, 'lawUpdateArticleNoWriters_1_lawUpdateAuthorName', 'Hussain Al Matrood'),
(89958, 4894, '_lawUpdateArticleNoWriters_1_lawUpdateAuthorName', 'field_59e59ad5d15dd'),
(89959, 4894, 'lawUpdateArticleNoWriters_1_lawUpdateAuthorEmail', 'h.almatrood@tamimi.com'),
(89960, 4894, '_lawUpdateArticleNoWriters_1_lawUpdateAuthorEmail', 'field_59e59afcd15de'),
(89961, 4894, 'lawUpdateArticleNoWriters_1_lawUpdateAuthorLocation', ''),
(89962, 4894, '_lawUpdateArticleNoWriters_1_lawUpdateAuthorLocation', 'field_59e59b05d15df'),
(89963, 4894, 'lawUpdateArticleNoWriters', '2'),
(89964, 4894, '_lawUpdateArticleNoWriters', 'field_59e59aaed15dc'),
(89965, 4894, '_yoast_wpseo_metadesc', 'Federal Law 8 of 1980 (“the Labour Law”) provides special protections for employees and sets specific restrictions to labour contracts.'),
(89966, 4895, 'content', 'April 2014\r\n\r\n<hr />\r\n\r\nAchieving a strong Arab economic alliance was also a long-term goal of the Arab League. Although the Arab League was established a few years before the United Nations, attempts to overcome trade barriers between the Arab states have made limited progress, perhaps because most of the initiatives established were of a political nature at a time when Arab countries had differing political systems and were aligned to different foreign powers. There was no political desire to implement free trade agreements and the Arab countries were actually diverging socially, politically and economically.\r\n\r\nThe Greater Arab Free Trade Area Agreement (“GAFTA”) was first conceived at the Arab League Summit in 1982, but very little progress was made until it came into formal existence in 1998 and was signed by 17 member countries. Even though GAFTA has waived most customs duties on Arabic products between the member states since 2005, it lacks benefits for cross-border investment and effective dispute resolution mechanisms. In fact the Arab states have better-structured agreements, providing for greater benefits, with foreign western states than they do with other Arab countries. For example, Jordan, Egypt, Bahrain, and the Sultanate of Oman have free trade agreements with the US. Other Arab countries, such as Morocco, enjoy limited agreement with the European Union that provide better investment opportunities and trade than GAFTA.\r\n\r\nI believe the current social and political situation in the Arab states means there is no better time than the present to develop a proper, effective, free trade agreement, eliminating trade barriers among the Arab states.  Most of the Arab states now agree that they must focus on establishing economies that benefit the people, rather than on political motivation. For the first time, the Middle Eastern states have digested their political and cultural differences and realised that the best way to stabilise the political situation within the region is to create an economic environment that benefits all.\r\n\r\nWhereas the difference in living standards be tween Arab states has previously been seen as a barrier to progress, I believe it should now be seen as an advantage. The different states can each benefit by creating new economic opportunities - wealthy countries that do not have the manpower to manage certain industries can develop relationships with other countries to assist each other in building strong economic opportunities and trade across their borders.\r\n\r\nAccordingly, there is an immediate need for the Arab League to progress GAFTA. It must become a true free trade agreement, eliminating all barriers in trading, manufacturing and investment among the Arab states and from outside the region. It is also vital that a mechanism is established to settle disputes effectively.\r\n\r\nImportantly, the benefits of greater economic integration will not be limited to Arab government-owned companies. The Arab private sector will benefit from a proper free trade agreement allowing labour, capital, raw material and goods to flow freely.  A stronger Arab market will also attract foreign direct investment from non-Arab manufacturers, for example, who could set up in the Middle East and utilize the benefits of free trade, while being comforted by a proper dispute resolution mechanism that would avoid the need to be subjected to the criminal or civil procedures in those jurisdictions.\r\n\r\nThe key challenge that a comprehensive free trade agreement will face, either at the GCC level or the Arab League level, is the political differences that still exist among the Arab states.  In particular, the countries involved in the Arab Spring, whose internal political parties are not able to agree in what direction the county is going and which lack a process for such decision making. These countries are in desperate need of a free trade agreement and the economic benefits it will create. Even with their political similarities and historical family ties, the achievement of the GCC states on the legislative front, and in relation to a free trade agreement, has been far from perfect.\r\n\r\nThe creation of a strong economic alliance among Arab states requires an agreement with wording of an international standard that is purely motivated and driven by economic needs for the benefit of the private sector, without political motivation. Excellent drafting is essential and there are many examples that can be used as guidelines to achieve such a comprehensive workable agreement.\r\n\r\nIn conclusion, it is evident that there is a need among the Arab states to have a comprehensive free trade agreement for goods and investment (which is unlikely to extend to services at this time) to be able to achieve economic growth and benefit across the board.  Even acknowledging the common benefit to the Arab countries, there are political challenges to overcome before a comprehensive free trade agreement can be achieved.  However, I do not doubt that such an agreement will be at the top of the agenda in future Arab-to-Arab relationship discussions, in the pursuit of the economic, social and political stability that all Arab states desire.'),
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(89970, 4895, 'content_description', 'The Arab states have sought economic unification ever since they collaborated with the British to force the Ottoman Empire out of the Middle East in the early 20th century. '),
(89971, 4895, '_content_description', 'field_59b641c07f473'),
(89972, 4895, 'pageSummary', 'The Arab states have sought economic unification ever since they collaborated with the British to force the Ottoman Empire out of the Middle East in the early 20th century.'),
(89973, 4895, '_pageSummary', 'field_59e59b307dec8'),
(89974, 4895, 'currentURL', 'http://www.tamimi.com/en/magazine/law-update/section-8/april-7/is-it-the-right-time-for-an-arab-free-trade-agreement.html'),
(89975, 4895, '_currentURL', 'field_59d35123ab1e7'),
(89976, 4895, 'lawUpdateArticleWriters_0_lawUpdateArticleWriter', '957'),
(89977, 4895, '_lawUpdateArticleWriters_0_lawUpdateArticleWriter', 'field_59da2ac06b065'),
(89978, 4895, 'lawUpdateArticleWriters', '1'),
(89979, 4895, '_lawUpdateArticleWriters', 'field_59da2a866b064'),
(89980, 4895, '_yoast_wpseo_metadesc', 'The Arab states have sought economic unification ever since they collaborated with the British to force the Ottoman Empire out of the Middle East in the early 20th century.'),
(89981, 4896, 'content', 'April 2014\r\n\r\n<hr />\r\n<p class=\"MsoNormal\">This law amended Dubai Law No. 12 of 2004, which established the DIFC Courts and set out the original gateways granting exclusive jurisdiction to them.  The parties in this case initially agreed that the courts of the Claimant’s country would have exclusive jurisdiction over any dispute arising under or in connection with the agreement between them.  Subsequently, however, the parties decided to confer jurisdiction on the DIFC Courts by way of a written agreement.</p>\r\n<p class=\"MsoNormal\">In the DIFC Courts’ short history, this case represents a further example of its expanding jurisdiction.  Prior to Law No. 16, the DIFC Courts could only assume jurisdiction over matters that had a direct connection to the DIFC, as set out in Law No. 12.  Broadly, this connection had to involve the subject matter of the dispute, the location of the parties or the transaction concluded.  Law No. 12, as amended by Law No. 16, opened the gates to potential cases without such a jurisdictional connection, or gateway.  It granted the DIFC Courts jurisdiction over cases “<em>if submitted thereto by the agreement of the parties in writing whether before or after the dispute</em>”.  As seen in the SPX Case, the effect of this opt-in provision is to allow the DIFC Courts to hear disputes between parties located anywhere in the world where there is no other jurisdictional connection with the DIFC.</p>\r\n<p class=\"MsoNormal\">Although the decision to opt into the jurisdiction of DIFC Courts should take account of a number of factors, the DIFC Courts have become known for offering several advantages over other courts in the region.  Their advantages include: an international  judiciary with significant experience in sophisticated commercial disputes; the availability of an immediate/summary judgment; and the opportunity to recover most of a successful party’s legal costs.  As a firm, Al Tamimi shares Justice Sir David Steel’s sentiment expressed in the SPX Case that it is “<em>legitimate to hope that this example is the first of many where parties take advantage of the extended jurisdiction of the Court</em>”.</p>'),
(181199, 4896, 'core_values', ''),
(89982, 4896, '_content', 'field_59b649b5c8b2b'),
(89983, 4896, 'lawUpdateArticleMonth', '4888'),
(89984, 4896, '_lawUpdateArticleMonth', 'field_59da2a396b063'),
(89985, 4896, 'content_description', 'The recent DIFC Courts’ decision in SPX Middle East FZE v Judi for Food Industries was the first judgment to have been issued as a result of contracting parties’ election to opt into the DIFC Courts’ jurisdiction, which has been possible since October 2011 pursuant to Dubai Law No. 16 of 2011.  '),
(89986, 4896, '_content_description', 'field_59b641c07f473'),
(89987, 4896, 'pageSummary', 'The recent DIFC Courts’ decision in SPX Middle East FZE v Judi for Food Industries was the first judgment to have been issued as a result of contracting parties’ election to opt into the DIFC Courts’ jurisdiction, which has been possible since October 2011 pursuant to Dubai Law No. 16 of 2011.'),
(89988, 4896, '_pageSummary', 'field_59e59b307dec8'),
(89989, 4896, 'currentURL', 'http://www.tamimi.com/en/magazine/law-update/section-8/april-7/opting-into-the-jurisdiction-of-the-difc-court.html'),
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(89994, 4896, '_lawUpdateArticleWriters', 'field_59da2a866b064'),
(89995, 4896, '_yoast_wpseo_metadesc', 'The recent DIFC Courts’ decision in SPX Middle East FZE v Judi for Food Industries was the first judgment to have been issued as a result of contracting parties’ election to opt into the DIFC Courts’ jurisdiction, which has been possible since October 2011 pursuant to Dubai Law No. 16 of 2011.'),
(89996, 4897, 'content', 'April 2014\r\n\r\n<hr />\r\n<p class=\"MsoNormal\">One of the most problematic issues relating to construction delay claims is that of concurrency.  Indeed, concurrency causes problems for many of those involved with construction claims, not only contract administrators (e.g., architects and engineers), but also for claims consultants, experts, lawyers and, apparently, even some members of the judiciary.<a href=\"#_ftn1\">[1]</a>  This article seeks to discuss the issue of concurrency in both an international and regional setting.<a href=\"#_ftn2\">[2]</a></p>\r\n<p class=\"MsoNormal\">The problems stem partly from the fact that there appears to be no agreed definition of what is meant by concurrency or how it should be interpreted and applied. Other problems arise when trying to determine whether concurrency applies to simultaneous or sequential<a href=\"#_ftn3\">[3]</a> events and whether it is the event or its effect which is important.</p>\r\n<p class=\"MsoNormal\">The above problems are not helped by the lack of a single, definitive authority which deals with all of the above, and these problems are further compounded by a difference of approach in different legal jurisdictions.<a href=\"#_ftn4\">[4]</a></p>\r\n<p class=\"MsoNormal\"><strong>What is concurrency?</strong></p>\r\n<p class=\"MsoNormal\">In the 2010 Scottish case of <em>City Inn</em> <em>v</em> <em>Shepherd</em> (referred to below) the judge highlighted the problem of trying to define the meaning of ‘concurrency’.<a href=\"#_ftn5\">[5]</a>  Indeed, it is probably easier to define what is meant by ‘concurrent delay’.  A definition of the latter, which is often used by English lawyers, is:</p>\r\n<p class=\"MsoNormal\"><em>‘A period of project overrun which is caused by two or more effective causes of delay which are of equal causative potency</em>.’<a href=\"#_ftn6\">[6]</a></p>\r\n<p class=\"MsoNormal\">In other words, a concurrent delay occurs when competing delay events (occurring either simultaneously or sequentially) overlap in their consequences.<a href=\"#_ftn7\">[7]</a>  Therefore, it is the ‘effect’ of the event which is all important and this is inextricably linked to the issue of causation.</p>\r\n<p class=\"MsoNormal\"><strong>Some Relevant Case Law</strong></p>\r\n<p class=\"MsoNormal\">Whilst it is acknowledged that the reference below to common law authorities which deal with the subject of concurrency and other time related issues are not binding in the UAE (for example the prevention principle<a href=\"#_ftn8\">[8]</a>), it is suggested that the principles laid down by these authorities may offer some guidance on how the international construction community may deal with the issue of delays in general and, in particular, concurrency.  Similarly, reference has also been made to the SCL Delay Protocol,<a href=\"#_ftn9\">[9]</a> which, whilst not a legal document (or statement of law) as such, may be considered to be informative (and, possibly, influential) as representing the general (or good) practice of dealing with delay claims in the construction industry. Readers will also be aware that many construction arbitrators in the UAE have common-law backgrounds, so parties (and their respective lawyers) appearing before them may wish to bear in mind how these arbitrators may themselves understand and deal with the issue of concurrency.<a href=\"#_ftn10\">[10]</a></p>\r\n<p class=\"MsoNormal\"><strong><em>Trollope &amp; Colls </em></strong><strong>v<em> North West </em>[1973] 9 BLR 60 </strong>– If an employer causes a delay then it cannot insist upon strict adherence to the time for completion.</p>\r\n<p class=\"MsoNormal\"><strong><em>Percy Bilton </em></strong><strong>v<em> GLC </em>[1982] 20 BLR 1 (HL) </strong>– Unless a contract provides otherwise, an employer cannot rely upon a liquidated damages clause if it has prevented the contractor from completing; instead, it would have to claim general damages from whenever the contractor should have completed, after allowing a reasonable time for completion. However, and most importantly, in order to be entitled to an extension of time a contractor must still demonstrate a causal link between the relevant event and the delay to completion.</p>\r\n<p class=\"MsoNormal\"><strong><em>SMK Cabinets </em></strong><strong>v<em> Hilti </em>[1984] VR<em> 391–</em></strong> This Australian case appears to have gone against the application of both the ‘but for’ and dominant cause tests. The case held that it does not matter if the contractor would not have been able to complete in time anyway, if the employer caused delay then it prevented the contractor from completing.</p>\r\n<p class=\"MsoNormal\"><strong><em>H Fairweather </em></strong><strong>v<em> Borough of Wandsworth </em>[1987] 39 BLR 106<em> – </em></strong>In this case the judge expressly disapproved the use of the dominant cause test when dealing with concurrent delays for claims for an extension of time. This view was subsequently agreed upon by an eminent construction lawyer.<a href=\"#_ftn11\">[11]</a></p>\r\n<p class=\"MsoNormal\"><strong><em>Balfour Beatty </em></strong><strong>v<em> Chestermount </em>[1993] 62 BLR 1 </strong>– This case dealt with relevant events occurring after the original completion date and when the contractor was in culpable delay. It was held that the contractor was entitled to an extension of time attributable to a (post-completion) variation/instruction, but that the period of the extension should only be ‘dotted-on’ to the original or extended completion date (colloquially known as the ‘dot-on’ or ‘net’ approach).  However, and crucially, the relevant event must still be shown to cause a critical delay. It is not enough that a relevant event occurred; a causal link between cause and effect must still be established. It is suggested that the judge in this case caused some confusion when he commented that in some circumstances it may not be ‘fair’ to grant a contractor an extension of time if the relevant event was ‘caused’ by the contractor’s own delay”.<a href=\"#_ftn12\">[12]</a></p>\r\n<p class=\"MsoNormal\"><strong><em>Henry Boot </em></strong><strong>v<em> Malmaison </em>[1999]</strong> <strong>70 ConLR 32</strong>– It was agreed between the parties in this case that if there are two concurrent causes of delay, one of which is a relevant event, then the contractor is entitled to an extension of time for the delay caused by the relevant event, provided it can be shown to have caused a critical delay. Notwithstanding the <em>Royal Bromptom</em> case (see below), an eminent construction lawyer takes the view that <em>Malmaison</em> represents how English law should deal with concurrency and that the dominant cause test is not applicable to extension of time claims.<a href=\"#_ftn13\">[13]</a><sup>,<a href=\"#_ftn14\">[14]</a></sup></p>\r\n<p class=\"MsoNormal\">Arguably, when considering whether to grant an extension of time an engineer should (unless the contract provides otherwise) consider other events, and not just the relevant events relied upon by the contractor, to see if the contractor’s progress has been affected.<a href=\"#_ftn15\">[15]</a></p>\r\n<p class=\"MsoNormal\"><strong><em>Royal Bromptom </em></strong><strong>v<em> Hammond </em>[2001] 76 ConLR 148</strong> – In order to obtain an extension of time a contractor must show that the relevant event caused a delay to completion, it is not enough that it is a relevant event. In the author’s experience, this crucial requirement is often overlooked by contractors and it comes down to a detailed analysis of factual events and a consideration of the critical path to determine when the event occurred and if completion was actually affected, and if so, by how much.</p>\r\n<p class=\"MsoNormal\">In this case the judge sought to distinguish between simultaneous and sequential concurrency.  The judge said that the case of <em>Malmaison</em> was concerned only with simultaneous concurrency.  However, a reading of the judgment in <em>Malmaison </em>discerns that the judge appeared to make no such distinction.</p>\r\n<p class=\"MsoNormal\">The judge in <em>City Inn</em> (referred to below), along with an eminent construction lawyer,<a href=\"#_ftn16\">[16]</a> took the view that the judge in <em>Royal Bromptom</em> case was wrong to distinguish between simultaneous and sequential concurrency.</p>\r\n<p class=\"MsoNormal\"><strong><em>Multiplex v Honeywell </em></strong><strong>[2007] BLR 195<em> – </em></strong>An employer cannot hold a contractor to a completion date if the employer has caused the contractor to miss that date, i.e., time becomes at large.<a href=\"#_ftn17\">[17]</a> <a href=\"#_ftn18\">[18]</a></p>\r\n<p class=\"MsoNormal\"><strong><em>City Inn v Shepherd </em></strong><strong>[2008] 8 BLR 269 (CSOH); [2010] BLR 473 (CSIH)<em> – </em></strong>In this Scottish case the judge went against <em>Royal Bromptom</em> and instead chose not to distinguish between simultaneous and sequential concurrent delays, but also went further by adopting the “apportionment approach”. The judge’s interpretation of the <em>Malmaison </em>case and disagreement with the <em>Royal Bromptom </em>case (i.e., there should be no difference between simultaneous and sequential delays) has since been supported by an eminent construction lawyer.<a href=\"#_ftn19\">[19]</a></p>\r\n<p class=\"MsoNormal\"><strong><em>De Beers UK v Atos </em></strong><strong>[2010]</strong> <strong>EWHC 3276</strong>– This case followed the <em>Malmaison </em>approach, i.e., where there is concurrent delay then a contractor should get time but not its costs.</p>\r\n<p class=\"MsoNormal\"><strong><em>Adyard v SD Marine </em></strong><strong>[2011] BLR 384 </strong>– This shipbuilding case appears to have used the dominant cause test to deal with delays, i.e. it was decided that variations were instructed by the employer when the contractor was already in culpable delay and so these variations had no effect on the already delayed completion date. The authorities referred to above suggest that the judge in this case was wrong to have applied the dominant cause test approach and failed to have proper regard to the prevention principle.</p>\r\n<p class=\"MsoNormal\"><strong><em>Jerram v Fenice </em></strong><strong>[2011] BLR 644 – </strong>In this case the judge not only followed the judge in <em>Adyard</em>  but appeared to go even further and suggest that when a relevant event occurs and the contractor is already in culpable delay, then the prevention principle will not apply. The judge in this case also appeared to apply the dominant cause test. At least one legal commentator has suggested that the judgment in <em>Jerram</em> was wrong.<a href=\"#_ftn20\">[20]</a></p>\r\n<p class=\"MsoNormal\"><strong><em>Walter Lilly</em></strong><strong> <em>v MacKay</em> [2012] BLR 503</strong> – In his judgment the judge confirmed that there was a difference of approach in England and Scotland when dealing with concurrency. The judge confirmed that the ‘apportionment approach’ was not applicable in England. The English approach may be stated thus: if there are two events causing concurrent delay, one of which is caused by the employer, then the contractor is entitled to an extension of time and there is no reason (or legal basis in England) to apportion delay.<a href=\"#_ftn21\">[21]</a></p>\r\n<p class=\"MsoNormal\"><strong>SCL Delay and Disruption Protocol</strong></p>\r\n<p class=\"MsoNormal\">The SCL Delay Protocol appears to mirror the English law (<em>Malmaison</em>) position where it talks about concurrency because at Core Principle No.9 it provides that if there is both a contractor and employer caused delay then the contractor’s entitlement to an extension of time should not be reduced. The SCL Delay Protocol explains the basis of its position in this respect at Sections 1.4.5 and 1.4.7.</p>\r\n<p class=\"MsoNormal\"><strong>UAE laws dealing with late completion and delay damages</strong></p>\r\n<p class=\"MsoNormal\">Whilst the above may demonstrate what concurrent delay is and how it is applied in the English courts at least, how is it dealt with under UAE law?</p>\r\n<p class=\"MsoNormal\">It will be appreciated by those familiar with construction law in the UAE that principles and concepts which are fairly well developed in other legal jurisdictions may not be so easily found within the laws of the UAE.<a href=\"#_ftn22\">[22]</a>  Experience suggests that it is not uncommon for some foreign lawyers who are new to the region try and shoehorn their own legal principles into the provisions of UAE law in an attempt to deal with some of the legal issues they encounter here in the UAE.</p>\r\n<p class=\"MsoNormal\">Concepts such as ‘concurrent delay’, ‘extension of time’, ‘prevention principle’ and ‘time at large’ are not expressly provided for within UAE law.<a href=\"#_ftn23\">[23]</a>  However, the fact that they do not exist as such should not cause too much concern because there are provisions to be found which may provide for a similar result.</p>\r\n<p class=\"MsoNormal\">It is trite, according to English law anyway, that a time delay does not necessarily give rise to financial recompense.  What this means is that whilst a contractor may be entitled to an extension of time under a contract, this does not necessarily mean it will receive compensation for that delay, i.e. it must prove a causal link between the delay and its loss. To distinguish between time and money, experts and lawyers often refer to excusable and compensable delays.  However, it is suggested that when considering these issues under UAE law, one should look at both the bigger picture and the end result to see how concurrent delay can be dealt with under UAE law.</p>\r\n<p class=\"MsoNormal\">Whilst UAE law does not allow for a contract to be extended without agreement,<a href=\"#_ftn24\">[24]</a> Articles 247, 249, 414 and 472 of the UAE Civil Code may, in some (possibly exceptional) cases, be relied upon to give a contractor a release from strict performance in terms of time.</p>\r\n<p class=\"MsoNormal\">Where a completion date cannot be extended (either pursuant to the contract or law), a contractor is, by default (under FIDIC), liable for liquidated damages.  However, Article 878 of the UAE Civil Code may assist a contractor because it provides that a contractor will only be liable for any loss or damage insofar as the loss does not arise from an event which the contractor could not prevent (e.g. an employer caused delay).<a href=\"#_ftn25\">[25]</a>  Similarly, Article 290 of the UAE Civil Code provides that a judge (or tribunal) may take into account the level of involvement of the other party (i.e. the employer) when assessing compensation.<a href=\"#_ftn26\">[26]</a>  One possible interpretation of Article 291 of the UAE Civil Code is that it may allow a judge (or arbitrator) to ‘apportion’ liability for concurrent delay.  Of course, conversely, an employer can rely upon these same provisions insofar as a contractor may be claiming an extension of time or prolongation costs during a period of concurrent delay.</p>\r\n<p class=\"MsoNormal\">One of the provisions of UAE law which is most often cited in construction disputes is the duty of ‘good faith’, which can be found at Article 246(1) of the UAE Civil Code. This provision is often relied upon by contractors when making allegations of unlawful acts (or inaction) by engineers or employers. In addition to this provision of good faith, Article 106 of the UAE Civil Code prohibits the unlawful exercise of a right. Hence, if an employer causes delay and the engineer subsequently fails to grant an extension of time for the same (or the contract does not allow an extension of time to be granted) then an employer’s subsequent attempt to levy liquidated damages for the contractor’s late completion could possibly fall foul of the Articles 106 and 246(1). Alternatively, a contractor may argue that in circumstances where the employer caused delay the employer would be unjustly enriched if it were to recover liquidated damages for this period. Again, these are all provisions which could also be relied upon by the employer if the contractor’s concurrent delay can be proven.</p>\r\n<p class=\"MsoNormal\">Notwithstanding the above, if a contractor believes that it has not been properly granted an extension of time (or if the contract does not allow for an extension) it may, amongst other things, seek to challenge an employer’s deduction of liquidated damages by way of Article 390(2) of the UAE Civil Code.  The decision whether to adjust the amount of liquidated damages will be at the discretion of the judge (or tribunal). At first glance, Article 390(2) may seem like a contractor’s trump card insofar as it may make life difficult for an employer because the employer would then have to prove its actual loss. However, contractors would do well to remember that the UAE Courts have consistently held that it is the contractor who has the burden of proving that the pre-agreed liquidated damages do not represent the employer’s actual loss.<a href=\"#_ftn27\">[27]</a> Of course, an employer may also apply to lift the capping of liability if it believes (and can prove) its actual losses are far greater than the pre-agreed liquidated damages.</p>\r\n<p class=\"MsoNormal\">When exercising its discretion under Article 390(2) a court (or tribunal) will likely consider the UAE’s hierarchy of laws and the underlying theme of freedom to contract and <em>pacta sunt servanda </em>(‘agreements must be kept’).<a href=\"#_ftn28\">[28]</a><sup> <a href=\"#_ftn29\">[29]</a></sup> It is widely recognized that clear words cannot be easily departed from.<a href=\"#_ftn30\">[30]</a>  Therefore, it may not be as easy as first thought for a party to simply turn round when later in dispute and cry ‘foul’ because it no longer likes the consequence of what it had previously agreed as acceptable as liquidated damages.</p>\r\n<p class=\"MsoNormal\"><strong>Dealing with Concurrency in the UAE</strong></p>\r\n<p class=\"MsoNormal\">In light of the above, what principles can be drawn when faced with arguments of concurrent delay in a construction dispute in the UAE?</p>\r\n<p class=\"MsoNormal\">As with any construction claim, careful consideration should first be had to the terms of the contract.</p>\r\n<p class=\"MsoNormal\">Pursuant to Sub-Clause 43.1 of FIDIC 4<sup>th</sup> Ed.,<a href=\"#_ftn31\">[31]</a> one of the contractor’s primary obligations is to complete on time<a href=\"#_ftn32\">[32]</a> and this obligation is reinforced by Articles 243, 246(1), 874 and 877 of the UAE Civil Code.<a href=\"#_ftn33\">[33]</a>  Particular regard should be had to how the parties have agreed to apportion risk for delay under the terms of the contract, e.g. Sub-Clause 44.1 of FIDIC 4<sup>th</sup> Ed.<a href=\"#_ftn34\">[34]</a></p>\r\n<p class=\"MsoNormal\">Because of the serious financial consequences arising from the late completion of a construction project, a contractor will often seek to excuse its delayed completion by laying some (if not all) of the fault at the door of the employer (or engineer). Conversely, an employer will likely argue that there was concurrent delay on the part of the contractor. Specifically in terms of concurrency:</p>\r\n\r\n<ol>\r\n 	<li>A contractor will likely argue that if the employer has caused a critical delay then the contractor is entitled to an extension of time, even if the contractor was in culpable (i.e. concurrent) delay itself.<a href=\"#_ftn35\">[35]</a> <a href=\"#_ftn36\">[36]</a></li>\r\n 	<li>An employer will likely argue that by reason of the contractor’s culpable delay the contractor would have been late anyway; hence, there is no entitlement to an extension of time.<a href=\"#_ftn37\">[37]</a><em> </em></li>\r\n</ol>\r\n<p class=\"MsoNormal\">To determine whether there has been a concurrent delay when faced with a contractor’s claim for an extension of time it is suggested that one approach would be for the engineer to first carry out a comprehensive review of the facts against the relevant and most recently updated programme (i.e. the programme which shows the latest critical path prior to the events occurring) to determine whether an employer and/or contractor risk event actually caused a critical delay to the overall completion date.<a href=\"#_ftn38\">[38]</a></p>\r\n<p class=\"MsoNormal\">As part of such a review it would be imperative for the engineer to have regard to the apportionment of risk for delay events under the contract. A perusal of most standard form contracts used in the UAE discerns that if a relevant event occurs <em>and</em> causes (or, is likely to cause) delay to completion then a contractor should be awarded an extension of time.</p>\r\n<p class=\"MsoNormal\">In the context of concurrent delay, this raises the question: can an extension of time clause be interpreted in such a way that the intention of the parties was that if an employer risk event caused (or is likely to cause) a critical delay when a contractor was in concurrent delay then the contractor is not entitled to an extension of time? A possible answer to this question is that, based on an interpretation of the FIDIC forms of contract at least, it appears that if there is concurrency then, provided the contract allows for the award of an extension of time, the contractor should still get an extension of time and the financial consequences would flow as laid down in the UAE laws referred to above.</p>\r\n<p class=\"MsoNormal\"><strong>Summary</strong></p>\r\n<p class=\"MsoNormal\">Leaving aside possible time bar and condition precedent issues, when faced with a claim from a contractor for an extension of time based upon an employer risk event an engineer should firstly determine whether the alleged event occurred in the manner described by the contractor and, secondly, determine whether the event actually caused a critical delay or not.<a href=\"#_ftn39\">[39]</a> If it did, then the next stage is to consider by how much. Ordinarily, if there was no concurrent delay the engineer would then likely grant an appropriate extension of time. However, if upon reviewing the facts the engineer determines that a concurrent delay did occur the engineer will (as best he can) need to review the as-built information for the period when the concurrent delay event occurred and determine whether this concurrent delay event also affected the completion date and will, no doubt, make a decision as to the extension of time entitlement based on one of the approaches referred to above.</p>\r\n<p class=\"MsoNormal\">Whilst the award of an extension of time will negate a contractor’s liability for liquidated damages, if the contractor was in concurrent delay then UAE law will likely protect an employer from a contractor’s claims for prolongation costs.</p>\r\n<p class=\"MsoNormal\"><em>The views</em> <em>expressed in this article are the author’s own and should in no way be taken as those of the firm. </em></p>\r\n\r\n<div>\r\n\r\n&nbsp;\r\n\r\n<hr size=\"1\" />\r\n\r\n<div>\r\n<p class=\"MsoFootnoteText\"><a href=\"#_ftnref\">[1]</a>  Winter J., <em>How Should Delay be Analysed – Dominant Cause and its Relevance to Concurrent Delay, </em>SCL Paper 153, January 2009, p.20.</p>\r\n\r\n</div>\r\n<div>\r\n<p class=\"MsoFootnoteText\"><a href=\"#_ftnref\">[2]</a> This article does not seek to deal with other construction delay related topics such as the ownership of float or pacing delays.</p>\r\n\r\n</div>\r\n<div>\r\n<p class=\"MsoFootnoteText\"><a href=\"#_ftnref\">[3]</a> Sequential in this context means events which do not start and finish at the same time but which involve a degree of overlap; whereas, simultaneous events are those which start and finish together and give rise to the term ‘true concurrency’.</p>\r\n\r\n</div>\r\n<div>\r\n<p class=\"MsoFootnoteText\"><a href=\"#_ftnref\">[4]</a>  Some of the more notable cases on the issue of concurrency are referred to below.  However, this article is not intended to be an exhaustive review of the case law on the subject.</p>\r\n\r\n</div>\r\n<div>\r\n<p class=\"MsoFootnoteText\"><a href=\"#_ftnref\">[5]</a>  ‘One of the problems in using such expressions as “concurrent delay” or “concurrent delaying events” is that they may refer to a number of different situations.’  Per Lord Osborne <em>City Inn v. Shepherd</em> [2010] BLR 473.</p>\r\n\r\n</div>\r\n<div>\r\n<p class=\"MsoFootnoteText\"><a href=\"#_ftnref\">[6]</a>  John Marrin QC, <em>Concurrent Delay</em>, SCL Paper, February 2002.</p>\r\n\r\n</div>\r\n<div>\r\n<p class=\"MsoFootnoteText\"><a href=\"#_ftnref\">[7]</a> It should be said at the outset that upon a forensic investigation of the facts there is often found to be no ‘true concurrency’.</p>\r\n\r\n</div>\r\n<div>\r\n<p class=\"MsoFootnoteText\"><a href=\"#_ftnref\">[8]</a> The meaning of the “prevention principle” was succinctly stated by Jackson J (as he then was) in <em>Multiplex </em>v<em> Honeywell  </em>[2007]  BLR 195<em>; </em> namely “the essence of the prevention principle is that the promisee cannot insist upon the performance of an obligation which he has prevented the promisor from performing …”</p>\r\n\r\n</div>\r\n<div>\r\n<p class=\"MsoFootnoteText\"><a href=\"#_ftnref\">[9]</a> <em>The Society of Construction Law Delay and Disruption Protocol</em>, SCL, October 2002.</p>\r\n\r\n</div>\r\n<div>\r\n<p class=\"MsoFootnoteText\"><a href=\"#_ftnref\">[10]</a>  Some of these authorities may prove useful in the DIFC Courts.</p>\r\n\r\n</div>\r\n<div>\r\n<p class=\"MsoFootnoteText\"><a href=\"#_ftnref\">[11]</a>  Winter J., <em>How Should Delay be Analysed – Dominant Cause and its Relevance to Concurrent Delay, </em>SCL Paper 153, January 2009, p.14.</p>\r\n\r\n</div>\r\n<div>\r\n<p class=\"MsoFootnoteText\"><a href=\"#_ftnref\">[12]</a>  With this confusion in mind, it should be noted that Sub-Clause 44.1 of FIDIC 4th Ed refers to the extension of time to which a contractor is <em>fairly</em> entitled.</p>\r\n\r\n</div>\r\n<div>\r\n<p class=\"MsoFootnoteText\"><a href=\"#_ftnref\">[13]</a>  Winter J., <em>How Should Delay be Analysed – Dominant Cause and its Relevance to Concurrent Delay, </em>SCL Paper 153, January 2009, p.20.  It is suggested that the cases of <em>SMK Cabinets</em> and <em>Fairweather </em>support the view that the dominant cause approach should not be used in extension of time claims (i.e., it is only applicable to damages claims arising therefrom).</p>\r\n\r\n</div>\r\n<div>\r\n<p class=\"MsoFootnoteText\"><a href=\"#_ftnref\">[14]</a> This also appears to be the view of another eminent construction lawyer: Corbett E., <em>FIDIC</em> 4<sup>th </sup><em> A Practical Legal Guide, </em>Sweet &amp; Maxwell, 1991, pp. 254-257; and of a leading delay analyst: Pickervance K., <em>Delay and Disruption in Construction Contracts, </em>LLP, 3<sup>rd</sup> Ed, 2005, p.624.</p>\r\n\r\n</div>\r\n<div>\r\n<p class=\"MsoFootnoteText\"><a href=\"#_ftnref\">[15]</a> FIDIC 4<sup>th </sup>Ed: Sub-Clause 44.1 refers to what a contractor is ‘fairly’ entitled to and Sub-Clause 2.6 refers to the Engineer taking in ‘all the circumstances’.   Sub-Clause 3.5 of FIDIC 1999 Red Book refers to the Engineer ‘taking due regard of all relevant circumstances’.</p>\r\n\r\n</div>\r\n<div>\r\n<p class=\"MsoFootnoteText\"><a href=\"#_ftnref\">[16]</a> Winter J., <em>et al,</em> ‘<em>One step forward, two steps back’, Civil Engineering Surveyor</em>, November 2011. p.36.</p>\r\n\r\n</div>\r\n<div>\r\n<p class=\"MsoFootnoteText\"><a href=\"#_ftnref\">[17]</a> <em>Time at large</em> is a common law concept which is not found within UAE law.</p>\r\n\r\n</div>\r\n<div>\r\n<p class=\"MsoFootnoteText\"><a href=\"#_ftnref\">[18]</a> Of course, the concept of ‘time at large’ does not exist per se in the UAE.</p>\r\n\r\n</div>\r\n<div>\r\n<p class=\"MsoFootnoteText\"><a href=\"#_ftnref\">[19]</a> Winter J., ‘<em>How Should Delay be Analysed – Dominant Cause and its Relevance to Concurrent Delay’, </em>SCL Paper 153, January 2009, p.16.</p>\r\n\r\n</div>\r\n<div>\r\n<p class=\"MsoFootnoteText\"><a href=\"#_ftnref\">[20]</a> Winter J., <em>et al,</em> ‘<em>One step forward, two steps back’, Civil Engineering Surveyor</em>, November 2011. p.38.</p>\r\n\r\n</div>\r\n<div>\r\n<p class=\"MsoFootnoteText\"><a href=\"#_ftnref\">[21]</a> <em>Walter Lilly &amp; Co. Ltd</em> v. <em>GPC MacKay and DMW Developments Ltd</em> [2012] EWHC 1773 (TCC) per Mr. Justice Akenhead at [370].  It may be said that the English courts apply the test of causation mores strictly than in Scotland in this context.</p>\r\n\r\n</div>\r\n<div>\r\n<p class=\"MsoFootnoteText\"><a href=\"#_ftnref\">[22]</a> Many of the UAE’s larger construction projects have adopted either the FIDIC 1987 or 1999 forms of contract, both of which post-date the UAE’s Civil Code of 1985.  This dilemma is compounded by reason of the fact that the FIDIC 1987 form can be traced back to the English ICE standard form which was drafted with common law principles in mind.</p>\r\n\r\n</div>\r\n<div>\r\n<p class=\"MsoFootnoteText\"><a href=\"#_ftnref\">[23]</a> By ‘UAE law’ regard here is had to Federal Law No.5 of 1985 (the Civil Code), unless stated otherwise.</p>\r\n\r\n</div>\r\n<div>\r\n<p class=\"MsoFootnoteText\"><a href=\"#_ftnref\">[24]</a> Article 877 of the Civil Code provides that a contractor must complete in accordance with the conditions of contract, which, some would argue, means it must complete by the agreed time for completion.</p>\r\n\r\n</div>\r\n<div>\r\n<p class=\"MsoFootnoteText\"><a href=\"#_ftnref\">[25]</a> Article 386 of the UAE Civil Code may have a similar effect.</p>\r\n\r\n</div>\r\n<div>\r\n<p class=\"MsoFootnoteText\"><a href=\"#_ftnref\">[26]</a> Articles 287 and 291 of the UAE Civil Code may have a similar effect.</p>\r\n\r\n</div>\r\n<div>\r\n<p class=\"MsoFootnoteText\"><a href=\"#_ftnref\">[27]</a> There are ways whereby a contractor can possibly overcome this evidential burden.</p>\r\n\r\n</div>\r\n<div>\r\n<p class=\"MsoFootnoteText\"><a href=\"#_ftnref\">[28]</a> Article 257 – UAE Civil Code, i.e., the contract (and terms thereof) is what the parties freely consented to.</p>\r\n\r\n</div>\r\n<div>\r\n<p class=\"MsoFootnoteText\"><a href=\"#_ftnref\">[29]</a> See also, Articles 389 and 390(1) of the UAE Civil Code which expressly refer to the compensation fixed by the contract.</p>\r\n\r\n</div>\r\n<div>\r\n<p class=\"MsoFootnoteText\"><a href=\"#_ftnref\">[30]</a> Article 265(1) – UAE Civil Code.</p>\r\n\r\n</div>\r\n<div>\r\n<p class=\"MsoFootnoteText\"><a href=\"#_ftnref\">[31]</a> Sub-Clause 8.2 FIDIC 1999 Red Book.</p>\r\n\r\n</div>\r\n<div>\r\n<p class=\"MsoFootnoteText\"><a href=\"#_ftnref\">[32]</a> This includes any extended time for completion.</p>\r\n\r\n</div>\r\n<div>\r\n<p class=\"MsoFootnoteText\"><a href=\"#_ftnref\">[33]</a> As intimated above, some might argue that Article 877 does not extend to obligations such as progress and completion.</p>\r\n\r\n</div>\r\n<div>\r\n<p class=\"MsoFootnoteText\"><a href=\"#_ftnref\">[34]</a> Sub-Clauses 8.4 and 8.5 FIDIC 1999 Red Book.</p>\r\n\r\n</div>\r\n<div>\r\n<p class=\"MsoFootnoteText\"><a href=\"#_ftnref\">[35]</a> This is the <em>Malmaison </em>approach of the English courts.</p>\r\n\r\n</div>\r\n<div>\r\n<p class=\"MsoFootnoteText\"><a href=\"#_ftnref\">[36]</a> Contractors will often argue that its own delay was not a concurrent delay but merely a pacing delay.</p>\r\n\r\n</div>\r\n<div>\r\n<p class=\"MsoFootnoteText\"><a href=\"#_ftnref\">[37]</a> This is dominant cause approach and the <em>Royal Brompton</em> approach if there was no true concurrency.</p>\r\n\r\n</div>\r\n<div>\r\n<p class=\"MsoFootnoteText\"><a href=\"#_ftnref\">[38]</a> If the records are not available and/or the programmes have not been properly updated then a critical path analysis may not be possible.  Moreover, a critical path analysis may sometimes be seen as too theoretical.  This issue arose in one of the cases referred to above.</p>\r\n\r\n</div>\r\n<div>\r\n<p class=\"MsoFootnoteText\"><a href=\"#_ftnref\">[39]</a> Under the FIDIC forms of contract issues relating to timely notice (i.e., conditions precedent and time bars) and the level of detailed particulars provided would also be considered at this stage, but the legal status of the same is outside the scope of this article.</p>\r\n\r\n</div>\r\n</div>'),
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(90021, 4898, 'content', 'April 2014\r\n\r\n<hr />\r\n\r\nThis note considers the position under UAE law and how a Court (or Arbitral Tribunal) might approach this issue where a contractor cannot (or will not) implement the option selected by the employer.\r\n\r\n<strong>The problem</strong>\r\n\r\nAn example of the issue, based on an actual set of facts, is as follows:\r\n\r\n‘A’ enters into a contract with ‘B’ to build a swimming pool for his hotel. The design depth is three metres at the deep end. Upon completion it is discovered that the depth is 2.5 metres.  A requires B to specifically perform the contract by rebuilding the pool to the agreed depth. B refuses on the basis that the pool complies with international safety codes for minimum water depths for head first diving, but is willing to pay an amount equivalent to the decrease in value of the pool, which is considerably less than the cost of rebuilding the pool. A sues B under the contract to recover the cost of rebuilding the swimming pool to the agreed depth.\r\n\r\n<strong>Position under UAE law</strong>\r\n\r\nUnder Articles 877 and 878 of Federal Law No.5 of 1987 (commonly referred to as the Civil Code), a contractor must complete its work in accordance with the conditions of the contract (including agreed specifications etc.).  If works are defective or do not comply with contractual conditions, the employer may require the contract to be cancelled if it is impossible to correct the works. If it is possible to make good the work (as it would be in the above example) the employer may require the contractor to do so within a reasonable period, failing which application can be made to the Court (or Arbitral Tribunal) to either cancel the contract or engage a third party to complete the work at the cost of the first contractor.\r\n\r\nArticle 274 of the Civil Code provides that if the contract is cancelled, the Court must ensure that the parties are restored to the position they were in had the contract been properly performed.\r\n\r\nArticles 386 and 389 of the Civil Code provide that the judge must assess compensation in an amount equivalent to the damage caused by the breach of contract. Under Article 390 of the Civil Code the Court may, upon application of either party, re-assess and adjust the pre-agreed amount of compensation so that it is equal to the actual loss suffered.\r\n\r\nFor comparative purposes, consider the position for a moment in England. The Courts in this jurisdiction could measure the sum of money to be awarded as compensation in one of three ways, namely:\r\n<ul>\r\n 	<li>the cost of reinstatement, i.e. remedial works to reinstate the pool to the agreed depth;</li>\r\n 	<li>reimbursement of any cost saving to the contractor of building a more shallow pool; or</li>\r\n 	<li>reimbursement of the diminution in value of the swimming pool, i.e. loss in value of the property because it is less marketable due to the defective work.</li>\r\n</ul>\r\nAn English court generally considers reinstatement as the appropriate measure of compensation, since the employer is, as a general rule, entitled to have a building which conforms to the contract plans on the provisio that it is reasonable for the employer to insist upon reinstatement and making good the defective work is not unnecessary or extravagant. If an employer is insisting that a pool be opened up and made one inch deeper, it would in all probability be considered unnecessary.\r\n\r\nUnder UAE law, a Court must decide whether to order specific performance or that the cost of engaging a third party to complete the work (i.e. remedial work) be paid by the contractor to the employer, or cancel the contract and order that the contractor pay compensation. It is a basic principle under Article 386 of the Civil Code that before assessing compensation the judge must be satisfied that specific performance is impossible. Under Article 885 of the  Code the employer is only obliged to pay the countervalue of the thing contracted, i.e. the contractor cannot be unjustly enriched from his breach of contract, and therefore reimbursement of the difference in cost to the builder of the actual work done and the work specified is also one of the bases for assessing the sum of money to be awarded.\r\n\r\nUnlike the general position in England that the employer’s insistence on reinstatement must be reasonable, this is not an express requirement under the Code.  However, Article 246 of the Code provides for a pervasive principle of fairness in all contractual dealings, and Article 389 provides for something akin to the duty to mitigate the loss, which together provides some protection to contractors.\r\n\r\nIf the above example were decided in the UAE then a UAE Court would, provided it is satisfied that specific performance is impossible, choose between ordering that remedial costs or compensation be paid by B. Courts frequently appoint an expert to identify the options for remedying defective works, but it is rarer for Arbitral Tribunals to do so. If an expert is not appointed or the expert identifies more than one option, and the contractor can establish that reinstatement is unreasonable or extravagant, then a Court (or Arbitral Tribunal) could assess the sum of money to be awarded as compensation on the basis of reimbursing the employer the difference in cost of the actual work done and the work specified or payment of the loss in value of the property because the swimming pool is more shallow. If the loss in value exceeds the difference in building cost, then the former would be the more likely basis for assessing the sum to be awarded as compensation.\r\n\r\n<strong>Conclusion</strong>\r\n\r\nCases involving construction defects are extremely fact sensitive. However the above demonstrates that under UAE law there are a variety of potential remedies. Which is the most appropriate will depend on the particular contract, the records and evidence available, and how expensive it may be to remedy the defect.'),
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(90044, 4899, 'content', 'April 2014\r\n\r\n<hr />\r\n\r\nThe RDC was established by Decree No. 26 of 2013 and has been operational since 17 November 2013 to provide improved resolutions to tenancy disputes in Dubai within a shorter time frame. Judge Abdul Qader Mousa is the current head of the RDC.\r\n\r\n<strong>Tenancy Law</strong>\r\n\r\nIn Dubai, the relationship between landlord and tenant is governed by Law No. 26 of 2007 as amended by Law No. 33 of 2008 (“Tenancy Law”).\r\n\r\nArticle 25(2) of the Tenancy Law provides four grounds whereby a landlord may evict a tenant upon expiry of the tenancy contract provided that a prior written notice of termination is served to the tenant at least 12 months beforehand by Notary Public or by registered mail. The four grounds are as follows:\r\n<ol>\r\n 	<li>“If the owner wishes to demolish the property for reconstruction or add new constructions that prevent tenant from benefiting from the leased property, provided that necessary licences are obtained;</li>\r\n 	<li>If the property requires renovation or comprehensive maintenance which cannot be executed while tenant is occupying the property, provided that a technical report issued by Dubai Municipality or accredited by it is submitted to this effect;</li>\r\n 	<li>If the owner of the property wishes to recover the property for use by him personally or by his next of kin of first degree provided that he proves that he does not own a suitable alternative property for that purpose; and</li>\r\n 	<li>If the owner of the property wishes to sell the leased property.”</li>\r\n</ol>\r\nIn a recent judgment, the Appeal Department of the RDC overruled the First Instance Department of RDC in relation to eviction and non-renewal clauses in the contractual agreement between the landlord and the tenant. We highlight below the main clarifications issued by the Appeal Department regarding tenancy contracts disputes.\r\n\r\n<strong>Notice Period</strong>\r\n\r\nThe RDC has clarified that it shall not admit any tenancy dispute case prior to completion of the mandatory 30 days’ notice period stated in Article 16 of Dubai Decree No. 26 of 2013.\r\n\r\nThis is a departure from previous judgments passed by the old rent committee and adds an increased level of transparency and fairness to the parties in dispute. Further RDC’s renewed approach is in compliance with best practices applicable to tenancy disputes.\r\n\r\n<strong>Non renewal clause</strong>\r\n\r\nA common clause seen widely in tenancy contracts is: “Renewal is at the discretion of the Landlord. This Tenancy Contract shall terminate upon expiry and the tenant shall vacate the premises.”\r\n\r\nIn the present judgment, the Appeal Department of the RDC emphasized the importance of UAE public policy and regarded this clause to be in breach of such policy. Article 25(2) of the Tenancy Law lays down the four limited grounds whereby a landlord can demand eviction of the tenant upon expiry of the tenancy contract and any other ground would not be acceptable to RDC.\r\n\r\nIn the past we have seen varying judgments with conflicting views issued by the old rent committee. We hope that the RDC continues to issue such clear judgments in future cases.\r\n\r\n<strong>Practice Note</strong>\r\n\r\nThe decision by the Appeal Department is particularly helpful as it provides a clear judgment. The approach adopted by the new RDC is consistent with the Tenancy Law as well as public policy in UAE.\r\n\r\n<strong>Future Developments</strong>\r\n\r\nThe RDC has indicated that they will implement various new initiatives in the near future including the following:\r\n<ol>\r\n 	<li>The issuance of further clarifications and the introduction of new laws relating to RDC procedures and fees;</li>\r\n 	<li>Amendments to the current Tenancy Law;</li>\r\n 	<li>The introduction of electronic filing for cases before the RDC whereby attendance in person will be unnecessary;</li>\r\n 	<li>The introduction of a new template tenancy agreement.</li>\r\n</ol>\r\nAl Tamimi &amp; Company’s Litigation team together with the Property team regularly advise clients on such tenancy dispute matters, including filing and managing cases before the RDC.'),
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(90059, 4900, 'content', 'April 2014\r\n\r\n<hr />\r\n\r\nOver the last few years, the IP practice of Al Tamimi &amp; Company has played a key role to lead such initiatives and has built bridges between brand owners and local officials working in anti-counterfeiting duties. This strategy appears to be very effective as a means to:\r\n<ol>\r\n 	<li>Increase the level of awareness of protected trademarks and equip officials with basic knowledge to distinguish genuine products;</li>\r\n 	<li>Enhance the inspection skills of law enforcement officers and capability to distinguish counterfeited/infringing goods; and</li>\r\n 	<li>Most importantly, assist brand owners to exchange ideas, discuss the obstacles they face and voice their commercial concerns to governmental decision makers.</li>\r\n</ol>\r\nIn return, officials have become more skilled to address counterfeiting and improve the administrative enforcement procedures and formalities. In this instance, we emphasise the recent progress made in cooperation with officials and we anticipate that there will be promising developments in the regulations, level of seizures and efficiency of procedures that IP enforcement officials are willing to implement and adopt.\r\n\r\nIn March 2014, a number of our clients and brand owners based in Europe, in coordination with Al Tamimi &amp; Company, hosted a delegation of officials from the Sharjah Economic Development Department (SEDD), who participated in a program educating them on anti-illicit procedures and training them in respect of products’ identities and manufacturing standards.  The delegates from the Commercial Compliance and Control Department at SEDD, who oversee anti-counterfeiting actions within Sharjah, were able to receive practical training to empower their products analytical skills. Furthermore, delegates were able to visit factories and speak directly to the management of brand owners about the IP enforcement and commercial protection formalities and learn about the brand owners’ priorities and issues in local the market. On the other hand, brand owners had the opportunity to convey technical knowledge which will assist officials to be familiar with elements of genuine products, exchange their business risks and highlight the commercial challenges that result from illicit trade activities in the Middle East region. In addition, officials were also able to briefly hear about enforcement experiences in other countries and consider proposals to improve the procedures of fighting the counterfeiting trade.\r\n\r\nThe Dubai Customs and its IPR department is another good example of direct dialogue with brand owners. This is evident in several visits made between senior officials to brand owners’ factories and offices overseas to exchange knowledge and experiences. The IP department of Dubai Customs had imposed a requirement on IP attorneys to include information about the brand owner’s contact details while completing the recording process of all trademarks. This enables direct interaction between brand owners and officials for the benefits of improving knowledge, awareness and brand protection.\r\n\r\nThis new strategy of interacting with the private sector was recently led by His Highness Sheikh Mohammed Bin Rashid Al Maktoum, UAE Vice President, Prime Minister and Ruler of Dubai, when he urged decision makers and governmental departments to closely interact with the public and private sectors while setting up future plans and goals. His Highness gave a great example of transparency and inspired officials and governmental officers to be more involved with the public and companies, in order to maintain open communication, the sharing of ideas and to consider creative ideas to overcome obstacles at the brainstorming stage in planning for the upcoming year’s goals and priorities.\r\n\r\nWe urge all IP owners to consider such initiatives and take further steps to closely interact with officials at all levels of law enforcement agencies and governmental departments, to clearly share their objectives and challenges while protecting or enforcing their Intellectual property rights in the UAE.\r\n<div></div>'),
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(90082, 4901, 'content', 'April 2014\r\n\r\n<hr />\r\n\r\n‘Is this invention valuable to my business?’  If the answer is ‘Yes’, then they should consider seeking patent protection to protect their rights.\r\n\r\n<strong>What can be patented</strong>\r\n\r\nEngineers and scientists have been lodging patents around the world to protect the value of their inventions for hundreds of years.\r\n\r\nCompanies and individuals can seek patent protection in the Kingdom of Saudi Arabia by either filing a national Saudi patent application or by filing a GCC patent application. The later route is a cost efficient vehicle for seeking protection in all Gulf Cooperation Council member states. Patent protection can be sought for “novel” and “inventive” technologies including construction systems, manufacturing processes, machines and manufactured products. An improvement to an existing technology may also be an invention that can be protected by a patent if the improvement is also novel and inventive (and not obvious to a technician in that field).\r\n\r\nSometimes a design may specify the intent to be achieved but may leave the detailed methodology up to the building contractor, or through cost engineering a contractor may devise a cheaper or quicker method of constructing, which if novel and inventive, may qualify for patent protection under the law.\r\n\r\nSome examples of inventions in the construction sector include:\r\n<ul>\r\n 	<li>creating a new method for affixing or erecting scaffolding or formwork;</li>\r\n 	<li>devising a new system for installing glazing, or for laying railway sleepers;</li>\r\n 	<li>a new type of pre-cast mould or curing method; or</li>\r\n 	<li>improving an existing method to reduce materials handling or installation time.</li>\r\n</ul>\r\n<strong>Advantages of a patent</strong>\r\n\r\nRegistering a patent for an invention means that:\r\n<ul>\r\n 	<li>you have a legal monopoly for 20 years to exploit the invention in the territory registered;</li>\r\n 	<li>when pitching for new jobs, you can tell employers about the registered patent and its benefits - this may give you a competitive leverage over other contractors especially if this patent would allow you to execute the work in a more secure or cost efficient manner;</li>\r\n 	<li>future work may be secured when your patent is used on a multi-staged project, or when a principal wants to use your patent on another job in the future;</li>\r\n 	<li>holding a patent portfolio may increase your reputation and can be marketed to new clients as it gives a competitive edge over others; and</li>\r\n 	<li>competitors are legally prevented from using your patented technology without your consent (which may include paying you a fee) and you are entitled to seek damages (which may be substantial) if your patent is infringed.</li>\r\n</ul>\r\nAny exploitation or use of the patented technology by a third party without authorisation from the patent owner is considered an act of patent infringement and is prohibited under law.  Infringers can be subject to penal orders and civil liabilities, including compensation for any resulting loss of profits.\r\n\r\nLicenses granted to third parties in return for royalties can be exclusive or non-exclusive and can be limited in time, scope and territory according to the negotiations between the parties. The patented invention can also be assigned or sold.\r\n\r\n<strong>Timeframes and territory</strong>\r\n\r\nTo seek patent protection for a new invention, it is essential to apply for patent protection before publicly disclosing or exploiting the technology anywhere in the world. A new invention must be kept secret until a formal patent application is prepared and filed with the relevant authorities as any public disclosure of the invention anywhere in the world before that date can seriously compromise the possibility of its protection.\r\n\r\nOnce filed, the patent office will examine the application to determine its patentability.  Once the patent application successfully passes the examination stage and is accepted, it is published in the official gazette for a period of 90 days before being granted.  The publication in the official gazette gives third parties the opportunity to oppose the grant of a patent.  If no oppositions are filed, a patent is granted at the expiry of the 90 day period.\r\n\r\nA granted patent is assumed valid for 20 years from the filing date, giving a monopoly period during which the patent owner has the exclusive right to exclude others from using the invention within the protected territory.\r\n\r\nPatents do not automatically have worldwide protection.  Patent law is territorial.  The protected territory is based on the jurisdiction where a patent application has been filed. For example, if a patent is registered through the patent office in KSA, the protected territory would be KSA only.  However for a GCC patent, the protected territory expands to all the GCC member states.  Applications for patent protection for other jurisdictions (including the USA, the EU, Australia or Japan) must be lodged separately in those other jurisdictions if protection is sought.\r\n\r\n<strong> Right of prior use</strong>\r\n\r\nThere are multiple defences that may be deployed in response to a patent infringement claim.  Attacking the validity of the patent is the most common.\r\n\r\nOther specific defences exist under law, such as the “prior use defence”, depending on the specific facts of each case.  To succeed in such a defence the defending party must prove that the use or exploitation of the invention commenced “in good faith” before the date the claimant applied for the patent. This may not be easy to prove, and relying on such a defence alone is no guarantee of protection. The alleged infringer must prove that it started to exploit the invention or made “serious arrangements” to do so before the priority date of the patent and if successful may seek an order to allow it to continue exploiting the invention but “without expanding it”. Essentially this contemplates that another designer or contractor independently made the same invention and started exploiting it, or had taken serious arrangements to exploit it, prior to the patent being lodged.\r\n\r\nA third party may also apply to court for a compulsory licence from the patent owner in some specific situations such as where the patent owner has not commercially exploited the patented technology within the territory for three years since the date of grant and has refused to grant the third party a licence to use the invention for a reasonable compensation.\r\n\r\n<strong>Contractual provisions</strong>\r\n\r\nSome standard-form construction contracts address patents in intellectual property clauses and associated definitions provisions. For example, under the FIDIC White Book (contract form for consultants’ services, 4th Edition 2006), the copyright, rights of the design, and other IP including patents expressly remain with the consultant.\r\n\r\nThese standard form contracts usually contain warranties from the consultant or contractor that it has the lawful right to use any IP, including patents, in carrying out the work. The contractor or consultant is usually required to indemnify the employer for any breaches of IP including for any unlawful use of patents.  The employer is usually granted a licence by the contractor or consultant to use the IP for the purpose of completing the works.\r\n\r\nEmployers are more frequently including their own amended IP clauses and in some cases require the contractor or consultant to assign its IP rights to the employer. An employer may be prepared to increase the contract price or may pay a separate fee to purchase a patent from the contractor. This is a matter for negotiation between the parties.\r\n\r\n<strong>Conclusion</strong>\r\n\r\nInnovations can be patented, making them a registered proprietary right protected by law. A patent may be used as a sword or as a shield depending on the circumstances and can provide you with an important competitive edge in your industry and in your negotiations.\r\n\r\nWhen your workers go to other jobs they may take your innovations with them.  A patent can protect your valuable innovation and prevent competitors from using it without your authorisation.\r\n\r\nIf your ingenuity and innovation is valuable to your business, you should consider registering a patent before your competitors start using your valuable invention or patent it themselves.'),
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(90111, 4902, 'content', 'April 2014\r\n\r\n<hr />\r\n\r\nHowever with Iraq trying to build its economy and its appeal to international trade, brand owners have become more vigilant and eager to protect their trademark rights in Iraq. In this article we will provide a summary of the legal options to enable the enforcement of trademark rights against counterfeits.\r\n\r\n<strong>The Law</strong>\r\n\r\nTrademarks are regulated under the Trademarks and Commercial Data Law (No. 21 of 1957), which was amended by Order No. 80 of 2004 issued by the Coalition Provisional Authority (“CPA”). Then it was further amended by Law No. 9 of 2010 (“the Trademarks Law”).\r\n\r\nThe protection provided by the Trademarks Law is for registered trademarks, as the Trademarks Law provides that the owner of a registered trademark shall have the exclusive right to prevent all third parties not having the owner’s consent from using identical or similar signs for goods or services which are identical or similar to those in respect of which the trademark is registered, where such use would result in a likelihood of confusion.\r\n\r\nAccordingly, the first step in setting a strategy for anti-counterfeiting activities in Iraq is to consider the registration of the trademark. During the recent war in Iraq, many brand owners dropped Iraq from their list of protection, which has now put some brand owners in trouble when trying to protect their trademark rights. This has led to  infringers trying to obtain registrations for trademarks that infringe other well-known trademarks so as to provide a legal cover for their actions.\r\n\r\nTrademarks are registered with the Trademarks Registration Office at the Ministry of Industry and Minerals in Baghdad.  However, in 2011 the Ministry of Trade and Industry in Kurdistan started its own registration system which covers Kurdistan Province.\r\n\r\nIt is therefore currently possible to register in both Baghdad and Kurdistan Offices for the protection of a trademark at the same time. The registration with Baghdad Office provides protection for the whole country, while the Kurdistan registration covers only the Province. While the registration process with the Baghdad Office has improved significantly over the past years and has become quicker, the registration still takes up to three years to be completed. In Kurdistan however, the registration process is quicker and registration can be achieved within a year or a year and a half.\r\n\r\nLegally speaking registration with the Baghdad Office is sufficient and enough for the purpose of protection. However, from an enforcement perspective, it is necessary to have registration in Kurdistan in order to take any legal action there; therefore, brand owners should consider Kurdistan registration if the counterfeit problem is in Kurdistan, rather than solely relying only on Baghdad registration.\r\n\r\n<strong>Options to stop counterfeits</strong>\r\n\r\nAfter registering the trademark in Iraq, the following are the legal options a brand owner may consider to stop counterfeit activities:\r\n<ol>\r\n 	<li>Border measures: Customs authorities in Iraq do not themselves have authority to seize counterfeit goods, and there is no system for the recording of trademarks with Customs. The only way Customs may take action to stop counterfeit goods from entering the country is based on a Court judgment or order.  Accordingly any action with Customs would mainly depend on information provided by the brand owner, followed by a Court action. In a recent case handled by our firm in Iraq, information received from the brand owner on a suspected counterfeit shipment entering the Kurdistan area enabled a criminal complaint to be filed directly with the relevant Court of Inquiry together with a petition for preliminary measures to seize the goods at Customs and prevent its entrance into the country. The order was granted, and the goods were seized at Customs pending the Court judgment.</li>\r\n 	<li>Preliminary measures: A brand owner can file an urgent petition for preliminary measures with the court or the Investigating Magistrate before or during a civil or criminal lawsuit, providing that it is accompanied by acceptable evidence on the registration of the trademark (which is usually a trademark registration certificate).  Through the preliminary measures, the brand owner may request seizure of the specific  instruments and tools used in the commission of the offence as well as the goods, wrapping materials, papers, hang tags, stickers, etc., which bear the mark of the subject matter of the offence Such an order can be issued without notification to the defendant if it was proved that the delay will cause irreparable damage to the brand owner or there is a risk evidence of the infringement will be lost.  If preliminary measures were obtained before filing a lawsuit, the brand owner shall initiate a lawsuit (whether civil or criminal) within 20 working days or 31 calendar days; otherwise, the measures taken will be revoked and the brand owner will be liable for compensation.</li>\r\n 	<li>Criminal action: the Trademarks Law penalizes counterfeit activities, and the following acts constitute a punishable crime:</li>\r\n</ol>\r\n<ul>\r\n 	<li>The counterfeiting of a registered trademark, or imitation of the same in such a manner as to mislead the public, or using a counterfeit or imitated mark with bad intent;The unlawful use of a registered trademark owned by another party;</li>\r\n 	<li>The placing, in bad faith, of a registered trademark owned by a third party on one’s products;</li>\r\n 	<li>Knowingly selling or offering for sale, or circulating or possessing for the purpose of sale, products which bear a counterfeited or an imitated trademark, or a trademark which is unlawfully affixed; or</li>\r\n 	<li>Intentionally offering or rendering services under a forged, imitated or unlawfully used mark.</li>\r\n</ul>\r\nAccordingly, it is possible to file a criminal lawsuit requesting the punishment of the infringer and the confiscation and destruction of the counterfeit goods.\r\n\r\nCriminal complaints are usually filed to the Court of Inquiry, which orders a raid to be conducted by the police, after which an investigation is started. If there is sufficient evidence of a crime, the matter will be transferred to the Court of Misdemeanors to issue judgment.\r\n\r\nThe most important element for a successful criminal complaint is to prove the knowledge of the infringer that the goods he is dealing with are counterfeit. The Trademarks Law requires  knowledge or bad intention in order for a crime to be committed. This means it is necessary to send legal notices to the infringers before initiating the complaint, so that knowledge can be proved.\r\n\r\nThe penalties provided by the Trademarks Law is a jail term of between one and five years, and/or a fine of between 50,000,000 Dinars (USD 42,948) and 100,000,000 Dinars (USD 85,839). In cases of repeated infringements, the punishment will be imprisonment for a period of between 5 and 10 years and/or a fine of between 100,000,000 Dinars (USD 85,839) and 200,000,000 Dinars (USD 171,675) in addition to the closure of the commercial store or enterprise for a period of not less than fifteen days and not exceeding six months, together with the publication of the judgment at the expense of the infringer.\r\n\r\n4. Civil action: the brand owner may file a civil case for compensation before the competent Court, supported by sufficient evidence of the trademark infringement and damages incurred. Compensation awarded by the Court  shall be adequate to compensate for the injury the trademark owner has suffered as a result of the infringement. In addition, brand owners may recover the profits of the infringer that are attributable to the infringement. This is in addition to the confiscation and destruction of the counterfeit goods.\r\n\r\nIn conclusion, the Iraq Trademarks Law provides for different legal actions against counterfeit and it is the brand owner’s decision to choose the best options depending on the nature of the infringement. However, it is always recommended to set a strategy for anti-counterfeiting activities that should start with obtaining the proper trademark protection, sending legal notices to the targets and then filing the proper lawsuit.'),
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(90130, 4903, 'content', 'April 2014\r\n\r\n<hr />\r\n\r\nYou need to consider the registration aspects of your trade mark in China.\r\n\r\nChina wears the crown of being the factory to the world. A staggering volume of the products on the world market today are made in China. From basic home appliances to the highest end luxury goods, China is often the source of such products.\r\n\r\nThe OEM (Original Equipment Manufacturer) business is massive in China. Arguably, it is the backbone of Chinese industry insofar as Foreign Direct Investment is concerned and is largely the driver of the Chinese manufacturing economy in its early years of leaping forward to its current position as the world’s second largest economy.\r\n\r\n<strong>What’s OEM?</strong>\r\n\r\nThe classic OEM model is where a foreign trade mark proprietor authorizes a local Chinese manufacturer to manufacture products under the foreign trade mark proprietor’s trade mark.\r\n\r\nThe issue for Middle East and other foreign businesses which have an export manufacturing base in China is whether OEM constitutes trade mark infringement in China.\r\n\r\nWhile such businesses would have trade mark protection in the countries where sales of their products are made, they often neglect to consider trade mark protection in China thinking that it is only a manufacturing base, where products are shipped out upon manufacture.\r\n\r\nThis could prove to be a costly error.\r\n\r\n<strong>Issues</strong>\r\n\r\nThere are broadly two issues to consider:\r\n<ul>\r\n 	<li>Could the local manufacture in China be a trade mark infringement?</li>\r\n 	<li>How do you mitigate the risk of your trade mark being hijacked by your local Chinese OEM or third parties in China?</li>\r\n</ul>\r\n<strong>Trade Mark Infringement</strong>\r\n\r\nWhether it is trade mark infringement by an OEM if the goods manufactured in China are only offered for sale in overseas markets is a murky area of law. In one case the Shenzhen Intermediate People’s Court found that the manufacture of clothing bearing the NIKE trade mark for overseas markets by a local Chinese manufacturer at the behest of its Spanish principal was found to be an infringement of Nike, the USA company’s trade mark.\r\n\r\nThen again, there have been a number of recent court cases whereby the reverse position was found. In Shanghai Shenda Audio Co. Limited v. Jolida Electronics (Shanghai) Co. Limited, the court held that there was no infringement even though the goods were manufactured in China given that they were clearly intended for the USA market and the goods were never meant to see the light of day in the Chinese market.  No Chinese consumer would ever be misled as to the origin of the goods and, therefore, there was no infringement. Similarly, in a case involving the well known CROCODILE trade mark where the Chinese factory manufactured products destined for the Korean market where the trade mark was registered in Korea by the OEM’s Singaporean licensor but not in China, the court found no infringement. Again, the court reasoned that given the CROCODILE marked products were not offered for sale in China, it was not possible for any confusion amongst Chinese consumers.\r\n\r\nAlas, there has yet to be any Supreme Court level judgment on this issue so the Chinese People’s Courts in the various localities have been free to arrive at conflicting conclusions.\r\n\r\nHence, the legal situation remains murky at this time and in order to avoid costly litigation, brand owners are generally advised to ensure that their trade marks are registered in China even though their only activity there may be via OEM manufacturing for products, which are ultimately destined for overseas markets.\r\n\r\n<strong>Misappropriation of Trade Mark </strong>\r\n\r\nThe use of OEMs can lead to difficulties. The OEM may try to set itself up as a competitor, or become a rogue OEM which manufactures counterfeit products after hours, perhaps even managing to register your trade mark in China. Sorry tales of such errant OEMs abound in the factory to the world, where OEMs seek greener pastures in making a greater buck quicker.\r\n\r\nInvalidation actions are possible to recover your trade mark but why suffer anxiety at the Chinese courts when you can be assured of certain trade mark rights upon registration of your mark. Be prudent and seek registration of your trade mark the moment you embark on OEM aspirations in harnessing the might of the Chinese manufacturing prowess to get your products to market in your ultimate export markets outside China.\r\n\r\nForeign brand owners are encouraged to register their trade marks lest they be hijacked by their OEMs or third parties even though their products are never intended for sale in China.\r\n\r\n<strong>The Bottom Line</strong>\r\n\r\nForeign trade mark owners would be prudent to secure trade mark registrations in China to ensure that their OEM manufacturing activities are not hindered by trade mark infringement claims. Such trade mark registrations would avoid costly recovery actions via litigation against rogue OEMs or third parties who might misappropriate your trade marks.\r\n\r\nAs part of Al Tamimi &amp; Company’s IP Department’s portfolio management services for brand owners, our intellectual property lawyers work with our international network of associates to routinely advise brand owners with manufacturing interests all over the world particularly in Asia including China by devising holistic programs for comprehensive protection of their trade marks.'),
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(90149, 4904, 'content', 'April 2014\r\n\r\n<hr />\r\n\r\nYet will this activity necessitate a new approach to anti-counterfeiting or will it be a case of ‘business as usual’?\r\n\r\nOur classic printers read information from digital documents and print the formatted text in ink, line by line, onto paper. A 3D printer interprets CAD, or computer aided design, files — similar to a blueprint. These blueprints allow the 3D printers to “print” by building objects up layer-by-layer out of plastic, metal or other materials. This method of manufacturing allows for the elimination of older techniques such as injection moulding.\r\n\r\n<strong>Opportunities</strong>\r\n\r\n3D printing has already proven capable of making sophisticated items including toys, fashion items, firearms, medical devices and even food – in January 2014, 3D Systems announced that it has entered into a multi-year joint development agreement with The Hershey Company, the largest producer of chocolate in North America, to explore and develop opportunities for using 3D printing technology to create edible foods. One of the major patents protecting a specific type of 3D printer expired in January 2014. Therefore, the cost of 3D printers has decreased steadily due to the expiration of such patents on the 3D printers themselves. The price today ranges anywhere from just under $1,000 to more than $3,000, which allows this technology to be more accessible to the everyday consumer.\r\n\r\nHowever the technology is developing quickly enough that brand owners should be aware of possible future dangers.\r\n\r\n<strong>Challenges</strong>\r\n\r\nThe main issue with 3D printing and copyright is in the potential for widespread personal manufacturing of copyrighted, trademarked or ornamental design objects, independent of established markets, in ways that cannot be detected, prevented, or controlled.\r\n\r\nCopyright is an unregistered right that automatically arises upon creation. In a nutshell, copyright protects original, artistic and non-useful works and applies to common subjects of 3D printing such as sculptural works or three-dimensional representations of protected two dimensional illustrations. To be copyrightable, an object must have a minimum of creativity original to the author. If this threshold is met, the work is thereby protected by copyright.\r\n\r\nCopyright infringement principles also apply to 3D printing just as they apply to any other copyrighted material. 3D printing is to three dimensional objects what MP3s and peer-to-peer sharing networks were to the music and movie industries. These technologies were used to copy and exchange digital property, most often illegally. Pursuing infringement claims against a service provider for illegal 3D printing violations, in light of the copyright laws, can prove difficult if the provider is complying with all the safe harbouring requirements.\r\n\r\nIf an individual/entity copies and distributes a 3D printed copy of a copyrighted object, the owner has the right to sue for copyright infringement. Therefore, it would be illegal for anyone to try to replicate copyrighted objects with their 3D printers, or post copyrightable CAD files or software online.\r\n\r\nAt the same time, the ability to print labels for consumable products does raise some areas of concern for both food and pharmaceutical sector companies. The potential for infringers to mass-produce products with the same external physical appearance as legitimate goods by way of 3D printing could result in a significant volume of counterfeit goods reaching the marketplace. This is particularly worrying when such products would be combined with potentially flawless imitation packaging, labelling and instructions for use, since the overall product could appear to the relevant consumer as identical to the genuine item.\r\n\r\nAn additional concern is that there is no way to control the ingredients counterfeiters would use to create the imitation product in question. As a result, rights holders may be faced with a scenario whereby goods that are externally identical to their own products are reaching the marketplace, but with either ineffective or potentially dangerous ingredients included which can create serious health hazards. Evidently, counterfeiting of consumable goods is not a new activity; nonetheless the availability of 3D printing technology potentially enables increased local production, easy accessibility – and a corresponding increase in the complexity of monitoring and regulating such activity.\r\n\r\nAnd finally, what better technology is there than 3D printing for design infringement? Designs can be easily replicated and allow copycats to come as close as possible to counterfeiting products not necessarily reproducing the copyrighted aspects or placing a trademark without authorization. Designs may only be protected if registered in the jurisdiction where it will be enforced. So much different from trademarks, which if unregistered but well known can still be enforced, or copyright which if not registered can still be enforced. Designs will have to be registered.\r\n\r\nFaced with the triple setback of a drop in profits, damage to the brand’s goodwill and danger to public health, rights-holders will need to consider how to combat infringement of this nature, and incorporate the monitoring of products created by 3D printing into their on-going anti-counterfeiting programs. In the same light that online auction sites made tracking the flow of counterfeit goods more complicated, the widespread ability to make fake goods will muddle efforts to trace supply chains.\r\n\r\n<strong>Conclusion</strong>\r\n\r\nThe evolution of 3D printing will require rights-holders to invest more in acquisition of intellectual property rights and widen the scope of protection, especially with respect to design rights. Registered designs have been a sought-after right only for a few industries but will shortly probably become an equally important right across all industries. As such, rights-holders should ensure that all products placed on the market are fully protected by way of trademark, industrial design and ensure a registered Copyright. This would include not just the brand name and related device elements, but also securing three-dimensional registered trademark protection for products which have distinctive character traits. Rights-holders are encouraged to consider securing registered design protection for the external appearance of the products themselves and their packaging where appropriate.\r\n\r\nA final consideration for rights-holders will be the risk faced by infringers obtaining the actual recipe for the item in question, and the mass production of the recipe by way of 3D printing. Although remedies exist by way of enforcing patents and rights in confidential information, such steps are reactive. This technological development emphasises the need for a proactive stance through increased vigilance in the marketplace.'),
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(90172, 4905, 'content', 'April 2014\r\n\r\n<hr />\r\n\r\nThe process and timeframe for the hearing of such claims varies, depending on number of factors. Below are the main aspects to consider when dealing with labour litigation in the Labour Court, particularly within Dubai, Sharjah and Abu Dhabi.\r\n\r\nAs a prerequisite, and in strict compliance with Article 6 of the Labour Law, all claimants must first file a complaint with the Ministry of Labour or the relevant free zone authority in which the claimant was employed. The Ministry/free zone authority will attempt to mediate between the parties to reach an amicable settlement on the disputed issues. In the event that no such settlement is possible, the Ministry/free zone authority is obliged to issue a ‘transfer letter’ to allow the matter to be filed and heard before the Labour Court. The claimant then has 6 months from the date of the ‘transfer letter’ to proceed with filing the claim with the Labour Court.\r\n\r\n<strong>Proceedings</strong>\r\n\r\nThe proceedings are conducted entirely in Arabic. Therefore, all documents submitted to support the claim or defence must be translated into Arabic by a translator approved by the Ministry of Justice.  Only lawyers who are UAE nationals (and a few other Arab nationalities) have rights of audience before the Labour Courts. However, parties (of any nationality, provided that they can liaise with the court in Arabic) may act in person should they wish, but this is limited to proceedings within the Court of First Instance.\r\n\r\nShould a party engage legal representatives, a power of attorney is required and will need to be filed with the Labour Court as soon as possible (and in any event before any submissions by the legal representatives can be filed with the Labour Court).\r\n\r\nThe Labour Court will progress the claim through a series of appointments at which the parties’ written submissions are submitted and future hearing dates are fixed. The period of time between each hearing is an adjournment, during which one or both parties are usually required to prepare submissions or arrange for the translation of documents to be submitted.\r\n\r\nSubmissions by both parties are made via written memoranda, akin to a pleading. The  claimant  initially  submits  their  memorandum  of  the  claim,  and  the  defendant thereafter submits their memorandum of the defence in reply.  Each party is then entitled to submit further memoranda in response to the other party’s prior memoranda and submitted documents. This exchange will continue until such time as the Labour Court is satisfied that all heads of claim have been sufficiently deliberated upon and a determination can be made. The claim will then be reserved for judgment.\r\n\r\nIn our experience and dependent upon the quantum of the claim, the Labour Court may also suggest that the parties settle the case at an earlier stage. This helps in filtering the court system claims of limited value and dispute, as well as providing the parties another opportunity to resolve the matter without further protraction.\r\n\r\n<strong>Evidence</strong>\r\n\r\nThe Labour Court (in common with the other Civil Courts in the UAE) will generally only accept written documentary evidence in support of a party’s memorandum. They do not accept written witness evidence in support of a party’s claim or defence. Where a party is unable to prove or defend a particular point, that party may request the judge to hear oral testimony from a witness. A judge has the absolute discretion to call a witness and where this discretion is exercised, only the judge may examine the witness and can ask any questions he deems appropriate.  There is no right by either party to examine or cross examine the witness.\r\n\r\nThere is no duty of full disclosure in the Labour Courts. Documents not supporting a party’s position need not be disclosed, unless the other party is aware of the existence of a specific document and makes an application to the Labour Courts for specific disclosure.\r\n\r\nIf  the  Labour Court  considers  that  an  issue  is  complicated  or  requires  detailed  review  (for example, the calculation of an annual bonus, pension rights, commissions etc), it may appoint an expert to investigate that particular aspect of a claim. The expert is chosen from a panel maintained by the Labour Courts and is provided with a remit and scope of instructions for the required investigation. The expert has wide investigative powers and can request documents and interview witnesses, as well as attend the employer’s offices to review any personnel files and documents relating to the claim. The expert prepares and submits a report of his findings. Both parties have the opportunity to comment on the report filed. However in most cases, the Labour Courts will adopt the expert’s conclusions in its judgment.\r\n\r\n<strong>Costs &amp; Judgments</strong>\r\n\r\nEach party is responsible for their own legal costs and disbursements, which are not recoverable by a winning party, with the exception of a small nominal amount awarded towards legal costs awarded to the winning party at the final hearing.\r\n\r\nA respondent employer is required to pay the Labour Court’s fees irrespective of the outcome of any claim, as the claimant employees are excused by Article 5 of the Labour Law from paying such fees.  Expert’s fees are also usually paid by the claimant, although the Labour Courts may require the parties to pay these fees jointly. Labour Court fees are between 5% and 7% of the total judgment award, subject to a minimum amount that depends on which court the claim has been brought before. Interest may also be awarded on any judgment amount, at the Labour Court’s discretion, and this can vary between 9% and 12%.\r\n\r\nA brief verbal summary of the judgment will be provided first, and the detailed written judgment is provided thereafter at a later date. This Court of First Instance judgment can be appealed by either party (within 30 days from the date of the oral summary of the judgment) to the Court of Appeal. The parties may further appeal the Court of Appeal decision to the Court of Cassation/Supreme Court within 60 days of the oral summary judgment. The judgment provided by the Cassation Court/Supreme Court will be considered as the final binding judgment on the matter.\r\n\r\n<strong>Conclusion</strong>\r\n\r\nAs a civil law jurisdiction, proceedings in the Labour Courts are heavily reliant on written submissions with minimal oral evidence. Accordingly, it is imperative that documentary evidence is collated and assessed carefully from the outset to be certain that a party’s account of the matter is fully evident and supported.\r\n\r\nA unique feature of the Labour Courts is that each party has the ability to amend and adapt their position as the claim progresses. A party is not bound by a previous position adopted in preceding memoranda provided that evidence can be submitted to support the position taken.'),
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(90178, 4905, 'pageSummary', 'Labour/employment claims in the UAE, including the free zones (except for those in the Dubai International Financial Centre) are governed by the UAE Labour Law No. 8 of 1980 (as amended) (the “Labour Law”) and are heard before the UAE Labour Courts (the “Labour Court”).'),
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(90182, 4905, 'lawUpdateArticleNoWriters_0_lawUpdateAuthorName', 'Poonam Nagi'),
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(90190, 4905, '_yoast_wpseo_metadesc', 'Labour/employment claims in the UAE, including the free zones (except for those in the Dubai International Financial Centre) are governed by the UAE Labour Law No. 8 of 1980 (as amended) (the “Labour Law”) and are heard before the UAE Labour Courts (the “Labour Court”).'),
(90191, 4906, 'content', 'April 2014\r\n\r\n<hr />\r\n\r\n<strong>Background</strong>\r\n\r\nThe formation of the zone is part of the 2030 Economic Policy that focuses on areas in which Abu Dhabi has a competitive edge, such as real estate, tourism, basic industries, logistics, energy and media.\r\n\r\nThe ADGM is the fifth free zone in Abu Dhabi, following Khalifa Industrial Zone Abu Dhabi (KIZAD), twofour54, Masdar and Abu Dhabi Airport Free Zone. It aims to encourage more foreign direct investment and foreign businesses into the region, and is a positive step for investors who have previously expressed their preference for 100% ownership. Free zone companies will be permitted to establish operations without a local partner and will be able to repatriate their profits and capital. Additionally, it also offers the attraction of being a tax free environment. The establishment of the ADGM will also bridge the international time difference between Europe and the Far East.\r\n\r\nSince the date of the Original Decree, further regulations and cabinet decisions have been announced, shedding more context on the legal and financial framework governing the ADGM.\r\n\r\n<strong>Areas of Interest</strong>\r\n\r\nThe ADGM is anticipated to capitalize on $1 trillion in financial assets, managed by Abu Dhabi’s institutional investors and financial institutions. Firms operating in the ADGM are expected to engage in commodities trading, derivatives trading, settlement, clearing and depositary services, together with foreign exchange and wealth management. More specifically, companies licensed within the ADGM may practice the following activities (it being noted that the list is not exhaustive):\r\n<ul>\r\n 	<li>Financial and banking activities and services</li>\r\n 	<li>Business investments, commercial banking, investment banking and private finance companies</li>\r\n 	<li>Commodities, currencies and securities trading</li>\r\n 	<li>Storage, treatment and delivery of goods and metals of all kinds (including those which are represented via ownership certificates or physical delivery)</li>\r\n 	<li>Financial and cash brokerage</li>\r\n 	<li>Islamic finance and Islamic banking activities</li>\r\n 	<li>Custodianship activities</li>\r\n 	<li>Buying and selling of stocks, bonds, sukuk and derivates</li>\r\n 	<li>Insurance and reinsurance</li>\r\n 	<li>Financial advisory services</li>\r\n 	<li>Accounting and auditing services</li>\r\n 	<li>Credit rating and information services</li>\r\n</ul>\r\n<strong>Framework</strong>\r\n\r\nIt is now confirmed that ADGM is to be exempt from the application of UAE Federal Law and the specific laws applicable in Abu Dhabi on civil and commercial matters. It is to have its own judicial system and legislative infrastructure, and has been granted the authority to self-legislate and self-regulate. ADGM will be governed by a Board of Directors, which will have extensive powers to manage and govern ADGM as well as to issue the laws, rules and regulations relating to the ADGM.\r\n\r\nThree separate authorities, all of which are to be independent of each other, will be established to implement the objectives of the ADGM, the formation of which is already underway and is anticipated to be rolled out in the near future.\r\n\r\nFirst is the ADGM’s Registration Bureau which shall be primarily responsible for the licensing and registration of all companies, branches and representative offices established or that shall be established in the ADGM. Second, the Financial Services Regulations Bureau, which will be responsible for the regulation of financial services within the ADGM, with a supervisory focus on entities carrying on regulated financial services and related financial activities within the ADGM\r\n\r\nFinally, a two tier court system will also be established, comprising the Court of First Instance and the Court of Appeal. As at the date of publication, it is yet unknown whether the laws of the ADGM will be fashioned after English law, which is the preferred choice of law for most international financial transactions. However, it is expected that the laws will be in compliance with established international best practices.\r\n\r\n<strong>What We Can Expect</strong>\r\n\r\nThere are large scale plans that Al Maryah Island will eventually offer residences for 30,000 people, and will in addition accommodate 75,000 working professionals.\r\n\r\nSince the date of the Original Decree, several local banks and other entities have moved their offices to Sowwah Square, which is intended to be the hub of the ADGM, and a few international financial institutions have also opened offices within the district. Two of the four main business towers are almost at full occupancy.  In addition to these, service providers such as The Galleria (a high-end mall) and Rosewood Hotel have since commenced operations to cater to the needs of free zone residents. Cleveland Clinic is also expected to be operational in the near future while construction works on other office spaces and hotels have commenced.\r\n\r\nThough the eventual success of ADGM as a financial hub and competitor to the other financial free zones in the GCC region remains to be seen, the general sentiment is one of optimism.\r\n\r\nWhile no dates have formally been announced, an official launch of the ADGM is expected in a matter of weeks.'),
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(90195, 4906, 'content_description', 'Following the issuance of Federal Decree No. 15 of 2013 (“Original Decree”), which was signed by HH Sheikh Khalifa bin Zayed Al Nahyan in February last year, the Abu Dhabi Global Market (“ADGM”) was established as a financial free zone in Abu Dhabi, located in Al Maryah Island. '),
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(90197, 4906, 'pageSummary', 'Following the issuance of Federal Decree No. 15 of 2013 (“Original Decree”), which was signed by HH Sheikh Khalifa bin Zayed Al Nahyan in February last year, the Abu Dhabi Global Market (“ADGM”) was established as a financial free zone in Abu Dhabi, located in Al Maryah Island.'),
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(90213, 4906, '_yoast_wpseo_metadesc', 'Following the issuance of Federal Decree No. 15 of 2013 (“Original Decree”), which was signed by HH Sheikh Khalifa bin Zayed Al Nahyan in February last year, the Abu Dhabi Global Market (“ADGM”) was established as a financial free zone in Abu Dhabi, located in Al Maryah Island.'),
(90214, 4907, 'content', 'April 2014\r\n\r\n<hr />\r\n\r\nArticle one in the series (published in February 2014) summarised the legal framework governing consumer protection and products, and article two (published in March 2014) examined the issues arising from ‘fake’ goods on the market.\r\n\r\nThis article will examine the consequences of non-compliance with safety standards, penalties and sanctions, and the current regulatory approach to enforcement.\r\n\r\n<strong>The Regulators</strong>\r\n\r\nConsumer protection is regulated by the Ministry of Economy (“MOE”), which has delegated certain functions to the Consumer Protection Department. The safety and quality of products (whether produced in the UAE or imported) is regulated by the Emirates Authority for Standardisation and Metrology (“ESMA”).  The MOE and ESMA are assisted at local level in each Emirate by other bodies afforded a coordinating role in ensuring that safety standards are met.  In Abu Dhabi, that role is performed by the Abu Dhabi Quality and Conformity Council (“ADQCC”), and in Dubai is performed by the consumer department of the Dubai Municipality.\r\n\r\n<strong>Sanctions: penalties and recalls – the Law</strong>\r\n\r\nUAE consumer law prescribes penalties for breach. The primary sanction is a fine of between AED 10,000 and AED 1,000,000 for a wide range of offences, including:\r\n<ul>\r\n 	<li>Displaying, offering, promoting or advertising any goods or services which may inflict damage on the consumer in the course of ordinary usage;</li>\r\n 	<li>Labeling the product other than in compliance with legal requirements,</li>\r\n 	<li>Failing to provide appropriate warnings to consumers as to the risks associated with the product;</li>\r\n 	<li>Failing to comply with approved standard specifications; and</li>\r\n 	<li>Artificially creating market conditions which control market price and forces an increase in the price of products.</li>\r\n</ul>\r\nIn circumstances where a product is proven to be defective and could harm a consumer, the product may be recalled from the market. UAE consumer law specifies that in the majority of cases the recall will be led by the supplier, who is under a duty upon discovering the defect to inform the Consumer Protection Department.\r\n\r\nThe definition of ‘supplier’ under the Consumer Protection Regulations No. 12 of 2007 is wide and includes “a natural or legal person that provides the service or information or manufactures, distributes, trades, sells, imports or exports the commodity or interferes in the manufacturing or trading thereof”.\r\n\r\nThe definition of “defect” is also wide, and includes faults in the “designing, processing or manufacturing of any goods, its non-suitability, deformation or damage before, during or as a result of use, or due to the non-conformity or non-compliance sufficiently with the Approved Standards Specifications, the warranty, or specifications declared or to be declared by the provider; or any acknowledgement or advertisement relating to or posted on the goods”.\r\n<ul>\r\n 	<li>The supplier must recall a defective product from the market in the following circumstances:</li>\r\n 	<li>The discovery of a defect in the product;</li>\r\n 	<li>The existence of reports or studies proving the existence of a defect in the product;</li>\r\n 	<li>The receipt of complaints sent by consumers regarding the existence of a defect in the product;</li>\r\n 	<li>The issue of a recall notice from the regulator;</li>\r\n 	<li>The existence of recovery operations of the same product abroad; and</li>\r\n 	<li>The proof of the noncompliance of the product with adopted standards.</li>\r\n 	<li>The intent behind the law is to require a recall in a situation where there is a fault that affects the safety of those using the product, and where it is reasonably likely to affect all or a material proportion of the products available on the market.</li>\r\n</ul>\r\nWhere the defect in a product is such that the health and safety of consumers is not a material concern, it would be appropriate and reasonable to consider the nature and extent of the defect. A defect which would not affect the safety or performance of a product and which is unnoticeable may not justify a recall procedure. Each case should be considered on its facts.\r\n\r\nIn circumstances where a defect is proven to be isolated, and can be reasonably expected to be a result of chance, it would arguably be unreasonable for the entire product line to be recalled even though this type of fault would be classified as a “defect”.\r\n\r\nThe regulator may institute recall procedures immediately where the safety of the consumer is compromised. However, such powers will only be exercised in circumstances where the supplier has failed (or refused) to recall the product themselves.\r\n\r\n<strong>Breach of compliance:  law – v - practice</strong>\r\n\r\nUAE consumer law specifies that it is the MOE which has the power to recall a product.  In practice, it is the local coordinating bodies, such as ADQCC or Dubai Municipality (with assistance from ESMA) which investigates compliance breaches and coordinates between suppliers and the MOH to organise a product recall.\r\n\r\nADQCC and Dubai Municipality have the power to take samples of products and arrange for them to be tested against the applicable standards set by ESMA. When a breach is discovered, the supplier is notified and given an opportunity to undertake their own investigations, and where agreed, may obtain their own test report. Depending on the outcome of further testing, additional reports may be commissioned by the regulator and a decision is then made as to whether the defect merits a recall. If that is the case, as neither ADQCC nor Dubai Municipality have the necessary enforcement powers, the MOE is asked to authorise the recall based upon the available evidence. The MOE usually accepts the recommendations of ADQCC or Dubai Municipality that a product should be recalled, unless the supplier successfully negotiates an alternative solution.\r\n\r\nThe incidence of product recalls in the UAE is on the increase. As ESMA continues to set applicable standards for a wider range of products, the opportunity for investigation and testing increases, and once a prima facie case of non-compliance is established, the regulators are under a duty to act in the interests of consumer safety. Both Dubai Municipality and ADQCC have been active in recalling products from the market, and of course, once one Emirate has ordered a recall, it is almost inevitable that the supplier will be required to recall the product in neighboring Emirates. ADQCC have recalled thousands of products since its establishment in 2009, primarily following testing which proved that the product did not comply with standards set by ESMA.  Recently recalled items include an array of electrical appliances (where there are obvious safety concerns), including juicers, blenders, rice cookers and deep-fat fryers.\r\n\r\n<strong>Advice for suppliers</strong>\r\n\r\nA supplier should always cooperate with a regulatory investigation. ADQCC, for example, has power to fine a supplier a sum of at least AED 7,000 for failure to cooperate, and can request that the court imposes a sentence of imprisonment of not less than three months. The regulatory investigation stage is the period in which the supplier has an opportunity to make its own case, and defend any assertion that their product is defective and merits a recall. Negotiations entered into at this stage must be handled carefully if the supplier is to avoid a significant penalty or any damage to brand caused by a recall. A supplier under investigation should instruct their lawyer at the earliest opportunity for advice as to how they should proceed.\r\n\r\nThe Regulatory Practice Group is experienced in advising on product compliance and negotiating with regulators with regard to breach of compliance. For any enquiries, please contact Andrea Tithecott, Senior Associate, and lead regulatory lawyer.'),
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(90237, 4908, 'content', 'April 2014\r\n\r\n<hr />\r\n\r\nOn 20 January 2014, Qatar Law No.2 of 2014 was passed in order to amend certain provisions of the Engineering Law and the same came into force on 16 March 2014.\r\n\r\n<strong>Overview of Engineering Law rules</strong>\r\n\r\nPursuant to Article 7 of the Engineering Law, no engineer may practice without enrolment in the “Register of Engineers” and no engineering consultancy may be undertaken without enrolment in the “Register of Local Engineering Consultancy Offices” or “Register of International Engineering Consultancy Offices”.\r\n\r\nEnrolment in these three registers is considered as a licence to practice in the field of engineering.\r\n\r\n<strong>Amendments Introduced by Law No. 2 of 2014</strong>\r\n\r\n1. Members of Enrolment Committee\r\n\r\nLaw No. 2 of 2014 provides that the Committee approving the enrolment of engineers and engineering consultancy offices (the “ Committee”) shall now be constituted by representatives of each of the Ministry of Municipality and Urban Planning; Ministry of Interior (General Directorate of Civil Defence); Ministry of Energy and Industry; Ministry of Communication and Information Technology; Qatar Petroleum; Qatar General Electricity and Water Corporation; Public Works Authority; Qatar University and the Engineering Consultancy Office.\r\n\r\n2. Renewal and Expiry of Registrations\r\n\r\nLaw No.2 of 2014 provides that the period of enrolment in the Register of Engineers shall be three years, and the period of enrolment in the Registers of Local Engineering Consultancy Offices and International Engineering Consultancy Offices shall be two years.\r\n\r\nAny enrolment must be renewed within thirty days after expiry of existing enrolment.\r\n\r\nWhere no renewal has occurred within the specified period above, this will result in a fine of QAR 1,000 being imposed on the engineer and a fine of QAR 10,000 being imposed on the Engineering Consultancy Offices for each month of delay up to a period of three months. After expiry of that three month period the Committee is then empowered to delete the name from the Register. Such a decision will be notified to the violator after which re-enrolment may not take place until the fees for a new enrolment and the existing fines are paid in full.\r\n\r\n3. Restrictions imposed over civil servants\r\n\r\nThe proprietors of Engineering Consultancy Offices and the engineers working in them are prohibited from working in any ministry, public authority and or other governmental institution.\r\n\r\nLaw No. 2 of 2014 has exempted Qatari nationals teaching engineering profession in any university from this restriction provided they are PHD holders\r\n\r\n4. Disciplinary Penalties\r\n\r\n4.1 Disciplinary penalties which may be imposed on a violating\r\nengineer are:\r\n<ul>\r\n 	<li>A formal warning.</li>\r\n 	<li>Suspension of practising for a period not exceeding one year and a fine of not exceeding QAR 10,000 or one of these two penalties.</li>\r\n 	<li>Deleting the name from the Register of Engineers.</li>\r\n</ul>\r\n4.2 The disciplinary penalties which may be imposed on the violating Local or International Engineering ConsultancyOffices are:\r\n<ul>\r\n 	<li>A formal warning.</li>\r\n 	<li>Suspension of practicing for a period not exceeding one year and a fine not exceeding QAR 100,000.00 or one of these two penalties.</li>\r\n 	<li>Deleting the office from the Register of Local or International Engineering Consultancy Offices</li>\r\n</ul>\r\n5. Exemptions from the provisions of the Engineering Law\r\n\r\nThe provisions of the Engineering Law shall no longer apply to the following categories:\r\n<ul>\r\n 	<li>Engineers and Engineering Consultancy Offices to whom the State temporarily entrusts engineering works of special technical nature required by public interest under a special agreement specifying the nature of the work and the time required to perform the same.  However, a formal exemption needs to be obtained  from the Minister of Municipality and Urban Planning, provided that the period for exemption does not exceed the period for performing the agreed works; and</li>\r\n 	<li>Engineers working in ministries, authorities and public institutions in pursuance of their role as governmental employees.</li>\r\n</ul>\r\n<strong>No Significant changes</strong>\r\n\r\nAlthough engineering practitioners were expecting substantive changes to the Engineering Law in relation to the registration process, the new Law No. 2 of 2014 does not bring any significant changes in this regard.'),
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(90256, 4909, 'content', 'April 2014\r\n\r\n<hr />\r\n\r\nIn entering into these contracts the description of the parties would, in relation to the company, include the statement “under formation” after the name of the company.\r\n\r\nHowever if the company only exists once it has been registered in the relevant official register, then what is the status of contracts purportedly entered into by a company “under formation”?\r\n\r\n<strong>The Law</strong>\r\n\r\nIn order to establish what under UAE law the status of a contract signed by (or on behalf of) a company that is yet to exist is, reference must be made to the relevant legislation.\r\n\r\nIn the case of companies formed under the Commercial Companies Law No.8 of 1984, Article 11 of the 1984 Law provides that ‘with the exception of a joint participation, a company memorandum and any amendment thereto has to be registered in the Commercial Register’.  Further, Article 12 of the 1984 Law states that “…a company shall not have a corporate personality and shall not be allowed to perform its business unless it is registered in the commercial register…..” and goes on to state that “All business and transactions performed on behalf of the company by individuals before its registration shall result in their joint liability”.\r\n\r\nThis concept is further confirmed in the context of public joint stock companies by Article 72 of the 1984 Law, which provides that ‘during the incorporation period, the company will have the corporate personality to the extent necessary for its incorporation.  During this period, the Company will be bound by the actions of the founder members, provided that its incorporation is completed in accordance with the Law’, and in the case of limited liability companies by Article 225 of the 1984 Law which provides that ‘the company may not practice any of its activities except after registration in the Commercial Register’.\r\n\r\nThe above provisions logically suggest that in order for a company to undertake business, and more specifically to incur liabilities and obligations to third parties by entering into contracts and agreements, it must first exist and it is only capable of demonstrating that it does so exist by virtue of appropriate registration. Of course, one of the prime benefits of undertaking business through a limited liability company is the protection offered to the shareholders against exposure to the liabilities of the company itself. However it seems clear from the above provisions that individuals who enter into contracts for and on behalf of a company before its incorporation will be personally liable under that contract.\r\n\r\n<strong>Extent of Personal Liability</strong>\r\n\r\nAre there any circumstances where individuals may be protected from such personal liability before the company is established? What is the status of the contract purportedly entered into by a company prior to its registration once that company is established?\r\n\r\nThe last section of Article 12 of the 1984 Law states ‘However, during the incorporation period, the company shall have a corporate personality up to the extent required for its incorporation’.\r\n\r\nIn our view Article 12 means that a company can be said to have a corporate existence for purposes such as opening a bank account or entering into a lease, which is required as part of the incorporation process. The company will be described in any contracts entered into during this stage as “XYZ LLC (under formation)”.\r\n\r\nBut what does this really mean? Individuals who sign on behalf of a company that has yet to be registered, i.e. on behalf of a company ‘under formation’, will be personally liable.  With regard to any such contracts that are entered into as part of the formation process, in our view the courts would interpret the effect (and benefit) of Article 12 to mean that that as soon as the company is incorporated it will be automatically bound to such contracts in place of those individual signatories and it is at this point that the personal liability of the individual signatory falls away.\r\n\r\nOf course, if the Company was not subsequently registered then any individual signing for and on behalf of that company ‘under formation’ would remain personally liable. Signatories should be aware of this risk as it is not uncommon for individuals who are to be employed by the company after its incorporation (i.e. prospective managers) to sign such contracts without regard for the potential liability attaching to their signature.\r\n\r\nHowever, with regard to contracts other than those required in connection with a company’s formation that may be signed by individuals for and on behalf of a company ”under formation” it is certainly arguable that upon the formation of the company these contracts will not automatically be binding on the company in place of the individual signatories.  This is due to there being no reference in the 1984 Law to a “pre-incorporation” company having any form of corporate personality in the context of any such arrangements. Rather, in our view, there is certainly a risk that the individual signatories may be found to remain personally liable under such arrangements even after the company has been incorporated.\r\n\r\nIf, notwithstanding this risk, individuals do decide to enter into pre-incorporation contracts other than those required in connection with a company’s formation then we would certainly advise that following the company’s formation the company, the individuals who signed for and on behalf of the company and the other party to that contract enter into some form of written acknowledgement that the company itself is bound in place of those individuals who signed for and on behalf of the company prior to its incorporation, i.e. effectively an assignment agreement (or novation agreement in common law terms).\r\n\r\nEven if such a written acknowledgement was not entered into it may be arguable from the parties’ subsequent conduct that the individual signatories who signed on the part of the company prior to its formation are no longer personally liable and that the other party has accepted that the company is now the relevant party that is bound by the terms of the contract. An example may be where the other party continues to deal with the company on the terms of the pre-incorporation contract.\r\n\r\n<strong>Free Zone Companies </strong>\r\n\r\nIn respect of regulations governing corporate entities in Free Zones in the UAE, the 1984 Law will apply unless the relevant regulations implemented in the Free Zone specifically deal with issues otherwise covered by the 1984 Law.  Generally though, the regulations in Free Zones take a similar approach to the 1984 Law when providing for pre-incorporation contracts.\r\n\r\nBy way of example, Article 8 of the Dubai Silicon Oasis Implementing Regulations 1/2006 provides that:\r\n\r\n‘a Free Zone Company “Limited Liability” shall be deemed to have been duly formed with effect from the date of registration thereof in the FZCO Register. Each such Free Zone Company shall then be capable of exercising all the functions of a Free Zone Company but with such liability on the part of its shareholder to contribute to its assets …’.\r\n\r\nAgain in our view this means that a person purportedly signing a contract for and on behalf of a company prior to its registration with the Dubai Silicon Oasis Authority will be personally liable and there is a risk that such personal liability may be found to continue even following the subsequent registration of that company. However, with regard to contracts that are required to be entered into prior to the company’s incorporation as part of its incorporation procedure, in our opinion, the concept set out in the 1984 Law dealing with these types of contracts will not be seen as being an issue that is specifically contemplated by the free zone’s regulations and hence the 1984 Law will have application in addition to the free zone’s regulations.  As such the analysis set out above in the context of onshore companies will be equally applicable to Dubai Silicon Oasis (and indeed many other free zone) companies.\r\n\r\n<strong>Conclusion</strong>\r\n\r\nWhilst there is a reference in the 1984 Law to companies having a “limited” corporate existence prior to their incorporation, any individuals signing on behalf of any company prior to its incorporation should be mindful of the personal liability that he or she will be exposed to by doing so, not just up to the point of incorporation of the company but also potentially, depending on the type of contract, after the incorporation of the company.'),
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(89408, 4864, 'content', 'February 2014\r\n\r\n<hr />\r\n\r\nThe amended Regulations effectively relaxed some of the restrictions on the activities of the two types of entities governed by these regulations – the ‘special purpose company’ and the ‘holding company’ - and would be of interest to companies that are considering setting up such entities in Qatar, regardless of the location of the other companies in their group.\r\n\r\n<strong>Special Purpose Companies</strong>\r\n\r\nSpecial purpose companies may only be incorporated in the QFC for the purpose of a ‘Transaction’ and are permitted to carry out the following activities:\r\n<ol>\r\n 	<li>the acquisition, holding and disposal of any asset in connection with and for the purpose of a Transaction;</li>\r\n 	<li>the obtaining of any type of financing, the granting of any type of security interest over its assets, the providing of any indemnity or similar support for the benefit of its shareholders or the entering into any type of hedging arrangements, in connection with and for the purpose of a Transaction;</li>\r\n 	<li>financing of the entity for which Transaction the special purpose company has been established (such entity being referred to as the “Initiator”) or another special purpose company;</li>\r\n 	<li>acting as trust administrator or agent for any participant in a Transaction;</li>\r\n 	<li>any other activity approved by the QFCA that falls within the ‘Permitted Activities’ identified in paragraphs 10 to 15 of Schedule 3 to the QFC Law (e.g. the provision of professional services or the business activities of company headquarters, management offices and treasury operations), or qualifies as an exemption under Schedule 3 to the Financial Services Regulations (financial-type services which fall within one of the exemptions, such as transactions carried out within the same group of companies or in connection with a joint venture); or</li>\r\n 	<li>activities that fall within any of paragraphs 1 to 9 of Schedule 3 to the QFC Law (eg. financial or investment business, asset management, insurance, etc) and which are not carried on by way of business.</li>\r\n</ol>\r\nThe definition of a ‘Transaction’ in the new Regulations effectively removes the previous restriction on the type of transaction for which a Special Purpose Company may be set up. A ‘Transaction’ is now defined as “a transaction or series of transactions in connection with which the Special Purpose Company has been established”. This broad definition is a departure from the previous version of the Regulations, which had limited the type of transactions to Islamic or conventional structured finance transactions, including securitisations or other capital markets transactions.\r\n\r\nWith the removal of this restriction, the potential of a special purpose company could be expanded for the purpose of transactions such as mergers and acquisitions or corporate restructuring exercises.\r\n\r\n<strong>Holding Company</strong>\r\n\r\nA holding company established in the QFC may only carry on the following activities:\r\n<ol>\r\n 	<li>holding and maintaining one or more subsidiary;</li>\r\n 	<li>granting any type of security interest over its assets for its own benefit or for the benefit of any of its subsidiaries;</li>\r\n 	<li>providing an indemnity, guarantee or similar support to any third party for its own benefit or for the benefit of any of its subsidiaries;</li>\r\n 	<li>the acquisition, holding or disposal of any interest in any asset whether tangible or intangible for its own benefit or for the benefit of any of its subsidiaries;</li>\r\n 	<li>providing any type of loan or other form of financing to any other member of its group;</li>\r\n 	<li>any activities which are ancillary to the activities set out under (a) to (e) above; and</li>\r\n 	<li>any other activity approved QFC Authority that falls within the Permitted Activities identified in paragraphs 12, 14, or 15 of Schedule 3 to the QFC Law (e.g. the business activities of company headquarters, management offices and treasury operations or the business of provision, formation, operation and administration of companies), or qualifies as an exemption under Schedule 3 to the Financial Services Regulations.</li>\r\n</ol>\r\nThe activities have been broadened slightly in the revised Regulations to provide that a holding company may take the actions in paragraphs (b), (c) and (d) above for its own benefit, not just for the benefit of its subsidiaries, and to provide loans or other financing to any member of its group of companies and not just its subsidiaries; these would appear to be activities reasonably within the contemplation of any company.\r\n\r\nAlso of significance is the removal of certain reporting requirements previously imposed on holding companies. One is the requirement for a holding company to give prior written notice to the QFCA (and if applicable, the QFC Regulatory Authority) if it intends to provide services to any of its subsidiaries and await approval from the QFCA before it can proceed to supply such services.\r\n\r\nThe other requirements that have been removed are the requirements to submit an annual business plan to the QFCA on the holding company’s proposed activities and to give 21 days’ prior notice before conducting activities that are not in the business plan.\r\n\r\nThe changes represent a positive move as the result would be to reduce the administrative burden on holding companies.\r\n\r\n<strong>Greater Possibilities</strong>\r\n\r\nOne advantage of establishing holding companies in the QFC and which may not have been fully appreciated in the past by companies seeking to establish an entity in Qatar is that the Regulations do not impose any restriction on the types of activities or business carried out by the subsidiaries of a QFC holding company. This consideration, together with the changes to the Regulations in respect of special purpose companies and the indication from the QFC that applications are dealt with in very short timeframes, should make it more attractive for companies that may wish to consider establishing a special purpose company or holding company in Qatar (whether or not the rest of their operations are located in Qatar) to take advantage of the QFC’s low-tax regime and other benefits of having an office in Qatar.'),
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(89427, 4865, 'content', 'February 2014\r\n\r\n<hr />\r\n\r\n<strong>Introduction</strong>\r\n\r\nBusinesses operating in the Middle East and the Gulf Co-operation Council (“GCC”) region are yet again considered, by foreign investors, attractive acquisition targets, especially in light of the World Expo 2020 to be hosted by the United Arab Emirates (“UAE”) and the Qatar 2022 FIFA World Cup.  It is estimated that in 2012 the Saudi, Qatari and UAE economies grew 6.8%, 6.6% and 3.9%, respectively whereas major GDP growth rates were 2.2%, 0.2% and 0% (the United States, United Kingdom and France, respectively).\r\n\r\nOne may think regional M&amp;A deals are no different to those carried out in other parts of the world – the purchaser finds the target company, conducts legal, financial and business due diligence, decides on the deal structure and implements it, assuming the business case appears attractive.\r\n\r\nHowever, although the region’s practices have, to some extent, been influenced by Western, particularly British, ways of doing business and carrying out transactions, the fundamentals of the legal frameworks of most Middle Eastern countries remain deeply rooted in civil law principles (due to the influence of the French dating back to 1798 and (Napoleonic) Civil Code which was adopted in Egypt).\r\n\r\nWhen advising clients in relation to some regional M&amp;A transactions, I have made some practical observations as to what a purchaser contemplating making an investment in a Middle Eastern company should always pay attention to.\r\n\r\nIn this article, I will share some of my findings and highlight some of the key practical issues concerning M&amp;A deals in the Middle East, focusing on M&amp;As of private companies.\r\n\r\n<strong>1. Local Ownership Restriction</strong>\r\n\r\nOne of the most important practical considerations for a foreign investor contemplating acquiring a stake in a Middle Easter company is consider the maximum foreign shareholding allowable in respect of the target company under the laws of the relevant jurisdiction.\r\n\r\nMost Middle Eastern legal regimes, in an attempt to protect their national entrepreneurs, have implemented local ownership restrictions which either:\r\n<ol>\r\n 	<li>do not allow any foreign ownership of companies operating in particular industries (e.g. oil and gas, construction or recruitment) or ownership of real estate outside designated areas); or</li>\r\n 	<li>limit the percentage of shares in other local companies that are available for foreign ownership (e.g. 51% local ownership restriction in the UAE, Kuwait and Qatar; 30% in Oman (excluding US purchasers); 25% in respect of trading and professional companies in the KSA).  These limitations may not apply in economic free zones.<sup>1</sup></li>\r\n</ol>\r\n&nbsp;\r\n\r\nTo comply with the local ownership restrictions, a foreign investor is often required to have a local sponsor for the target company and, in case of a branch office, appoint a local registered agent.\r\n\r\nIn order to mitigate some of the practical hardships of the local ownership restriction and to ensure a foreign investor can, in practice, exercise a satisfactory level of control over the target company, foreign investors often enter into nominee arrangements with the target company’s local partners and shareholders, so the investor acquires an economic ownership of  shares in the target company above the allowed registered shareholding threshold (in addition to the legally permitted registered title to target company’s shares).\r\n\r\nAlthough the nominee arrangement seems simple enough from a common-law standpoint, Middle Eastern countries, being civil law jurisdictions, do not recognize any trust concept and as such, give no recognition to beneficial title, particularly in the context of shares, so a grey area will often exist, leaving investors exposed to changes in regulatory interpretation and procedure.\r\n\r\nFor this reason a foreign investor, before entering into a nominee arrangement with a local partner to acquire a beneficial stake in the target company, should keep the above in mind and consult local experts to find out how nominee arrangements are viewed in the state concerned.\r\n\r\n<strong>2. Deal Structure </strong>\r\n\r\nIn general, under Middle Eastern legal regimes the type of assets an entity can own depends on:\r\n<ol>\r\n 	<li>where the business has been registered; and/or</li>\r\n 	<li>what activities it is licensed to carry out.</li>\r\n</ol>\r\nAs a result:\r\n<ol>\r\n 	<li>a business license to operate the business is attached to the target company, so asset deals cannot be undertaken without a potentially problematic re-licensing process.</li>\r\n 	<li>the asset is often not suitable for transfer on to the purchaser.</li>\r\n</ol>\r\nConsequently, in order to benefit from the asset, a purchaser - regardless of being interested in buying only the asset (e.g. a facility plant, factory, production line, drilling rig, plot of land) owned by the target company - may have no practical choice other than to purchase the shares in the target company itself and deal with actual potential limitation of the target.\r\n\r\nIt is worth noting that because of the difficulties in acquiring assets alone, Middle Eastern M&amp;A deals are usually done by way of share acquisitions, not asset acquisitions.\r\n\r\n<strong>3. “Professional” License Holders</strong>\r\n\r\nSome commercial licenses (so called ‘professional licenses’) can only be held by individuals who are nationals of the country in question, e.g. pharmacies and real estate brokerage firms in the UAE; restaurants in Oman; law firms in Qatar.\r\n\r\nAs such, a target company holding a professional license may not be a suitable investment vehicle at all.\r\n\r\n<strong>4. Public Records</strong>\r\n\r\nAlthough Western lawyers are accustomed to being able to find general background information about the target company by way of conducting some standard background checks through public registers (e.g. corporate, real estate, bankruptcy, insolvency, and court registers), such registers have either not been established in some Middle Eastern states or information held there is not available to the public.\r\n\r\nThis makes it difficult to source written records from public authorities to verify even basic information about the target company, so a buyer usually has to rely on information furnished by the seller.\r\n\r\n<strong>5. No Case-Based Precedents</strong>\r\n\r\nIn case you require clear-cut opinions on potential issues, or there is a dispute with the counter party, you need to keep in mind that in the Middle East (unlike in common-law jurisdictions) there is no binding system of precedent, so previous judgments do no have to be followed (although they can be persuasive).\r\n\r\nAs such, you should treat previous decisions by Middle Eastern courts issued in similar cases only as broad guidelines rather than a precise indication as to how the matter at stake will be decided should it end up before a local court.\r\n\r\n<strong>6. Offer Revocation</strong>\r\n\r\nOnce you make an offer in a contractual context, under Middle Eastern legal systems, you may not be able to revoke it freely or at all.\r\n\r\nWhereas under common law an offer may (in principle) be revoked or varied until the moment it is accepted (and until such time when consideration is given), in general, under civil law principles an offer has binding character and cannot be revoked after being given If it is, damages may be payable.\r\n\r\n<strong>7. Assessment of Damages</strong>\r\n\r\nUnder Middle Eastern legal regimes a party that has suffered loss, regardless of the contractual provisions, will still be required to prove the loss suffered before being awarded damages. This means that liquidated damages clauses, e.g. common in English law governed share purchase agreements (and which provides  for a pre-agreed amount of damages to be paid in the event of breach so that an innocent party needs not prove its loss), are not strictly binding.\r\n\r\nWhat is more, even if the share sale and purchase agreement has set out a liability cap under indemnity clause, should the party that has suffered losses prove the actual losses exceed the cap on liability, it may be awarded the amount of the actual loss, despite the contractually agreed upon liability cap.\r\n\r\n<strong>8. Remedies</strong>\r\n\r\nMiddle Eastern court systems generally do not grant interim orders.  Procedural rules throughout the Middle East do not recognise prohibitive injunctions which restrain a party from doing something or mandatorily compel a party to do something pending full trial.  There are some exceptions (e.g. asset freezing orders) but generally orders of the type described are available after the full trial and judgment.\r\n\r\n<strong>9. Public Announcement</strong>\r\n\r\nWhen preparing a timetable for all M&amp;A deal in the Middle East, you should allow time for public announcement of the proposed share transfer, as this is often required under local laws (e.g. in respect of UAE private joint stock companies).\r\n\r\n<strong>10.  Pre-Emption Right </strong>\r\n\r\nFinally, even if constitutional documents are silent on pre-emption rights, statutory pre-emption rights of existing partners and shareholders in a Middle Eastern business (allowing them to buy the shares from the existing owners or subscribe for shares in the increased capital of the business) are common in the region.\r\n\r\nIn practice, this means that at completion, all the shareholders in closely held companies must co-operate in the process of signing notarised documents.\r\n\r\n<strong>CONCLUSION</strong>\r\n\r\nDespite the practical issues indicated above, the Middle East offers a friendly business environment and has continued to be an attractive part of the world for the purposes of making investments, starting or growing a business.  We expect M&amp;A activity to continue to increase, and as ever it is important that expert local advice is sought to avoid any pitfalls, such as those highlighted above.\r\n<div></div>'),
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(89456, 4868, 'content', 'March 2014\r\n\r\n<hr />\r\n\r\nHowever the previous rules on the enforcement of foreign arbitral awards (found at articles 235 – 238 of the UAE Civil Procedure Law) have not been repealed. This has sometimes led to confusion as to whether the previous rules still apply notwithstanding the UAE’s ratification of the New York Convention.\r\n\r\nIn Challenge No. 679 of 2010, the Abu Dhabi Court of Cassation reaffirmed the supremacy of the New York Convention over the previous UAE Civil Procedure Law, quashing the decisions of both the Court of First Instance and Court of Appeal.\r\n\r\n<strong>Facts and procedural background</strong>\r\n\r\nThe Claimant filed a claim before the Abu Dhabi Court of First Instance seeking the ratification and enforcement of a French arbitration award that had been issued under the auspices of the ICC.\r\n\r\nThe Defendant argued that the award contradicted a criminal judgment issued in the UAE in which the Claimant had been ordered to pay a fine for fraud.\r\n\r\nThe Abu Dhabi Court of First Instance decided to defer its judgment pending issuance of a decision in the criminal case. In due course the Claimant submitted a certificate issued by the Public Prosecution in which it was found that the criminal case had lapsed due to the expiry of a time limit.\r\n\r\nThe Abu Dhabi Court of First Instance then issued its judgment and refused to ratify the award. Article 235(a) of the UAE Civil Procedures Law states that a foreign judgment or foreign award is not to be recognized and enforced if the UAE courts would have had jurisdiction over the dispute. The Court of First Instance found that this was so in the case, and so refused to ratify the award, notwithstanding the fact that this is not a ground for refusal under the New York Convention.\r\n\r\nThe Claimant appealed to the Abu Dhabi Court of Appeal which upheld the decision of the Court of First Instance. The Claimant challenged the appeal court’s decision before the Abu Dhabi Court of Cassation.\r\n\r\n<strong>The Abu Dhabi Court of Cassation </strong>\r\n\r\nThe Claimant argued that the appealed decision misapplied the law in upholding the First Instance decision which applied Article 235 of the Civil Procedures Law instead of the New York Convention.\r\n\r\nThe Court of Cassation accepted the appeal and quashed the decisions made by the Court of First Instance and the Court of Appeal.\r\n\r\nThe Court of Cassation held that Articles 235-238 of the UAE Civil Procedures Law (and in particular Article 238) require UAE courts to abide by the provisions of any international conventions to which the UAE is a signatory. If however a foreign award was rendered in a state that is not a signatory to an international convention or treaty acceded by the UAE, the court would need to determine whether the conditions set out in Article 235 of the Civil Procedure Law have been met.\r\n\r\nSince the UAE ratified the New York Convention in 2006, the provisions for recognition set out in the Convention have become mandatory laws of the state notwithstanding its contradiction to previous laws (including Article 235-238 of the Civil Procedures Law).\r\n\r\nThe appealed decision contradicted the above view in upholding the lower court’s decision on the basis that the UAE courts would have had jurisdiction to hear the dispute.\r\n\r\n<strong>Case Comment</strong>\r\n\r\nThe decision by the Abu Dhabi Court of Cassation is welcome because it clarifies again that the provisions of the New York Convention take precedence over the pre-existing recognition and enforcement criteria found in Articles 235-238 of the Civil Procedure Law.\r\n\r\nThis is important because the provisions in the Civil Procedures Law make it extremely difficult to enforce foreign arbitral awards. As can be seen from the Court of First Instance judgment, one of the reasons for refusing recognition and enforcement under the Civil Procedures Law is if it cannot be established that the local court would not have had jurisdiction over the dispute (article 235(a)). This will almost always be the case since the court will consider that it has jurisdiction if a party is based in the UAE or has assets in the UAE, and enforcement is only likely to be sought where there are assets in the UAE.\r\n\r\nThe difficulty of enforcing foreign arbitral awards under the Civil Procedures Law was why it was so important that the UAE accede to the New York Convention. Under the Convention, foreign arbitral awards can only be refused recognition on the basis of a few narrow procedural irregularities, or if the award is against public policy.\r\n\r\nWhilst the judgment is welcome, it does highlight two areas for concern:\r\n<ol>\r\n 	<li>Although the Court of Cassation is clear that the New York Convention takes precedence over the Civil Procedures Law, from time to time the lower courts are still applying the old law And ignoring or misunderstanding the application of the New York Convention. In light of this judgment of the Court of Cassation hopefully we will see less instances of this.</li>\r\n 	<li>The Court of Cassation made a distinction between foreign awards issued from a state that had signed the New York Convention (and to which it would therefore apply the New York Convention criteria on enforcement); and awards from non-Convention states (to which would be applied the old Civil Procedures Law criteria). This is arguably incorrect because on acceding to the Convention the UAE did not make any reservations to this effect, and the terms of the Convention state that its criteria is to apply to all foreign arbitral awards regardless of where they are issued (unless a reservation is made). However since the vast majority of states have signed the New York Convention, it is unlikely to arise in practice.</li>\r\n</ol>'),
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(89475, 4869, 'content', 'March 2014\r\n\r\n<hr />\r\n\r\nThe Employee was hired by the Company in 2001 under an indefinite term employment contract on a monthly salary of AED 5,000 but with the promise of commission at 10% of the Company’s net profit. The Employee alleged that the Company failed to pay him the full commission agreed upon for 2005 and 2006. The Employee lodged a complaint with the Labour Department, which was then referred to court.\r\n\r\n<strong>Procedural History </strong>\r\n\r\nThe Court of First Instance appointed an expert to determine whether the Employee was employed by the Company on a commission or monthly salary basis and the total commission to which he was entitled.\r\n\r\nAfter receiving the expert’s report, the Court of First Instance ordered the Company to pay the Employee the sum of AED 40,561 with 9% interest from the date of the claim (2 May 2007) until full payment.\r\n\r\nThe Company appealed in Labour Appeal No. 1214 of 2007, as did the Employee in Labour Appeal No. 1218 of 2007. After joining the related appeals, the Court of Appeal proceeded, on 28 February 2008, to amend the lower Court’s award to AED 35,561 while affirming the rest of the judgment.\r\n\r\nThe Court of Appeal held that the claim for the 2005 commission was barred by the one-year statute of limitations. The Court found that the commission was earned on 31 December 2005 but that the Employee had lodged his complaint with the Labor Department more than one year after that date (2 May 2007). The Court stated that “the fact that the Company was preparing its budget is no legal excuse for the Employee not to claim his rights, for he could have commenced court proceedings the next day after earning his commission on 31 December 2005 to have an expert appointed to determine his entitlements and the court rule in his favor on the basis of the expert’s findings”.\r\n\r\nBoth parties appealed to the Court of Cassation.\r\n\r\n<strong>The Court of Cassation </strong>\r\n\r\nThe Employee argued that the Court of Appeal erred in holding that, because 2005 commission was due on 31 December 2005 (the end of the Company’s financial year) the claim for this commission was barred by the one-year statute of limitations.\r\n\r\nAs per the documents filed by the Company, the audit which looks at the budget from a profitability standpoint is completed in June of the year following the year for which the accounts are audited. By then the Company would have received the revenue from its market sales. Profits cannot be calculated whilst Company goods are with its customers and have not yet been paid for. Profit and loss can only be determined once actual payment has been received for the goods. The auditor then examines all the accounts and fixes the date of announcement of the profit and loss results that have been audited by the Company accountant in order to arrive at the amount due to the Employee as profit commission.\r\n\r\nThe Company’s 2005 audit report confirms that the results were announced not on 31 December 2005 as the Company alleged, but on 6 June 2006. This was verified by the Court-appointed expert in his report after confirming the Employee’s entitlement to commission. The expert had come across a Company email dated 4 July 2005 that included a calculation of the Employee’s commission for 2004. This showed that the commission payouts became known only at the date of announcement of budget results, more than six months following the end of the budget year. The Court of Appeal should therefore have used 6 June 2006, not 31 December 2005, as the date when the statute of limitations period for the 2005 commission began to run.\r\n\r\nThe Cassation Court allowed the appeal and held as follows:\r\n<ol>\r\n 	<li>It has been well settled by the Court of Cassation that according to Article 6 of the Labour Law and Article 478 of the Civil Transactions Law, the one year statute of limitations for any claim under the Labour Law or an employment contract starts running from the date when the right is capable of being exercised.</li>\r\n 	<li>Accordingly, the due date for the employee’s profit commission falls on the day when the results of the Company’s operations are announced. Profitability can then be determined along with the employee’s share of the profits.</li>\r\n</ol>\r\nThe Court of Appeal’s conclusion was not well-reasoned as it did not look into the actual date of the announcement of the Company’s operation results for 2005, which is the date to be relied upon in determining the Employee’s entitlement. The Court of Appeal’s decision must therefore be quashed.\r\n\r\n<strong>Practice note</strong>\r\n\r\nLabour claims have a short limitation period of only a year. This Court of Cassation judgment is helpful in clarifying that this period will only start once the right becomes capable of being exercised, which in claims for commission is when the profits of the company are announced.\r\n\r\nThe Court of Appeal’s approach (that the employee should have filed a claim seeking an expert determination before the official profits are announced) would have forced employees to file unnecessary claims simply to ensure the limitation period did not expire, despite there being no reason to doubt that the commission would be paid once the profits are announced.\r\n\r\nThe Court of Cassation’s judgment is therefore helpful to both employees and employers.'),
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(89500, 4870, 'content', 'March 2014\r\n\r\n<hr />\r\n\r\nThey involve parties agreeing, by means of a contract, that a pre-determined sum is payable in the event that one of the parties breaches a term of the contract.\r\n\r\nThe DIFC Courts may recognise liquidated damages provisions in agreements, regardless of whether they are applying DIFC law or another governing law to the dispute before them.  The DIFC Courts will apply DIFC law to a matter unless the contracting parties have expressly agreed to submit their dispute to another governing law, which they are permitted to do pursuant to Dubai Law No. 12 of 2004 (as amended) (Judicial Authority at the Dubai International Financial Centre) and DIFC Law No. 10 of 2004 (Court Law).  If a governing law other than DIFC law is chosen by the parties to a dispute, expert evidence as to that law must be adduced by the parties seeking to rely on it in DIFC Court proceedings.  It should also be noted briefly that the DIFC Courts generally recognise contracting parties’ express choice of jurisdiction, i.e. the courts which the parties selected to determine claims between them.\r\n\r\nDIFC law comprises a significant body of legislation, regulations and cases, even though the DIFC is a relatively new jurisdiction (having only been established in 2004).  Its laws include the DIFC Law of Contract (Law No. 6 of 2004) and the DIFC Law of Damages and Remedies (DIFC Law No. 7 of 2005).  Article 21 of Law No. 7 of 2005 sets out the following provisions relating to agreed payments for non-performance:\r\n<ul>\r\n 	<li>Where the contract provides that a party who does not perform is to pay a specified sum to the aggrieved party for such non-performance, the aggrieved party is entitled to that sum irrespective of its actual loss.</li>\r\n 	<li>However, notwithstanding any agreement to the contrary the specified sum may be reduced to a reasonable amount where it is manifestly disproportionate to the loss envisaged as capable of resulting in relation to the loss resulting from the non-performance and to the other circumstances.</li>\r\n</ul>\r\nThe test set out in Article 21(2) above is set out in a slightly different way in Article 122 of Law No. 6 of 2004, which provides that the liquidated damages sum specified in a contract can be reduced to a reasonable amount where it is “grossly excessive” rather than “manifestly disproportionate” to the harm resulting from a breach of contract.  Article 122 reads as follows:\r\n\r\nWhere the contract provides that a party who does not perform is to pay a specified sum to the aggrieved party for such non-performance, the aggrieved party is entitled to that sum irrespective of its actual harm.\r\n\r\nHowever, notwithstanding any agreement to the contrary, the specified sum may  be reduced to a reasonable amount where it is grossly excessive in relation to the harm resulting from the non-performance and to the other circumstances.\r\n\r\nTo date there is no DIFC Court precedent for what might be considered “manifestly disproportionate” or “grossly excessive” in the context of a claim for the enforcement of a liquidated damages clause.  However, the DIFC Courts have enforced a liquidated damages clause in a case where they held that the defendant had no answer to the claim for liquidated damages (CFI 004/2007 Arabtec Construction LLC v Ultra Fuji International LLC).\r\n\r\nThe DIFC law tests for the validity of liquidated damages clauses - “manifestly disproportionate” and “grossly excessive” - suggest a high threshold test similar to the “extravagant and unconscionable” test employed under English law to determine the enforceability of liquidated damages clauses.  The English Courts, recognising the benefits of such clauses and the overall principle that parties are free to contract, generally uphold liquidated damages clauses in a commercial context, provided that they do not amount to a penalty.\r\n\r\nThe DIFC Courts have recognised that DIFC law is modelled on English common law principles, and that in construing the applicable codified provisions of DIFC law it is appropriate to “add flesh to the concise bones of these [DIFC] legislative provisions by looking to the manner in which the English Courts have given effect to similar principles.  Whereas the ruling principles are those laid down in the DIFC codes, the manner of application can properly be informed by reference to English law not as a default system but as an aid to construction and application“ (CFI 8/2007 Ithmar Capital v 8 Investments Inc. and 8 Investment Group FZE, per Justice Colman at paragraph 112).\r\n\r\nUnder English law, liquidated damages clauses may be considered a penalty, and therefore unenforceable, if:\r\n<ul>\r\n 	<li>the overriding intention of the clause is to coerce a party into performing rather than compensating an innocent party in the event of a breach;</li>\r\n 	<li>it does not serve a legitimate commercial purpose and is therefore not commercially justifiable;</li>\r\n 	<li>the sum in question greatly exceeds the actual losses, to the extent that it could be considered to be “extravagant and unconscionable”;</li>\r\n 	<li>there is a single sum payable for both serious and trivial breaches regardless of the nature of the resulting loss; and/or</li>\r\n 	<li>in the context of breaches of payment obligations, the sum goes beyond what could be considered to be compensatory.</li>\r\n</ul>\r\nIn conclusion, based on the English law principle that liquidated damages clauses are generally enforceable, it is clear that in applying DIFC law, the DIFC Courts will also generally uphold liquidated damages clauses unless they constitute a penalty as defined by the criteria set out above.'),
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(89515, 4871, 'content', 'March 2014\r\n\r\n<hr />\r\n\r\nThere are three essential qualities a lawyer needs to develop to achieve continuing success in their career. Lawyers should ensure they:\r\n<ol>\r\n 	<li>Receive continuing legal professional development to further their skills and knowledge of the profession itself as well as their specialist practice area.</li>\r\n 	<li>Focus qualitatively on their service and legal work.</li>\r\n 	<li>Gain commercial knowledge relevant to their practice as well as social skills to successfully communicate with clients.  Lawyers should use simplistic language and provide creative solutions based on their understanding of business in the relevant sector.</li>\r\n</ol>\r\nWith reference to the above points, the sky is the limit when it comes to how much a lawyer can continue to develop themselves throughout their career. In this article, I will concentrate on continuous legal professional development, a subject that is essential for all law firms, communities and individual lawyers. The knowledge and skills needed to practice law are dynamic and lawyers need to keep up with developments in the law to continuously refine their skills.\r\n\r\nContinuing professional development (“CPD”) is the maintenance and enhancement of a lawyer’s professional knowledge, skills and professionalism throughout their career.  It helps to ensure that lawyers meet the standards of learning, professional competence and conduct that is appropriate for the legal services they provide.  CPD programmes exist within most developed legal systems and are sought after by emerging legal markets.  Most western jurisdictions require lawyers to complete a set number of CPD hours on set topics each year.  Lawyers are required to verify their compliance with the CPD requirements to renew their practising certificate.\r\n\r\nThe Government of Dubai Legal Affairs Department will be introducing a programme requiring lawyers to enrol in different courses each year to further their local education with regard to skills and professional ethics. At present it is unclear whether lawyers with current practicing certificates from western jurisdictions will also be required to enrol, however there is strong reason to believe that they will also be required to take part.\r\n\r\nThe Ministry of Justice is also considering an initiative to start a similar programme, however at present it is the Legal Affairs Department who has committed to progress, structure and introduce the programme. It must however be mentioned, that this programme is not undertaken by the Ministry of Justice for the purpose of qualifying lawyers (as part of their one year training programme) to be fully licensed to act and appear before a court or as an advocate.  It is instead ongoing CPD.\r\n\r\nWhat is interesting about the programme is that it not only covers updates on changes made to laws in various practice sectors like shipping or banking, but goes further to provide training on ethical standards and the conduct of lawyers. This is of equal or even greater importance than a lawyer’s technical skills and training. It is very important for the development of the younger generation of lawyers and lawyers from different cultures who are practicing in the UAE.\r\n\r\nThe UAE does not currently have comprehensive laws or regulations relating to the ethical practice of lawyers, apart from a few articles within the laws of Dubai and Abu Dhabi and the DIFC Courts’ Code of Professional Conduct for Legal Practitioners in the DIFC Court, for lawyers who appear before the DIFC Courts.\r\n\r\nAn essential element for legal education carried out either in-house or via the Legal Affairs Department is concentrating on qualitative issues such as advice and service to the client, organising files, communicating with the client, billing style, format of advice, conduct of lawyers before the judge, marketing, and delivery of the final version of a contract to the client. CPD should not be restricted to technical advancement but should also embrace personal development in essential management, business and client development skills.  These elements are essential and highly relevant to everything a lawyer does within the firm and for their client.\r\n\r\nThe good news is that Dubai has a healthy environment to continue to incorporate and execute CPD training and a local and international community of senior lawyers with the necessary skills and knowledge to provide excellent support and assistance in the training of young lawyers and other lawyers within the UAE. This will gain traction when the Legal Affairs Department introduces its own CPD programme, which is in the final stage of implementation.'),
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(89534, 4872, 'content', 'March 2014\r\n\r\n<hr />\r\n\r\nA number of influential international organizations recently have issued publications that discuss the promotion of sustainable development in international investment. These organizations include the United Nations; <sup>1</sup> UNCTAD <sup>2</sup>;  FAO, IFAD, the UNCTAD Secretariat, and the World Bank Group<sup>3</sup>;  the Commonwealth Secretariat<sup>4</sup>;  the Organisation for Economic Co-operation and Development (OECD)<sup>5</sup>;  the International Chamber of Commerce (ICC)<sup>6</sup>;  and the South African Development Community (SADC).<sup>7</sup>\r\n\r\nThese publications evince two theoretically distinct, but complementary, approaches to the promotion of sustainable development in international investment:<sup>8</sup>\r\n<ol>\r\n 	<li>(A) Declaration of key principles: the Principles on Responsible Agricultural Investment, for example, propose a number of principles concerning consultation and participation and social and environmental sustainability;<sup>9</sup> and (B) the presentation of guidelines to relevant stakeholders, including investors and states: the ICC Guidelines, for example, recommend that the investor “should support sustainable economic growth by considering the financial, environmental, and social impacts of its investment in the host country at the outset of the planning and during operation.” <sup>10</sup></li>\r\n 	<li>Guidance to states on how best to integrate sustainable development objectives into international investment agreements (IIAs): the Commonwealth Secretariat Guide,<sup>11</sup> for example, suggests that, in future IIAs, investors would be required to conduct a sustainability assessment of investments that takes into account their environmental, social and human rights impacts.<sup>12</sup></li>\r\n</ol>\r\nWhile the two variants of the first approach purport “to set forth the responsibilities” of the relevant stakeholders in the international investment process,<sup>13</sup>  their observance, in and of themselves, by investors is “voluntary and not legally enforceable.” <sup>14</sup> The effectiveness of such principles and guidelines thus depends on, among other things, their incorporation by investors into corporate policies and “project identification and implementation.”<sup>15 </sup>The second approach goes further by seeking to “operationalize” sustainable development objectives into IIAs by enumerating “a comprehensive compilation of policy options available to IIA negotiators.”<sup>16</sup> A number of proposed IIA design options merit particular attention:\r\n<ul>\r\n 	<li>Investors would be required to comply with the laws and regulations of the host country when making and operating an investment, even at the post-operations stage (e.g., environmental clean-up). <sup>17</sup></li>\r\n 	<li>Introduction of a two-way umbrella clause that would require both the host country and the investor to observe their specific obligations in relation to their investments, including any sustainable development-related commitments, under any investment contract concluded between the investor and the host country. <sup>18 </sup></li>\r\n 	<li>Introduction of a best endeavors clause, requiring investors to comply with principles and guidelines that seek to promote sustainable development objectives or standards. <sup>19</sup></li>\r\n</ul>\r\nThese IIA design options could be complemented by further designing IIAs to limit investor access to investor-state dispute settlement where the investor fails to comply with such obligations (e.g., an IIA provision requiring compliance with domestic law), and/or provide a counterclaim mechanism for the host country against an investor that has made an international investment treaty claim.<sup>20</sup> The former could serve to exclude claims in respect of investments that fail to respect sustainable development-related obligations, while the latter would enable the home country to obtain relief for injuries suffered as a result of an investor’s non-compliance with such obligations.\r\n\r\nThe practical implementation of these IIA design options would, of course, involve a significant shift in the design of future IIAs, since they require balancing traditional state commitments against new investor commitments introduced in connection with the achievement of sustainable development objectives. <sup>21</sup>\r\n\r\nIt remains to be seen if IIAs can be utilized in a way that imposes sustainable development-related obligations on investors. Nonetheless, these IIA design options represent significant “game changers” in the area of international investment, including in relation to investor-state dispute settlement, and merit serious consideration by stakeholders.\r\n\r\n<em>Previously published by Columbia FDI Perspectives, No. 108, November 11, 2013 and ICC UAE quarterly Magazine. Co-authored with Janani Sarvanantham.</em>\r\n\r\n<em>Footnotes:</em>\r\n<ol>\r\n 	<li><address>UN, Guiding Principles on Business and Human Rights (2011), available at http://www.ohchr.org/Documents/Publications/GuidingPrinciplesBusinessHR_EN.pdf.</address></li>\r\n 	<li><address>UNCTAD, Investment policy framework for sustainable development (2012) (IPFSD), available at http://unctad.org/fr/PublicationsLibrary/webdiaepcb2012d6_en.pdf.</address></li>\r\n 	<li><address>FAO, IFAD, UNCTAD, and the World Bank Group, Principles on Responsible Agricultural Investment (January 2010) (PRAI), available at http://siteresources.worldbank.org/INTARD/214574-1111138388661/22453321/Principles_Extended.pdf.</address></li>\r\n 	<li><address>J Anthony VanDuzer, Penelope Simons and Graham Mayeda, Integrating Sustainable Development into International Investments Agreements: A Guide for Developing Countries (2012) (Commonwealth Secretariat Guide), available at http://www.iisd.org/pdf/2012/6th_annual_forum_commonwealth_guide.pdf.</address></li>\r\n 	<li><address>OECD, OECD Guidelines for Multinational Enterprises (2011) (OECD Guidelines), available at http://www.oecd.org/daf/inv/mne/48004323.pdf.</address></li>\r\n 	<li><address>ICC, ICC Guidelines for International Investment (2012) (ICC Guidelines), available at http://www.iccindiaonline.org/pdf.pdf.</address></li>\r\n 	<li><address>SADC, SADC Model Bilateral Investment Treaty Template with Commentary (2012) (SADC Model BIT), available at: http://www.iisd.org/itn/wp-content/uploads/2012/10/SADC-Model-BIT-Template-Final.pdf.</address></li>\r\n 	<li><address>It should be noted that these publications have benefited from the conceptual policy work and content of the IISD Model International Agreement on Investment for Sustainable Development (2005).</address></li>\r\n 	<li><address>See, PRAI, pp. 5-7.</address></li>\r\n 	<li><address>See, e.g., ICC Guidelines, p. 18.</address></li>\r\n 	<li><address>See, e.g., Commonwealth Secretariat Guide; SADC Model BIT.</address></li>\r\n 	<li><address>See, Commonwealth Secretariat Guide, p. 33.</address></li>\r\n 	<li><address>See, e.g., ICC Guidelines, Preamble.</address></li>\r\n 	<li><address>See, OECD Guidelines, p. 17.</address></li>\r\n 	<li><address>See, FAO, IFAD, the UNCTAD Secretariat, and the World Bank Group, PRAI Discussion Note: Synoptic Version (March 2010), available at http://unctad.org/en/Docs/ciicrp3_en.pdf, p. 8. Such principles might have a longer term effect if over time they coalesce into customary international law obligations or emerge as elements of international public policy.</address></li>\r\n 	<li><address>See, IPFSD, p. iii.</address></li>\r\n 	<li><address>See, IPFSD, p. 39.</address></li>\r\n 	<li><address>Ibid., p. 54.</address></li>\r\n 	<li><address>Ibid., p. 58.</address></li>\r\n 	<li><address>Ibid., p. 39.</address></li>\r\n 	<li><address>Most IIAs currently only provide for State obligations but do not usually specify investor obligations or responsibilities. See, IPFSD, p. 39. </address></li>\r\n</ol>'),
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(89553, 4873, 'content', 'March 2014\r\n\r\n<hr />\r\n\r\nHowever, where a reasonable disciplinary procedure is undertaken by an employer, it can be time and money well spent, particularly where it results in the satisfactory improvement of an employee’s performance or conduct, or the lawful dismissal of a difficult employee.\r\n\r\nIn the UAE (including all freezones in the UAE other than the DIFC), private employers are required to comply with UAE Federal Law No.8 of 1980, as amended (“UAE Labour Law”) – the principal legislation regarding employment matters in the UAE – when implementing disciplinary action against an employee.\r\n\r\n<strong>Disciplinary action </strong>\r\n\r\nThe statutory provisions governing disciplinary procedures are minimal but clearly dictate how a disciplinary procedure should be conducted.  In accordance with Article 102 of the UAE Labour Law, an employer may impose certain disciplinary penalties on its employees, which include a warning, fine or dismissal.  Article 110 of the UAE Labour Law sets out strict legal formalities, which provide that the penalties listed under Article 102 may not be imposed unless:\r\n<ol>\r\n 	<li>The employee has been notified in writing of the allegations against him;</li>\r\n 	<li>The employee has been given an opportunity to comment on the allegations;</li>\r\n 	<li>The employer has investigated any defence provided by the employee in respect of the allegations; and</li>\r\n 	<li>The process listed in (1) to (3) above is recorded in the employee’s personnel file, and the penalty noted at the bottom of the report.</li>\r\n</ol>\r\nThere are very strict time limits within which disciplinary action must be taken.  An employer must initiate the disciplinary procedure within 30 calendar days of discovering the misconduct and any disciplinary sanction must be determined within 60 calendar days of the investigation being concluded.\r\n\r\nGetting the procedure right before implementation of a particular disciplinary sanction is important to avoid litigation or, in a worst case scenario, protect the employer should a claim be filed by an employee.  In particular, if an employer fails to comply with the statutory procedure, the final disciplinary penalty could be found by the Labour Courts to be unlawful (irrespective of the employee’s poor performance or conduct).\r\n\r\n<strong>Arbitrary dismissal </strong>\r\n\r\nFollowing the termination of employment, employees in the UAE may pursue claims for arbitrary dismissal under the UAE Labour Law, which is similar to the UK concept of unfair dismissal.  Whether an employee will be successful with any such claim will ultimately depend on the reason for the termination and the process the employer undertook prior to terminating the employment.  Therefore, it is essential for employers to follow the correct procedure from the outset.\r\n\r\nAn employer may terminate an employee working under an unlimited term contract at any time on written notice, provided the employer follows the process set out above, gives the employee the correct written notice of termination in accordance with the employment contract and the dismissal is for a “valid reason”.  The notice period should be at least 30 calendar days.  Although there is no definition of a “valid reason” in the UAE Labour Law, an employee’s employment will be deemed to have been arbitrarily terminated if the reason for the termination was “irrelevant to the work”.\r\n\r\nIn our experience, the Courts only accept a termination to be “valid” and thus decline to award arbitrary dismissal compensation, where either (i) the employee is guilty of one of the specified (and exhaustive) gross misconduct type reasons listed in Articles 88 and 120 of the UAE Labour Law, or (ii) the employee is a poor performer (and there is documentary evidence supporting the poor performance or misconduct).\r\n\r\nThe maximum compensation that can be awarded to an employee pursuant to an arbitrary dismissal claim is three months’ remuneration, calculated based on the last pay received by the employee prior to dismissal.  For these purposes, “remuneration” is the employee’s full pay (basic salary plus any monthly allowances).  In addition, where the employee receives regular or guaranteed bonus or commission payments, these may also be taken into account by the Court when determining the employee’s remuneration.  The actual amount of the award, if any, is ultimately determined by the Court.  Whilst the cap on compensation might be perceived from a costs-benefits ratio as fairly low-risk by some employers, what should not be overlooked or discounted is the inevitable management time and legal costs that will be incurred in defending a claim presented by an aggrieved employee.\r\n\r\n<strong>Best practice </strong>\r\n\r\nIn order to avoid the potential consequences of dismissing or imposing lesser sanctions on employees, it is important that the employer follows a fair and reasonable process and any sanction is supported and justified with documentary evidence.  This should apply equally to cases of terminations for poor performance and summary dismissal for gross misconduct under Articles 88 and 120 of the UAE Labour Law.  Subject to the nature of the misconduct, employers may be required to notify the applicable governmental authority (which varies depending on the type of offence committed) or file a police complaint and await a final judgment against the employee, before confirming its final decision. For completeness, any type of dismissal of a UAE national employee requires the employer to notify the Ministry of Labour 30 days prior to confirming its decision.\r\n\r\nWe recommend that employers operate a company disciplinary policy (whether as part of the contract of employment, the staff handbook or a free-standing policy), which addresses the minimum requirements set out in the UAE Labour Law. Any disciplinary policy should be communicated to all employees, be readily available for them to access, and serve as a guide throughout the disciplinary process.\r\n\r\nUltimately any disciplinary sanction taken should always be justifiable, be supported by written evidence, be subject to a reasonable disciplinary procedure and considered in light of the particular circumstances of the case and the requirements of the UAE Labour Law.'),
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(89582, 4874, 'content', 'March 2014\r\n\r\n<hr />\r\n\r\n<strong>The UAE Reinforces its Basis for Protecting Innovation</strong>s\r\n\r\nThe United Arab Emirates has proved to be a leading economy in the Middle East.  It is currently the second largest economy in the Arab world after Saudi Arabia, with a GDP exceeding 400 billion dollars and with a gain of more than GDP 11 billion dollars in 2013. The UAE economy has grown around 231 times since its independence in 1971 and is continuing to grow at huge pace.  The UAE is currently ranked 28th worldwide in GDP. The UAE’s economy is expected to grow between 4-4.5% in 2014, despite the political instability in the surrounding countries.  The UAE’s remarkable and continuous economic achievements and success have been a focus worldwide and it has become a place of trust in the international community, reflected most recently by winning the bid to host the prestigious EXPO 2020.  The UAE’s real GDP is expected by experts to double by 2020.  A large number of massive scale projects are currently being designed across the country.\r\n\r\nThe UAE’s historically strong petrochemical industry has been leveraged in the last decade to attract investments in non-oil based sectors.  Currently, more than 70% of the UAE’s total GDP comes from non-oil sectors, including tourism, real estate, finance, transport and trade. Knowledge and innovations are now among the core aims of the UAE government, which is determined to further strengthen and diversify its economy by attracting regional and international technology players inside the country and by fostering the development of local innovations. The technological sector in the UAE is strongly believed to advance at an unprecedented pace in the short and medium terms.\r\n\r\nA large number of projects have been undertaken by the government to attract foreign investments in the technological and knowledge arena, notably the implementation of a number of free zones, such as Dubai Silicon Oasis, Dubai Internet City, Dubai Knowledge Village, Dubai Technology and Media Free Zone, only to name a few.  A number of other free zones are also currently under construction, notably Dubai TechnoPark, which is an information technology park covering an area of 21 million square meters of land designed for the commercial development of technology. These free zones are designed to provide foreign ownership-flexibility and tax benefits for foreign companies and investors.  A number of other initiatives have also been taken up by the authorities including innovation funding programmes for local inventors and investment in mega-projects in various technological fields of public interest such as energy and aviation.\r\n\r\nThe rapid economic development in the UAE has led to an important rise in the number of patent applications filed in the UAE which is expected to continue.  In another initiative, the UAE has concluded on 14 February 2014 a Memorandum of Understanding with the Republic of South Korea for cooperation on intellectual property rights, particularly in the field of patents.  The agreement included collaborative arrangements between the Korean Intellectual Property Office (KIPO) and the UAE Ministry of Economy for the examination of UAE patent applications and the development of the local capabilities of the UAE Patent Office. This includes the training of local examiners in the examination of patent applications in various fields of technology.  The UAE Ministry of Economy will meanwhile continue to have parallel collaborations with its traditional partner, the Austrian patent office, for the examination of applications.  However, it is believed that the UAE Patent Office will continue to build its local capabilities with the objective of becoming a fully independent patent office in the upcoming short number of years.  More than 2,200 UAE patent applications filed before 2011 are expected to be examined before the first half of 2014.\r\n\r\nKnowledge and innovation are believed to be an important dimension of the UAE’s economical growth in the short and medium terms.  It is believed that the UAE will continue to pave the way in attracting direct foreign investment in technology and in fostering local innovation.\r\n\r\n<strong>Overview of the UAE Patent System</strong>\r\n\r\nPatent protection in the UAE is regulated under Federal Law No.17 of 2002 as later amended by Federal Law No.31 of 2006.  Patent protection in the UAE is granted for inventions that are novel, inventive and useful. Absolute worldwide novelty is required. The term of protection for patents is 20 years from the filing date.\r\n\r\nThere are essentially two routes for patent protection in the UAE, a national route and a regional route.  The national route requires filing a national application at the UAE Patent Office. The regional route requires filing a GCC patent application, which once granted, would in principle cover protection in the six GCC countries. However, there are still uncertainties with regard to the enforcement of a GCC patent in the UAE as well as to the availability of invalidation procedures for such patents in front of the local courts.  The most applicable protection route would depend on the circumstances of each case.\r\n\r\nThe UAE is a member of a number of international and regional treaties and bodies, namely the World Intellectual Property Organisation (WIPO) Convention, the Patent Cooperation Treaty (PCT), the Paris Convention, The Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS), and the Gulf Cooperation Council (GCC). It is possible to take advantage of these conventions when considering patent protection in the UAE.\r\n\r\nPatent applications in the UAE should be filed in both English and Arabic accompanied by certain formality documents which include a power of attorney, an assignment (where the applicant is not the inventor) and a commercial licence (where the applicant is a commercial entity). The formality documents should be legalised at the UAE embassy or consulate at the place of execution (if outside the UAE). Where the patent application claims priority over an earlier filed application under the Paris Convention, a copy of the priority application in both English and Arabic should also be filed. The formality documents can be filed within 90 days from the filling date of the patent application.\r\n\r\nOnce the patent application is accepted as to formalities, it is put in line for substantive examination. As a result of the collaboration agreement between the UAE Patent Office and KIPO, it is believed that the current backlog for the substantive examination of applications is between one to two years. The patent office will require the applicant to pay the substantive examination fees once the application reaches its turn for examination. It is not possible to request the substantive examination prior to that date.\r\n\r\nThe application is then examined in light of criteria including novelty, inventiveness and utility. The validity of the priority claim is also assessed during substantive examination. The applicant is generally given between two to three opportunities to respond to the examiner’s objections and amend the application to overcome these objections. Patent applications are prosecuted in both English and Arabic, and thus all amendments to the patent application during examination should be filed in both English and Arabic. Upon completion of the substantive examination, the UAE Patent Office will either accept or reject the application. Rejected applications can be appealed in front of the competent committee at the Ministry of Economy within a 60-day period.\r\n\r\nIf the UAE Patent Office agrees to grant a patent, the applicant is directed to prepare the publication material and pay the publication fees, subsequent to which a decision to grant a patent is published in the UAE Official Gazette. The publication of the decision to grant starts a 60 days’ opposition period within which third parties have the opportunity to oppose the decision to grant a patent.  If no oppositions are filed by the end of the 60 days’ period, a patent is granted and the UAE Patent Office issues a registration certificate evidencing the grant of the patent. Once a patent is granted, it is valid and enforceable for a period of 20 years from the filing date and gives the patentee the right to exclude others from exploiting the invention without authorisation within the UAE territory\r\n\r\nAfter grant of the patent, infringement and invalidation procedures are available in front of the UAE judicial courts. It is important to note that Arabic is the only official language accepted in front of the UAE courts and therefore all evidentiary documents should be filed in Arabic in order to be admissible.  Equally, only the Arabic version of the patent granted is admissible in front of the judicial courts. This highlights the importance of having the Arabic translation of the patent application reviewed by an Arabic speaking patent lawyer prior to its grant.\r\n\r\nIn order to keep the patent application or patent valid, annuity fees should be paid annually in the UAE from the first anniversary until the 20th anniversary of the application or patent, taken from the filing date. The invention is subject to compulsory licensing in favour of third parties if the invention is not used by the applicant (or an authorised licensee or assignee) within a 3 year period from the date of grant inside the UAE.\r\n\r\n<strong>Rising Sectors for Patents</strong>\r\n\r\nPatent applications are filed in the UAE in a wide range of industries, but currently remain mostly concentrated in the sectors of information technology, petrochemicals (covering mechanical and chemical related innovations) and pharmaceuticals. Whilst these traditional sectors will continue to grow in the UAE, the diversification and growth of the UAE economy will have a strong impact on the development of the real estate, construction, tourism, food and beverage and banking sectors. The UAE’s plans to invest heavily in its own infrastructure (including transport and logistics) will also likely result in increased growth in the sectors of general manufacture, industrial machinery, transport equipment and ICT equipment. Other sectors supported by the UAE authorities and expected to face substantial growth include health care, energy (including renewable energy), and aviation.\r\n\r\nIt would be wise for those doing or planning to do business in the UAE to consider patent protection inside the country as means for protecting their investments and increasing their market share against their competitors.'),
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(89601, 4875, 'content', 'March 2014\r\n\r\n<hr />\r\n\r\nThis is the second in a series of articles concerning the current status of product liability and related topical issues in the UAE.  In the first article, we examined the legal framework governing product liability and consumer protection in the context of recent legal requirements to improve the quality and safety of products in the market-place.  In this article, we examine the problem of counterfeiting and its effect on consumers and producers.\r\n\r\nSuccessful brand-owners who have built and invested in creating a reputable trademark over many years view counterfeiting as a commercial plague - a threat to be fought rather than ignored.  This article discusses the particular challenges arising from the entry of fake goods into the UAE market-place, the concerns posed by such entry to fair competition and the protective measures taken by the UAE.\r\n\r\n<strong>Definition and distinction from other intellectual property rights violations </strong>\r\n\r\nThere is no single definition for counterfeiting that is universally adopted; however, for the purposes of this discussion, it could be constructively defined as ‘the unauthorized reproduction and distribution of products that are protected by intellectual property rights’.  Generally speaking, counterfeiting, like patent and copyright infringement, represents a violation of an entity’s proprietary rights.  From a consumer protection perspective, it is a particular interference with the goodwill built between the consumer and the trademark right-holder. It often involves the copying or imitation of trademarks as well as packaging, labelling or any other significant feature of the product so as to unlawfully induce an unsuspecting buyer to purchase a counterfeited product.\r\n\r\nInherent to the unlawful practice of counterfeiting is misrepresentation; it characteristically involves an attempt to defraud the public through the unauthorized use of someone else’s trademark.\r\n\r\n<strong>Industries being targeted</strong>\r\n\r\nThe UAE market-place is rapidly developing, whether through local business or through the influx of foreign direct investment, with an increasing number of entrepreneurs and international corporations seeking to do business in the Emirates.  The luxury goods industry is booming in the region, and traditionally, counterfeiters have taken advantage of this. As a leading intellectual property practice with a dedicated enforcement team, we have assisted in training government officials to curb trademark-infringing practices across a wide product range, including electronic products, computers and stereo equipment, foods, pharmaceuticals, industrial goods, parts for automobiles and boats, fertilizers, pesticides, and medical devices.\r\n\r\n<strong>Product liability and consumer protection concerns</strong>\r\n\r\nThe UAE has implemented Federal laws which defend consumer interests. These specialized consumer protection laws were discussed in the previous article in the series.  In addition, infringements against other stakeholders, such as trademark right-holders, will ultimately negatively impact the overarching purpose of consumer protection laws.  Therefore, whilst the UAE strives to further develop and protect consumer rights, it has also stepped-up its protection of IP laws that ultimately protect both the consumer and the IP right-holder.\r\n\r\nA brand-owner would have developed good-will with his customers through investing in protecting his reputation and delivering a quality product.  The registration of a trademark for a product will protect this good-will and thus become a valuable asset for the brand-owner and a quality assurance factor for the consumer.  If the trademark is properly protected, it allows both parties to receive legitimate benefits upon purchase.\r\n\r\n“Deceptive counterfeiting” whereby the counterfeited products are sold to consumers who are unable to distinguish them from authentic goods poses a particular threat to safeguarding consumer interests.  A victim of deceptive counterfeiting may attribute poor quality to the rightful trademark holder, whose reputable image is quickly tarnished. Continuous infringement of an enterprise’s legitimate IP rights through counterfeiting diminishes the incentive to invest in a particular market or product, restricts fair competition, and obstructs the safeguarding of consumer interests.\r\n\r\n<strong>Anti-counterfeiting measures by the UAE</strong>\r\n\r\nWith continuous development and enforcement of IP laws, the UAE has placed itself at the forefront of the fight to protect the consumer and IP rights.  Counterfeiters are being tackled through a number of legal mechanisms, including Federal Law No. (37) of 1992 concerning trademarks (as amended); Federal Law No. (4) of 1979 concerning the prevention of fraud and deceit in commercial dealings, and its Executive Regulations (set out in Ministerial Decision No 26 of 1984), and Federal Law No. (5) of 1985, the Civil Code(as amended).  Measures have been put in place to prevent an infringement from occurring and to preserve evidence in relation to an alleged infringement.\r\n\r\nThe provisions of the agreement on Trade Related aspects of IP Rights (TRIPS), to which the UAE is a signatory,  sets down minimum standards for many forms of IP regulation.  However, the UAE has gone further than the minimum requirements of the TRIPS agreement in providing special enforcement units that pool together their know-how to effectively fight against counterfeiting.  In 2013 around AED 35 million of counterfeited goods have been confiscated in Abu Dhabi alone by a specialized team at the Abu Dhabi Department of Economic Development.\r\n\r\nThe UAE authorities have taken prompt action against counterfeiters including the use of on-the-spot fines.  These measures aim to curb counterfeiting activities and avoid irreparable damage to both the consumer and the IP right-holder whilst seeking to mitigate the risk of evidence being destroyed.\r\n\r\nProtecting against counterfeiting practices ought to be viewed as an investment in the preservation of the reputation of the UAE as a healthy, competitive market place that seeks to protect the interests of its consumers.  The protection of intellectual property rights positively affects foreign direct investment and reassures industries within all sectors that the UAE will protect their investment and goodwill.  In our view, the proactive approach of the UAE authorities makes it one of the leading jurisdictions in the region in terms of protecting consumers against the misrepresentation inherent in counterfeiting.'),
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(89630, 4876, 'content', 'March 2014\r\n\r\n<hr />\r\n\r\nIt is also known as “Nazaha” which is an Arabic word meaning “integrity”. Nazaha aims to create a work environment of integrity, transparency, honesty, justice and equality in the bodies that fall within its jurisdiction or specialisation.\r\n\r\nNazaha was established by Royal Order A/65, issued by His Highness King Abdullah bin Abdulaziz Al Saud on 18 March 2011. Article 1 of the Royal Order indicates that Nazaha is an entirely independent authority. It reports only to the King. Article 4 of the Royal Order establishes the functions of Nazaha to encompass all public sectors with no exceptions and the competence of Nazaha to combat financial and administrative corruption.\r\n\r\nTHE SAUDI STRATEGY FOR COMBATING CORRUPTION\r\n\r\nThe Saudi Council of Ministers approved a National Strategy for Protecting Integrity and Combating Corruption (“National Strategy”). The implementation of the National Strategy is assigned to Nazaha. The National Strategy states that corruption is an international phenomenon and defines corruption as “every act that threatens the public interest as well as any abuse of the civil service in order to earn an individual advantage”.\r\n\r\nThe National Strategy adopts a broad view of corruption, which encompasses every act violating the rules and controls imposed by the system. The National Strategy justifies that broad view of corruption by recognising the several negative effects of corruption. For example, it recognises the negative effects on the process of development, the potential to divert the Kingdom from its targets, waste its resources, frustrate its process and weaken the effectiveness and efficiency of the systems.\r\n\r\nExamples of crimes falling within the above scope of corruption, pursuant to the National Strategy, are ‘bribery’, ‘making money out of power’, ‘misuse of authority’, ‘unlawful enrichment’, ‘manipulation’, ‘embezzlement’, ‘waste and misuse  of public money’, ‘money laundering’, ‘accountancy crimes’, ‘forgery’, ‘forgery of money’ and ‘commercial fraud’.\r\n\r\nThe National Strategy realises the international nature of corruption and that in many cases corruption can have cross border elements. It asserts that combating corruption is reinforced by international cooperation among countries. Such cooperation results in sustainable reformation programmes which should be appropriately implemented locally and internationally in order to reduce corruption. From this perspective, the Kingdom of Saudi Arabia signed the United Nations Convention against Corruption on 9 January 2004 and ratified the same on 29 April 2013.\r\n\r\nNAZAHA IN FOCUS\r\n\r\nNazaha is regulated by Ministerial Cabinet Regulation 165, which was issued on 2 May 2011. Article 1 of this regulation defines bodies that fall within Nazaha’s jurisdiction as all public entities in the Kingdom and companies in which the Kingdom owns no less than 25% of the capital.\r\n\r\nArticle 2 of the regulation governing Nazaha, states that Nazaha is directly linked to the King and has a financially and administratively independent juridical personality. The same article indicates that Nazaha is a neutral body and that no one is entitled to interfere in its work.\r\n\r\nArticle 3 of the regulation identifies the objectives of Nazaha to be: protecting integrity, promoting transparency and combating all forms of financial and administrative corruption. In order to fulfil such objectives, Nazaha enjoys the following competences:\r\n\r\nEnsuring the proper implementation of Public policies.\r\n\r\nInvestigating bodies that fall within its jurisdiction to reveal financial and administrative corruption regarding Public Works Contracts, Operation and Maintenance Contracts and other contracts related to public interest. Nazaha undertakes necessary procedures to ensure compliance with the applicable Saudi rules and regulations.\r\n\r\nReferring financial and administrative corruption violations to regulatory or investigative authorities as the case may be. Nazaha also reports the violator to the head of the body in which he works. It is entitled to review the ongoing procedures and investigations regarding the cases it refers and may request the competent authorities to undertake any precautionary measures against those suspected of committing corruption offences. If Nazaha determines that a violation represents an institutional dimension for the body falling within Nazaha’s jurisdiction, it refers the matter to the Saudi King in order to decide as he may deem fit.\r\n\r\nEnsuring adherence and proper application of the Saudi National Strategy for Protecting Integrity and Combating Corruption. It follows up with the various authorities regarding execution of the National Strategy.\r\n\r\nReviewing the recovery of funds and proceeds of corruption offences with the relevant authorities.\r\n\r\nEnsuring the proper implementation of the international treaties relating to corruption and to which the Saudi Kingdom is a party, in order to effectively execute the duties imposed therein. It also represents the Saudi kingdom in international venues relating to combating corruption. Nazaha collaborates with regional and international organizations concerned with combating corruption.\r\n\r\nSuggesting policies and regulations necessary to effectively combat corruption and performing regular revision to relevant regulations to decide on their sufficiency and means of improvements.\r\n\r\nIn order to enable Nazaha to perform its duties, as detailed above, Ministerial Cabinet Regulation 165 states in Articles 4 and 5 that all relevant authorities shall collaborate with Nazaha to combat corruption. Such authorities shall provide Nazaha with any required financial and administrative information. Those authorities are to present any required documents to Nazaha.\r\n\r\nThe structure set out in the Regulation has empowered Nazaha to perform its duties. Nazaha is able to positively influence the Saudi society and enhance transparency when dealing with public bodies. It was involved in numerous notable cases, and in some instances, it was able to aid the arrest of offenders in the act. For example, Nazaha helped in the arrest of a public official of the Saudi labour office while receiving a bribe amounting to SAR 120,000 (approximately AED 117,500).\r\n\r\nSince its establishment, Nazaha has had a great impact on the Saudi Kingdom and has reduced corruption levels. In January 2014, Nazaha released its annual report which revealed that within the course of 2013, it detected 306 cases of financial and/or administrative corruption by investigating 400 public projects. Nazaha has referred 30 cases to investigation authorities and Public Prosecution, 64 cases to the Minister of Health, 59 cases to the Minister of Municipal and Rural Affairs, 58 cases to the Minister of Education and 30 cases to the Ministry of Water and Electricity.\r\n\r\nStatistics show that Nazaha deals with more than 80 corruption complaints daily. Those complaints are being dealt with immediately by taking the appropriate actions. It conducts unexpected visits to bodies that fall within its jurisdiction in order to reveal instances of corruption. Nazaha uses the aid of women employees in order to reveal corruption that takes place in bodies that only deal with women. Nazaha even reported uncooperative Ministers and governmental authorities to His Highness King Abdullah bin Abdulaziz Al Saud.\r\n\r\nCONCLUSION\r\n\r\nThe above indicates how forcefully the Kingdom of Saudi Arabia deals with corruption and how eager it is to eradicate this phenomenon. That approach has made the Saudi Kingdom the 63rd country on the corruption perceptions index, compiled by Transparency International (Transparency International is an internationally recognized non-governmental organization that monitors and publicises corporate and political corruption in international development). Although Nazaha publically disapproved the ranking of the Saudi Kingdom on the corruption index and believes that the ranking does not reflect the actual levels of transparency in the Kingdom, arguing that the country should have got a better ranking, it is noteworthy that the kingdom was promoted three ranks in the 2013 index. The president of Nazaha has encouraged all public bodies in the Saudi Kingdom to periodically provide Nazaha with statistics and information in order for Nazaha to be able to demonstrate its true ranking in the 2014 index.\r\n\r\nWith offices in 7 countries across the Middle East, Al Tamimi &amp; Company is well-placed to advise clients on matters related to anti-corruption and financial crime, not just in the United Arab Emirates, but throughout the Middle East region. Al Tamimi &amp; Company’s Financial Crime Department is regularly instructed in complex, multi-jurisdictional matters related to all areas of financial crime.\r\n\r\nFor any queries relating to financial crime in the Middle East, contact the Head of Al Tamimi’s Financial Crime Department, Khalid Al Hamrani - k.hamrani@tamimi.com.'),
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(89657, 4877, 'content', 'March 2014\r\n\r\n<hr />\r\n\r\n<strong>Maintaining a Strong Market</strong>\r\n\r\nThe great property upswing of the past few years followed by the recent downturn, has caused legislators in the Kingdom of Saudi Arabia (“KSA”) to take note, and, as a result, beneficial lessons have been learned.  To safeguard against future downturns, KSA has put a framework in place intended to protect both consumers and sophisticated buyers, increase confidence in off-the-plan sales and allow developers to finance projects with draw-downs from payments by buyers.  It is hoped that a solid legal foundation will sustain long term growth in the already growing KSA real estate market.\r\n\r\nIn recent years KSA has taken a number of significant and practical steps to regulate the sale and marketing of units off-the-plan (or “on-a-map”) through the Ministry of Commerce and Industry (“MoCI”).  The objectives of this regulatory action are to:\r\n<ul>\r\n 	<li>protect the rights of buyers and developers;</li>\r\n 	<li>raise the level of transparency of quantities of supply and demand;</li>\r\n 	<li>discourage property speculation (and prevent real estate bubbles);</li>\r\n 	<li>reduce the cost of ownership of real estate units; and</li>\r\n 	<li>increase the supply of developed real estate throughout KSA.</li>\r\n</ul>\r\nAlong with the recent Real Estate Mortgage Law, the regulatory changes allow a system where local and foreign-owned developers (who are subject to foreign investment requirements not addressed here) are able to sell off-the-plan and receive progress payments from buyers in order to finance development projects, subject always to a system of checks, balances and supervision by the regulator.\r\n\r\n<strong>Licence Requirements</strong>\r\n\r\nThe Regulations for the Sale of Real Estate Units on a Map  implemented by Ministerial Decree No.983 on 2/2/1431H corresponding to 18 March 2010 (“Off-the-Plan Regulations”), require a developer to apply for a licence for each project prior to announcing any marketing or commencing sales of any commercial, industrial, office, service, tourism or residential units in KSA.\r\n\r\nAn application for a licence requires the regulator to examine (among other things) the developer’s:\r\n<ul>\r\n 	<li>safety record;</li>\r\n 	<li>feasibility study for the project;</li>\r\n 	<li>forecast costs to complete (including marketing costs);</li>\r\n 	<li>sales contract forms;</li>\r\n 	<li>development permits and approvals; and</li>\r\n 	<li>agreements with accountants, auditors, building contractors and the consulting engineer.</li>\r\n</ul>\r\n<strong>Operation of Escrow Account</strong>\r\n\r\nThe developer must provide a copy of each sale contract with a buyer to MoCI within 10 days after the contract is signed.\r\n\r\nWhether natural persons or bodies corporate, the Off-the-Plan Regulations contemplate that buyers will usually make payments by instalments during construction.  All payments by buyers must be paid into the escrow account for the project together with any financing received.\r\n\r\nMonies can only be released from the escrow account to make progress payments to the principal contractor or other consultants (including marketing and sales), provided certain conditions are met and sign-off for the payment is given by the developer, the consulting engineer and a chartered accountant.\r\n\r\n<strong>Checks &amp; Balances</strong>\r\n\r\nOnce a licence for the project has been issued, MoCI registers a marginalisation instrument (similar to a caveat) over the land to prevent dealings such as the sale, lease or mortgage of the base development land parcel.  That instrument is to be released by MoCI at the completion of the project, and before the settlement of units.\r\n\r\nAdditionally, during the project the consulting engineer must:\r\n<ul>\r\n 	<li>provide quarterly reports on the progress of construction against the programme;</li>\r\n 	<li>provide forecasts of the costs to complete to MoCI; and</li>\r\n 	<li>certify each progress claim with a certificate of achievement.</li>\r\n</ul>\r\nThe chartered accountant must submit quarterly audit reports on the receipts and expenditures and the records of the escrow account to MoCI.\r\n\r\nIn addition to reviewing the audited accounts, bank statements and construction progress and costs, MoCI also carries out site inspections of works across KSA, to ensure all is running smoothly on each project.\r\n\r\nIn the event of failure of the project, including an inexplicable failure to commence construction, a lack of seriousness in implementation by the developer or if it considers it necessary, MoCI has the right to step in and take control of a project, either bringing it to completion or liquidating it and returning funds to buyers.\r\n\r\n<strong>Sales &amp; Marketing</strong>\r\n\r\nA developer can only “launch” sales and marketing and open the escrow account once it obtains a licence for a specific project.\r\n\r\nWhilst it is an offence to carry out real estate brokerage without holding a licence under the Regulation for Real Estate Offices, it is also an offence under the Off-the-Plan Regulations to carry out marketing or brokerage (in whole or in part) of any residential, commercial, industrial, office, service or tourism units off-the-plan without a licence.\r\n\r\nIt should be noted that whilst the Regulation for Real Estate Offices does not expressly prohibit “marketing”, it is expressly prohibited under the Off-the-Plan Regulations unless a licence has been issued for the Project.\r\n\r\n<strong>Prohibitions &amp; Penalties</strong>\r\n\r\nAlthough there is a policy intent to discourage people from “flipping” property off-the-plan (i.e. by on-selling it prior to completion), there is no specific prohibition against this in the Off-the-Plan Regulations.\r\n\r\nAs you would expect, fraud, false reports to MoCI, embezzlement or collusion to deceive another, are all subject to criminal penalties, as is engaging in marketing or sales off-the-plan without a licence.\r\n\r\n<strong>Other Regulations</strong>\r\n\r\nThe Off-the-Plan Regulations are intended to apply until “the issuance of a Draft Law of Account for Real Estate Developing Security”. Whilst it is not clear when it may be released or exactly how it may add to the Off-the-Plan Regulations, it does give MoCI the opportunity to make necessary amendments to integrate with recent real estate financing (and other) legislation, where necessary.\r\n\r\nIf an off-the-plan sales contract permits, or the developer allows completion of the sale to occur prior to the final payment being made by a buyer, developers must take care to ascertain whether the Law of Sale by Instalment (and its regulations) need to be complied with.  A separate licence may be required for any such vendor-finance arrangements.\r\n\r\n<strong>Conclusion</strong>\r\n\r\nIt is now widely known that developers in KSA must be licensed to carry out sales and marketing of off-the-plan developments, and that a separate application is required for each project.\r\n\r\nAdequate time should be included in the project programme to achieve sales and marketing licensing, though some activities will obviously run concurrently with the application.  Developers should take care in providing representations to MoCI in relation to feasibilities, costs and estimates of the programme to achieve project milestones.  Similarly, developers would be wise to include in their contracts of sale an ability to extend  their estimated timeframes.\r\n\r\nDevelopers intending to use off-the-plan sales to finance projects will be keen to include progress payments by buyers under their purchase agreements as permitted by the Off-the-Plan Regulations.\r\n\r\nReal estate laws in KSA continue to develop in sophistication. Safeguards now in place increase confidence and certainty for both developers and buyers off-the-plan for all real estate asset classes in the Kingdom of Saudi Arabia.'),
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(89676, 4878, 'content', 'March 2014\r\n\r\n<hr />\r\n\r\nThe recent award to Dubai as host city for the Expo 2020 has reinforced the general global interest in the Emirate, and this in turn supports the industry as it continues to go from strength to strength.\r\n\r\nAccording to Dubai Economic Department, Dubai will need to double its hotel supply to accommodate the anticipated 20 million visitors it expects by 2020.\r\n\r\nTo support the continued growth, His Highness Sheikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of the United Arab Emirates and Ruler of Dubai, has issued a series of directives to enhance and streamline hotel investment and development in Dubai.\r\n\r\nThese directives range from streamlining approval processes for hotel development with Dubai Municipality, to allocation of government land for development of 3 and 4 star hotels in Dubai, with exemptions on rezoning fees and some Municipality fees for a period of time.  We are awaiting the release of further detail in respect of these directives, and will be reporting on them as soon as the information becomes available.\r\n\r\nAdditional new initiatives announced have introduced regulation on holiday home letting, and imposed a new ‘Tourism Dirham’ fee.\r\n\r\n<strong>A. LICENSING OF HOLIDAY HOMES </strong>\r\n\r\nDecree No. 41 of 2013 concerning the Regulation of the Holiday Homes Rental Market in Dubai (“New Decree”) was issued on 24 November 2013.\r\n\r\nLetting of holiday homes is now regulated by the Department of Tourism and Commerce Marketing in Dubai (“DTCM”) by virtue of the New Decree.\r\n\r\nApplicants (whether a natural person or corporate entity) are required to obtain a license from DTCM and comply with DTCM’s requirements as set out in the New Decree. The New Decree extends to all parts of Dubai, including special development zones and free zones including the Dubai International Financial Centre (“DIFC”).\r\n\r\nArticle 7 of the New Decree provides that the license term issued by DTCM will be for 1 year, renewable on similar terms. (DTCM does have the authority to approve an extended license term up to a maximum of 4 years upon the applicant’s request). The fees payable for the license will be determined by DTCM and have not been set out in the New Decree.\r\n\r\nDTCM shall classify all holiday homes into 2 categories namely, deluxe or tourist class (in accordance with classification criteria to be issued by DTCM), and has powers of inspection of the accommodation to ensure it meets the classification criteria.\r\n\r\n<strong>DTCM Powers</strong>\r\n\r\nDTCM will exercise its powers and tasks through officers appointed by DTCM’s Director General in coordination with the Director General of Dubai Government’s Legal Affairs Department. Such officers shall be entitled to inspect holiday homes, access records and draw up reports as required.\r\n\r\nDTCM’s powers are summarized as follows:\r\n<ol>\r\n 	<li>Establish technical conditions, requirements and standards required for holiday homes in conformity with the best international practices;</li>\r\n 	<li>Consider license and license renewal applications;</li>\r\n 	<li>Determine duties and obligations of license holders;</li>\r\n 	<li>Supervise license holders under the New Decree and resolutions passed by DTCM in this regard;</li>\r\n 	<li>Monitor and inspect holiday homes to ensure fulfillment of and compliance with DTCM requirements;</li>\r\n 	<li>Handle complaints received against license holders or unlicensed individuals/entities involved in the business of providing holiday homes and take all necessary courses of action;</li>\r\n 	<li>Impose penalties for violation of the New Decree and other resolutions passed by DTCM in this regard;</li>\r\n 	<li>Create a database of license holders and holiday homes in Dubai;</li>\r\n 	<li>Establish a register containing documented data on holiday homes;</li>\r\n 	<li>Any other task deemed necessary.</li>\r\n</ol>\r\n<strong>Obligations of a Licence Holder</strong>\r\n\r\nA license holder must comply with the following rules and obligations:\r\n<ol>\r\n 	<li>Comply with all relevant laws including DTCM issued resolutions;</li>\r\n 	<li>Maintain paper and electronic records in respect of the holiday home operations and provide access to DTCM employees upon request;</li>\r\n 	<li>Maintain insurance as per DTCM-specified requirements for the entire license term;</li>\r\n 	<li>Participate in the electronic program of hotel and tourism establishments as per Decree No. 13 of 2011;</li>\r\n 	<li>Provide accurate data on the holiday home and its classification;</li>\r\n 	<li>Respond to DTCM complaints within set time limits;</li>\r\n 	<li>Maintain a notice with details of the DTCM-granted license and classification of the holiday home within the premises of each holiday home;</li>\r\n 	<li>Provide regular maintenance services to the holiday homes;</li>\r\n 	<li>Provide electricity and water services to the customers at no additional cost;</li>\r\n 	<li>Hire of holiday homes on a daily, monthly or annual basis;</li>\r\n 	<li>Hire the whole, and not part only, of the holiday home (ie. it is prohibited to rent rooms or beds);</li>\r\n 	<li>Not to act as an intermediary between customers and any unlicensed entity undertaking letting of holiday homes;</li>\r\n 	<li>Provide data, documents and statistics to DTCM upon request;</li>\r\n 	<li>Notify DTCM of any change of information;</li>\r\n 	<li>Comply with any other obligation that may be imposed by DTCM.</li>\r\n</ol>\r\n<strong>Sanctions</strong>\r\n\r\nArticle 11 of the New Decree provides that any violation of its provisions, or of any resolution issued by DTCM in respect thereof, may result in a fine ranging from AED 200 to AED 20,000. The fine amount would double in the event of a repeat violation within one year, subject to a maximum cap of AED 100,000.\r\n\r\nIn addition to fines, DTCM is also entitled to issue warnings, suspend a license for a maximum period of 6 months or cancel the license of the violator. The violator may submit a written application to DTCM for reactivation of its license after the lapse of 1 year from cancellation date.\r\n\r\n<strong>Status</strong>\r\n\r\nThe New Decree has not yet been published in the Official Gazette and will come into effect upon the date which is 3 months from the date of such publication.\r\n\r\nPlease note that Article 16 of the New Decree requires that all persons and entities conducting the business of holiday home lets in Dubai, must reconcile with the New Decree and the conditions imposed by DTCM within 3 months from the effective date of the New Decree.\r\n\r\n<strong>B. TOURIST DIRHAM</strong>\r\n\r\nTo assist in raising funds for the international promotion and marketing of Dubai and to strengthen Dubai’s position in line with best practices within the international tourism industry, Executive Council Decision No. 2 of 2014 was issued, approving the Tourism Dirham in Dubai.\r\n\r\nThe Tourism Dirham is a minimum charge to be applied to hotel guests staying in any type of hotel ‘establishment’ (including hotels, holiday homes, serviced apartments and guesthouses).  The fee will be levied per occupied room night and shown as a separate line item in the tourist’s bill. The Municipality charge and the service charge will not be levied on the Tourism Dirham fee.\r\n\r\nThe fee will be introduced from 31 March 2014 and ranges from AED 7 per occupied room per night (for a guest house and 1 star/budget hotel) to AED 20 per occupied room per night (for a 5 star or higher rated hotel or resort and a deluxe hotel apartment).  There are various different fee amounts which are dependent on the classification of hotel establishment, and various different violations included, for which a fine may be levied.\r\n\r\nWe hope to be able to provide you with further information on the other initiatives recently introduced in the next issue of our Law Update.\r\n<div></div>'),
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(89691, 4879, 'content', 'March 2014\r\n\r\n<hr />\r\n\r\nSports scandals seem to be reported with increasing regularity. As soon as the dust settles on one scandal, another breaks. In reality, there have always been scandals associated with sports and every sport has its fair share. Sports stars are now seen as global icons and such icons are always vulnerable to the trappings of success.\r\n\r\nWe live in a time where sports sponsorship is a multi-billion dollar industry, so it is no laughing matter to a sponsor where its sponsored star is caught in an embarrassing and compromising situation. To a sponsor, this could be very damaging to its brand, which may have taken years to develop. In an age where news stories are released instantly around the world by reporters and ordinary members of the public through social and regular media, sponsors are increasingly conscious of situations where their brand or image may be damaged as a result of alleged or actual misconduct of a sponsored athlete or team.\r\n\r\nWe have seen examples in recent years where sponsors have reconsidered their association with a team, athlete or organisation in the wake of a scandal. After Lance Armstrong’s admission to taking performance enhancing drugs through his career, his sponsors left him in droves. Tiger Woods lost high profile sponsors following the revelation of his extra marital indiscretions. Puma recently ended their association with the South African Football Association after FIFA found that there was compelling evidence that the South Africa national team had fixed some football matches in 2010.\r\n\r\nThe UAE now has a very large sports market and hosts an increasing number of international sporting events. Sponsorship is also increasing within the UAE and this article examines how sponsors can try to protect themselves in a sponsorship agreement from the fall out associated with a scandal involving an athlete or a team.\r\n\r\n<strong>TERMS IN AN AGREEMENT</strong>\r\n\r\nUnder the UAE’s Commercial Transactions Law  (“CTL”), the parties to an agreement are generally free to agree terms provided that those terms do not contradict mandatory terms set out elsewhere in the CTL. Therefore, although the UAE is a civil law jurisdiction, it is possible to include contractual terms within a sports sponsorship agreement governed by UAE law that are more frequently found in common-law based agreements.\r\n\r\n<strong>Morality Clauses</strong>\r\n\r\nMorality clauses are a familiar feature in common-law based sponsorship agreements. There is no reason why such clauses cannot be included in UAE law governed agreements and  the sponsor should give consideration to including these clauses. Morality clauses are commonly drafted to require an athlete to comply with the rules of their sport and refrain from carrying out acts which would bring their sport, their name or the name of the sponsor into disrepute.  Examples of such acts include being involved in doping offences, match fixing and moral issues such as infidelity, gambling, drug addiction and other types of behaviour which could damage the image of a sponsor’s brand. The meaning of morality in these clauses is not defined in absolute terms by religion or society but instead, it is market driven by commercial concerns of a sponsor and its own “ethics”. Morality clauses are often found in sponsorship agreements relating to individual athletes as opposed to team sponsorship agreements as it is invariably more difficult for a club to control the actions of the entire team.\r\n\r\nUnder English law, if a morality clause is vaguely drafted, it runs the risk of being unenforceable as it could be held to be uncertain. Under UAE law, if wording in the agreement is clear, “it may not be departed from by way of interpretation to ascertain the intention of the parties ”. Further, it is not possible to construe ambiguous words in a manner detrimental to the interests of the adhering party.  Therefore, morality clauses ought to be clearly drafted whereby both parties fully understand their implications. In a UAE law agreement, a morality clause could also include and define cultural considerations which a foreign athlete may otherwise be unaware of but which could adversely affect the sponsor if not observed. For example, a morality clause could address how an athlete should dress and behave in public taking into account local sensitivities. When drafting such clauses, sponsors should take into account particular risks associated with an athlete and its sport.\r\n\r\nAlthough this article mainly considers how the sponsor can best protect its position, if acting for an athlete, consideration can be given to the inclusion of a “reverse morality” clause. This is where an athlete itself may seek redress against a sponsor because of the acts of a sponsor. For example if a corporate sponsor is involved in a high profile fraud which impacts on the reputation of the sponsored athlete, the athlete would want to ensure that it can terminate the agreement or rely on other remedies in such a situation.  Reverse morality clauses are more likely to be included in agreements where the athlete has a very close relationship with the sponsor and the sponsor and athlete are synonymous with each other.\r\n\r\n<strong>Representations and Warranties</strong>\r\n\r\nSponsors should also consider including adequate representations and warranties in an agreement whereby the athlete or team as applicable, has made all disclosures to the sponsor in relation to any circumstances that may adversely affect the sponsor. A host of sponsors relied on certain warranties given by Lance Armstrong that he did not take performance enhancing drugs when terminating their agreements with him in the wake of the now notorious doping scandal.\r\n\r\n<strong>Term </strong>\r\n\r\nA sponsor can potentially limit its exposure to potential damage to its brand by entering into short term agreements. For example, if an athlete committed an act, which the sponsor felt, allowed it to terminate an agreement, the situation giving rise to the breach may not always be clear cut and the sponsor may have to prove that the athlete is in breach. This could result in a drawn out and potentially costly process. If the sponsor has entered into a short term agreement, it may be easier for it to see out the term if the term is coming to an end anyway. Short term agreements may not always be to the liking of all sponsors as many sponsors would want to tie in with an athlete for a longer period to prevent the athlete from upwardly renegotiating his/her fee after a short period of time. Commercial considerations would also play a part in the sponsor’s decision. In order to find a middle ground, it may be desirable to include a break clause in the agreement after the expiry of a certain term.\r\n\r\n<strong>Dispute Resolution</strong>\r\n\r\nIn relation to UAE law sponsorship agreements, it is important to consider whether the courts should have jurisdiction to resolve a dispute or whether the matter be referred to arbitration. This should be looked at in relation to each set of circumstances and the ability of either party to enforce any decision of a court or tribunal. However, in relation to high profile sponsorships, arbitration may be more appropriate. In arbitration, a panel of arbitrators can be appointed who have particular experience in resolving sport related disputes and who also understand the level of damages to be awarded. It is worth noting that the UAE is a party to the New York Convention on the recognition and Enforcement of Foreign Arbitral Awards. Where there is a clear sporting element involved in the breach, such as non-compliance with anti-doping laws, existing sports tribunals could play a role.  For example, Abu Dhabi is set to become one of only four cities in the world to host international sport-related legal disputes with the launch of an international Court of Arbitration for Sport (“CAS”). The opening of the new CAS base could see the UAE capital become a regional hub for sports-related disputes. CAS is headquartered in Lausanne, Switzerland with courts also located in Sydney and New York. CAS hears any sport related disputes, including commercial (e.g. sponsorship or issues arising in relation to a player’s employment contract) and discipline (e.g. doping) cases.\r\n\r\n<strong>Remedies</strong>\r\n\r\nSo what remedies are available to a sponsor for breach of an agreement (including a breach of the morality clause)?\r\n\r\nTermination of the agreement is the obvious remedy and it should be remembered that termination clauses need to be carefully drafted to try to ensure that they can be relied upon under UAE law without requiring a separate court order.\r\n\r\nTermination of an agreement may not always be the best solution and commercial considerations play a part in deciding whether to exercise this right. It is advisable to include terms that give the sponsor a certain amount of control in deciding what to do in a situation where there is a breach by the athlete or team. Despite recent high profile examples of sponsors terminating agreements, it is still relatively rare for sponsors to exercise termination rights. Sponsors may decide to stick by an athlete for a variety of reasons, including commercial gain and any actual harm to its brand. It is important to include a combination of different remedies in an agreement. It is possible to give the sponsor the right to impose fines or suspend or withhold payment or even include conditions where the athlete repays sponsorship monies in certain situations.\r\n\r\nA staged payment mechanism can also be included in an agreement where specified payment is released upon the athlete meeting certain milestones. This can be a useful tool for the sponsor as it helps to avoid the uncertainty involved in making a claim for damages, as further discussed below.\r\n\r\nSuitable indemnities may also be added. Under UAE law however, a court has the discretion to reduce the amount of indemnity to reflect the extent to which the party relying on the clause caused the loss to be indemnified.\r\n\r\nThere is now an increasing tendency for sponsors to require athletes to disclose any material issues as soon as possible, so that the sponsor is able to manage any fall out, more effectively with the media and mitigate any adverse implications on its brand. Various obligations affecting the athlete can therefore be built into a sponsorship agreement. In addition, the sponsor may also want the right to require the athlete to cooperate with the sponsor in order to manage any scandal. For example, it may want the athlete to make an approved public apology or statement and these have become common upon the breaking of a scandal.\r\n\r\n<strong>Damages</strong>\r\n\r\nWhere loss has been suffered by a sponsor as a result of a breach, the sponsor may have a claim for damages. Under UAE law, there are provisions in the Civil Code  which states that the “the right to have damages made good shall include moral damage, and an infringement of liberty, dignity, honour, reputation, social standing or financial condition of another shall be regarded as being moral damage”. In theory, even without a morality clause within a sponsorship agreement, it would appear that there is some scope for the UAE courts to award damages in relation to “moral damage”. However, the term “moral” in this respect is driven by moral standards determined by society in the UAE taking into account customs and religion and therefore may not be specific or cover every scenario which a sponsor may wish to be addressed.\r\n\r\nIn the UAE, a claim for damages is not always straightforward. It can be difficult to quantify the level of damages that a sponsor may have suffered as a result of an athlete’s breach of an agreement or otherwise. It is likely that in such a scenario, the UAE court will want to appoint an expert to assess such damages and this could be a costly, lengthy and uncertain process. A liquidated damages clause can be included in a contract which sets out a certain sum to be paid by the athlete in the event of specified breaches of the agreement. However, the UAE courts have discretion to vary agreements that fix compensation and award compensation reflecting actual loss.\r\n\r\n<strong>CONCLUSION</strong>\r\n\r\nAs is the case with all commercial agreements, the ability to include all desirable protections depends, to a large extent on the relative bargaining power of the parties. Hopefully, the brief analysis above shows that blindly walking into sports sponsorships can be hazardous to a sponsor’s health. If possible, it is also recommended that the sponsor carry out some form of due diligence on the athlete or team. However, due diligence is never a perfect science and the sponsor may not always be in a position to carry out any (or sufficient) due diligence as some athletes or teams may have significant bargaining power and find the process to be invasive. However, as discussed above, there is legal protection available which can be included in a UAE law governed contract to protect sponsors from scandalous sports stars. Commercial factors have a huge part to play in sports sponsorship agreements and therefore a combination of remedies and protections can be extremely beneficial to the sponsor.'),
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(89706, 4880, 'content', 'March 2014\r\n\r\n<hr />\r\n\r\nThese rules do not always lend themselves to convenient application in a sophisticated IT procurement context, where the subject goods and services may be software licences and software implementation services, rather than bridges and road building expertise. In this article we outline some considerations that IT service providers should be aware of when seeking to contract with local government entities in the emirates of Abu Dhabi and Dubai, as well as at a UAE federal government level.\r\n\r\nWe regularly work with IT service providers bidding to supply software and services to local and federal government entities in the UAE, or negotiating the terms of government contracts they have already been awarded. Such service providers, especially the foreign entities, are often unaware of local government procurement rules that prescribe specific requirements for contracts entered into by government entities. As a result, a lot of time and effort is spent on trying to negotiate points that are basically ‘not negotiable’, pursuant to local law. It is essential that IT service providers contracting with government entities in the UAE take into account the relevant government procurement laws, so as to properly manage their own expectations and commercial risk.\r\n\r\nAt a federal level, the UAE Federal Government Contracts Regulations set out requirements for contracts to be executed with the UAE federal government. The procurement laws of other emirates are - to a degree - similar to the federal law, covering the same types of points, although not always in the same way. The Law of Contracts of Government Departments in Dubai relates to contracts with the Dubai government, and the Abu Dhabi Law of Purchases, Tenders, Bids and Warehouses relates to contracts with the Abu Dhabi government. Local procurement rules may apply in the other emirates of the UAE, namely Ajman, Fujairah, Ras al Khaimah, Sharjah and Umm al Quwain.\r\n\r\nDetermining whether an entity is subject to local government procurement rules (and, if so, which government procurement rules will apply) is an important preliminary step. In some instances, whether an entity is a government entity is not readily apparent, and there may be government-related entities to which exemptions from the relevant government procurement laws apply.\r\n\r\nIt is not uncommon for local government procurement rules to prohibit the award of a contract to a foreign company unless such foreign company is partnered with a UAE national. Foreign companies may be required to establish joint ventures with UAE nationals so that they can participate in public tenders. Exceptions may apply where the government is in dire need of the subject product or services, and no suitable alternative can be supplied by local companies.\r\n\r\nTender bids and performance guarantees are typical in a government procurement context. The minimum amounts of such bids or guarantees, and the length of time for which they may be retained, are generally prescribed by law. Similarly, the release triggers may be prescribed by law, and there may be limited scope to vary these requirements.\r\n\r\nIn some instances, local government procurement rules require that the governing law of the contract be the local law of the relevant government entity, and that local courts within such government entity’s jurisdiction have exclusive jurisdiction over disputes. It may not be possible for a government entity to agree to arbitration, or to agree to arbitration outside its own jurisdiction, without explicit approval from the relevant ruler – and this may be very difficult to obtain in practice.\r\n\r\nSome government procurement rules require that the government entity be entitled to vary the quantities to be provided, within a certain percentage range, at the same prices as initially contracted. This type of provision seems more applicable in the context of a contract for physical goods, and while it may be possible to apply this approach in some IT contracting scenarios, it is not likely to be of broad application.\r\n\r\nThere may be provisions that permit the government entity to withdraw a project from a service provider if the service provider is late in commencing work, or if the service provider delays a project to the point where the government entity becomes concerned that the agreed timeframe will not be met.\r\n\r\nThese examples provide a snapshot of the types of issues that may need to be considered more closely in the context of contracting with UAE government entities. IT vendors and service providers – in fact, any businesses looking to contract with government entities in the UAE, or elsewhere in the region - would be well-advised to make sure that their contracts have been considered with local government procurement rules in mind.\r\n\r\nAl Tamimi &amp; Company’s Technology, Media &amp; Telecommunications team regularly advises on local government procurement considerations in the context of technology, telecommunications and media related transactions. For further information, please contact n.oconnell@tamimi.com.'),
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(89729, 4881, 'content', 'March 2014\r\n\r\n<hr />\r\n\r\nBorn in Lebanon but raised in Canada, Ahmad originally had his sights set on becoming an engineer. “The majority of Arab parents wish their children to become either engineers or doctors”, he laughs.  The middle child and only son, Ahmad and his family – mum, dad and four sisters – moved from Lebanon to Miami in the US when he was 10 years old.  After a year in the states, the family decided on another move to Canada where they settled in Montreal, Quebec.\r\n\r\nWhilst two such big moves could have been quite an upheaval for a young child, Ahmad credits the support of his family at the time and says he found it all ‘a rather exciting adventure’.  “I am so thankful to my family for everything,” he says.  “My parents, through their love of Arabic poetry and literature, encouraged me to never lose touch with my roots and my older sisters were an inspiration to pursue my engineering career.  I, in turn, then encouraged my younger sisters to pursue their passion for careers in law.  We are a very close family”, he smiles.\r\n\r\nMoving to the Francophone province of Quebec meant another challenge for young Ahmad – learning to speak the language.  With his mother-tongue language of Arabic and English as his second language, schooling and the participation in summer courses soon saw Ahmad add French to his language repertoire.\r\n\r\nIt was during his high school studies that Ahmad first developed an interest in the law.  “I used to go to the courts after school and sit in the public gallery to listen to the lawyers”, he recalls.  “I found it fascinating and it was so exciting listening to them arguing their cases.  I also had a passion and curiosity for sciences and engineering. The library I built before starting university was a mosaic of sciences and law”.  Nevertheless, he continued on his chosen path to become an engineer and completed his bachelor’s degree in Computer Engineering at the University of Montreal.\r\n\r\n“Once I had completed my engineering degree, my love for the law was still there and so I wanted to see if there was a way of combining the two” says Ahmad.  Combine he did, as he embarked on an ambitious course of full-time study for not one but two degrees – a Master’s in Electrical Engineering and a Bachelor’s degree in Civil Law.  Whilst studying, Ahmad also managed to fit in engineering internships at Motorola and the Canadian Space Agency and also occupied a research assistant position in IP and technology law at the Research Center in Public Law – University of Montreal.\r\n\r\nHaving realised that IP law was the ideal field in which he could merge his engineering skills with his passion for the law, Ahmad was admitted to the Bar of Quebec in 2006 and embarked on his first legal role as a patent specialist at a large Canadian law firm.  He spent two years there before becoming legal counsel at Hibe, a Canadian internet &amp; social media corporation, where he drafted, filed, prosecuted and managed patent applications and trademark applications worldwide.\r\n\r\nAhmad’s next role was as a patent specialist, lawyer and trademark agent for an IP firm in Montreal.  His role provided many opportunities for travel to the Middle East, where he visited agencies and law firms to strengthen ties and promote the services his firm could offer. “The fact that I was a western-educated lawyer and engineer who could speak Arabic definitely was a huge advantage” says Ahmad.  “A lot of patent related work was referred to me in Canada by Middle Eastern inventors and companies and my greatest joy was when I was assisting them protecting their innovations originating from this region...  I was also impressed by the knowledge and innovation there ”.\r\n\r\nIt was during this time, as his career was going from strength to strength, that Ahmad’s personal life was also flourishing and he met and married his wife, Carine, a psychologist also Canadian of Lebanese origin. Whilst deciding on where in the world to settle and supportive of her husband’s interest in the Middle East, Carine encouraged Ahmad to look at opportunities in the region. “We felt a strong sense of ‘being at home’ in the Middle East despite us both having been away for a long time.  There is so much potential in the region and I really wanted to be able to contribute to its development”, says Ahmad.\r\n\r\nIn preparation for his move to the region, Ahmad decided to complement his civil law background with a Common Law degree and attended school in the evenings whilst working full time.  Ahmad completed his Common Law degree in 2011 and shortly after, he and his wife left Canada and moved to the UAE, where he joined a law firm in Dubai managing their Patents team.  Ahmad says he ‘loves living in Dubai’ and thinks this is one of the most promising places in the world.  “Dubai is the perfect marriage between East and West”, he says.  “The diversity here adds to the richness of the country and has built what Dubai is today”.\r\n\r\nWhilst happy to be in Dubai, Ahmad felt that there was still more he could do in order to feel as though he was achieving his dream of ‘fostering innovation in the region’.  “I truly believe in the potential here and wish to see a renaissance of the golden era of science in the Middle East, particularly the Gulf region”, says Ahmad and so he did not hesitate when the opportunity arose to join Al Tamimi &amp; Company.  “Al Tamimi is the leading law firm in the Middle East and I immediately felt that the environment and culture at the firm fit with my expectations.  The Firm is the perfect embodiment of the belief that ‘you can’t achieve external success without running successfully inside”, he says.  “With the support of a great team, the Firm’s excellent reputation throughout the region and its unrivalled contacts at universities, leading businesses and with the authorities, I finally feel as though I am in a position to achieve what I came here to do – and that is to contribute and enhance the process of developing knowledge and innovation in the Middle East”.'),
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(89744, 4882, 'content', 'March 2014\r\n\r\n<hr />\r\n\r\nAs in other GCC states, family owned and managed businesses contribute significantly to the economy of Qatar. Families in Qatar participated in the economic boom and have accumulated significant wealth and financial power.\r\n\r\nYet this wealth can be lost when families are confronted with a succession crisis or when there has been a failure to train and prepare the next generation for the transition of the family business.\r\n\r\nFamily business restructuring is therefore a cornerstone consideration for families in business. The key is developing an institutional structure which enables the family business to survive over generations. This is known as “conversion”.\r\n\r\nThere is no single correct answer as to when and how to approach family business conversion; however, experience has shown that it is a necessary precondition for most family businesses to survive and flourish.\r\n\r\nSuccessful conversion can:\r\n<ul>\r\n 	<li>consolidate family assets;</li>\r\n 	<li>allow specialisation in the running of businesses and management of assets; and</li>\r\n 	<li>engage family members in the active management of the business within sound governance framework.</li>\r\n</ul>\r\n<strong>What is conversion from a family business into an institution?</strong>\r\n\r\nThe conversion process essentially involves taking a business that is owned, managed, and controlled by the patriarch (or the original founders’ generation), and transforming it into a fully fledged corporate structure. This process involves consolidating collective family assets and managing them using institutional practices, whilst sharing ownership and management amongst family members.  The ultimate objective is to grow and preserve the family wealth.\r\n\r\nThere are a range of legal issues involved in attaining these desirable objectives, starting from designing a legal roadmap, right up to implementation of the restructuring of all assets under the stewardship and governance of selected (or elected) family stakeholders.\r\n\r\n<strong>What legal form will the business take?</strong>\r\n\r\nOften families operate their businesses and manage their assets though diverse entities, or a “sole proprietors” structure. Once the conversion decision is made, the appropriate legal form for the business (typically within a corporate holding structure) must be carefully crafted to allow horizontal, vertical and specialised growth. The conversion process should also allow machinery to accommodate potential future investment into the business without distorting or diluting the ultimate family holding and governance structure.\r\n\r\nCompany forms most commonly used are limited liability companies and private joint stock companies.  If implemented correctly, these structures can eliminate or at least reduce the need for stakeholders to offer personal guarantees to banks.\r\n\r\n<strong>How will the business be managed?</strong>\r\n\r\nWho from the family will lead the business? How will they be chosen? And why?\r\n\r\nAll these issues require a considered family document. The document may take the form of shareholders’ agreement or a family constitution.\r\n\r\nA family constitution can also be useful to record, reinforce and promote the family values and visionary insights of the original founding generation or the patriarch.\r\n\r\n<strong>Why is corporate governance a must?</strong>\r\n\r\nThe term ‘corporate governance’ is overly used and is often a slogan. Nevertheless, sound corporate governance remains a key component of a successful conversion process because it can ensure the business is properly managed on an institutional basis with built-in checks to guard against breaches and errors.\r\n\r\n<strong>Is conversion Sharia’h compliant?</strong>\r\n\r\nConversion of a family business can often be viewed, quite wrongly, as inconsistent with sharia’h inheritance rules. In fact, full sharia’h compliance is readily achievable with the right advice, and if required your lawyers can work together with learned scholars to ensure this outcome. Such advice is needed before and during the conversion process to ensure that the outcome is sharia’h compliant.\r\n\r\n<strong>Jurisdiction and governing law issues</strong>\r\n\r\nFamily assets are often located across many jurisdictions.  Accordingly, legal input on the conversion and structuring considerations in the respective jurisdictions is required, along with appropriate tax advice.\r\n\r\nQatar is a civil law jurisdiction but it also incorporates the Qatar Financial Centre legal regime which can assist in adopting a hybrid civil and common law approach.  Such an approach, if carefully designed to respect the governing law, will allow the conversion process to benefit from common law concepts and documents not typically available under civil law regimes.\r\n\r\nUnderstanding enforceability under Qatari law is vital for a successful conversion process capable of surviving the transfer between generations.\r\n\r\n<strong>Conclusion</strong>\r\n\r\nIt is our view that conversion, as described in this article, is no luxury -  it is essential for a family business to flourish and endure. This transition is not only necessary to grow and preserve family wealth, but also to position Qatari families to contribute even more effectively to the rapid economic progress Qatar is now experiencing.\r\n\r\n<em>This article first appeared in The Edge magazine – February 2014</em>'),
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(89761, 4883, 'content', 'March 2014\r\n\r\n<hr />\r\n\r\nA number of encouraging facts such as the young population, stable security situation, plentiful natural resources, investment opportunities, banking regulations, universities, and airports make the northern gateway to Iraq, the Kurdistan Region, one of the fastest growing economies in the world. From a legal and practical perspective, the Investment Law in the Kurdistan Region of Iraq No. 4 of 2006 (the “Investment Law”) is the key motive behind the rapid development in this area.\r\n\r\nThe aim of this article is to outline the main aspects of the Investment Law, with a particular emphasis on the attractive incentives offered to foreign investors.\r\n\r\n<strong>Treatment of the Foreign Investor </strong>\r\n\r\nForeign investors and capital are treated on an equal footing with national investors and capital. As Iraqi law does not allow for foreigners to own land in Iraq, the Investment Law creates a significant privilege at Article 3 by granting total ownership of project lands for foreign investors, though they may not own land containing oil, gas or mineral resources.\r\n\r\n<strong>Exemptions for Foreign Investors</strong>\r\n\r\nThe following is a list of exemptions granted to foreign investors under the Investment Law:\r\n<ol>\r\n 	<li>The project shall be exempted from all non-customs taxes and duties for a period of 10 years from the production commencement date or offer of services.</li>\r\n 	<li>Vehicles, instruments, equipment and imported machines for the project shall be exempted of taxes, duties, and import license requirements, provided they are imported through the border crossings of the region within two years from the date of the approval granted by the Chairman of the Investment Board in the Region (the “Board”), and are used exclusively for the purposes of the project.</li>\r\n 	<li>Spare parts imported for the project shall be exempted from taxes and duties provided their value is not more than 15% of the project costs.</li>\r\n 	<li>Machinery and equipment needed for the expansion, development, or modernization of the project shall be exempted from taxes and duties as well.</li>\r\n 	<li>Raw materials needed for production shall be exempted of customs duties for a period of five years, provided the types and quantities of these materials are determined by the Board, while giving priority to the use of locally available raw materials that are suitable for the investment project in quantity and quality.</li>\r\n 	<li>The investor may, in accordance with the provisions of the Investment Law, import all that is needed for the project, including machinery and equipment. These imports shall be exempted of all customs duties provided they enter through the border crossings of the region and are used exclusively for the purposes of the project.</li>\r\n 	<li>The Board may, for the requirement of the public interest in the region, grant additional incentives and facilities to investment projects that are licensed under the provisions of this law and that enjoy one of the following two characteristics in accordance with the rules set by the board for this purpose:</li>\r\n</ol>\r\n<ul>\r\n 	<li>\r\n<ul>\r\n 	<li>\r\n<ul>\r\n 	<li>\r\n<ul>\r\n 	<li>\r\n<ul>\r\n 	<li>Projects that are established in the less developed areas of the region.</li>\r\n 	<li>Joint projects by national and foreign investors.</li>\r\n</ul>\r\n</li>\r\n</ul>\r\n</li>\r\n</ul>\r\n</li>\r\n</ul>\r\n</li>\r\n</ul>\r\n8. The Board may grant service investment projects that are established in accordance with the provisions of the Investment Law (according to their nature, especially hotels, hospitals, tourist cities, universities and schools) additional exemption of duties on their purchases of furniture, furnishings and other items for the purposes of modernization and renewal once every three years, provided they are imported into the region and used exclusively in the project within one year from the issuance of the approval of the list of purchases and their quantities by the Chairman of the Board.\r\n\r\n<strong>Legal Guarantees for the Foreign Investors</strong>\r\n\r\nThe Investment Law provides the following legal guarantees for foreign investors:\r\n<ol>\r\n 	<li>Investors may insure their investment project with any foreign or national insurance company that they consider suitable. This includes insuring all aspects of the investor’s operations.</li>\r\n 	<li>Investors may employ the necessary local and foreign manpower for the project, while giving priority to local manpower in accordance with the existing laws in the region.</li>\r\n 	<li>Investors are allowed to transfer the profits of, and the interest on, their capital abroad in accordance with the provisions of the Investment Law.</li>\r\n 	<li>Non-Iraqi employees in the project and those dealing with them outside of the region shall have the right to transfer their dues and wages abroad in accordance with existing laws.</li>\r\n 	<li>Investors may return capital abroad upon the liquidation or disposal of the project as long as this does not contradict with the provisions of existing customs and tax laws and procedures.</li>\r\n 	<li>Investors may transfer their investment wholly or partially to another foreign investor or national investor or concede the project to a partner with the approval of the Board. The new investor replaces the previous investor in the rights and obligations evolving from the project.</li>\r\n 	<li>Investors may open, in the interest of the licensed project and in accordance with the provisions of the Investment Law, bank accounts in national or foreign currency, or both, with banks inside and outside the region.</li>\r\n 	<li>Taking into consideration the existing laws concerning the boards of directors of shareholding companies, projects that are registered in accordance with the provisions of the Investment Law shall be considered private sector projects, irrespective of the legal form or nature of the funds participating in it.</li>\r\n 	<li>Investors shall enjoy the right to maintain the secrecy of technical and economic information pertaining to their project, as well as investment enterprises in accordance with the provisions of the existing laws, rules and regulations in the region. Whoever discloses any information that is in their possession by virtue of their post relating to the investment enterprise and the technical, economic, or financial aspects of the project under the Investment Law, may be subject to punishment.</li>\r\n</ol>\r\n<strong>Supremacy of Kurdistan Region Laws and Dispute Resolution</strong>\r\n\r\nAccording to the Investment Law, investment disputes shall be settled in accordance with the contractual terms agreed to by the parties. If there is no clause in it for this purpose, the dispute will be settled cordially. In the event that cordial settlement is impossible, the two sides may resort to arbitration, the provisions of which are stated in existing laws in the region or in accordance with the provisions for the settlement of dispute that exist in any of the international or bilateral agreements to which Iraq is a signatory.\r\n\r\nHowever, investors need to be aware that the laws of the Kurdistan Region have supremacy over the federal Iraqi laws and the international or bilateral agreements to which Iraq is a signatory, save for a limited number of matters detailed at Article 110 of the Iraqi Constitution (such as foreign policy and citizenship). Article 115 of the Federal Iraqi Constitution states that ‘All powers not stipulated in the exclusive powers of the federal government belong to the authorities of the regions and governorates that are not organized in a region. With regard to other powers shared between the federal government and the regional government, priority shall be given to the law of the regions and governorates not organized in a region in case of dispute’. Therefore the provision of the Investment Law in Kurdistan Region shall be applicable, and it is considered best practice to state that ‘Kurdistan Region Laws’ are the applicable laws rather than ‘Iraqi Laws’.\r\n\r\n<strong>Conclusion </strong>\r\n\r\nAfter decades of wars, economic sanctions, and devastation, Iraq, including the Kurdistan Region, needs a positive climate which supports this stage of the rebuilding process and which will benefit all aspects of Iraqi life. The Investment Law in the Kurdistan Region was issued with the view to creating such a climate, one that promotes investment, removes any legal obstacles and permits the investment of national and foreign capital collectively or individually in investment projects in a manner that contributes to the economic development process.'),
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(89776, 4884, 'content', 'March 2014\r\n\r\n<hr />\r\n\r\nSince these laws are largely related to the real estate finance industry, many call them the real estate finance laws. This article discusses the developments that have occurred in the finance environment generally and it also discusses the key points in relation to finance companies.\r\n\r\n<strong>Finance Environment:</strong>\r\n\r\nTo date there appears to be little changes in the manner of providing finance in Saudi Arabia.  Most of the finance products are provided by Saudi banks have remained as they were before the new finance laws were introduced.  However, lease finance and the structure of Murabaha (a method of Islamic financing) seem to be the most popular financing techniques used.\r\n\r\n<strong>Finance Companies:</strong>\r\n\r\nFollowing the issuance of finance laws, only a small number of finance companies have been incorporated. Most of these are real estate finance companies and ones which provides lease finance along with small and mid-size project financing.\r\n\r\n<strong>Legal Environment:</strong>\r\n\r\nIn order to carry out a finance business, a license must be obtained from the Saudi Arabian Monetary Agency (“SAMA”).  This is a pre-requisite before incorporating any entity that is to engage in the provision of financing, whether it be real estate finance or micro-finance activities.\r\n\r\nThe form of the legal entity must be a closed joint stock company; as a consequence, there must be at least five founding shareholders.\r\n\r\nUnlike limited liability companies which are usually managed directly by its owners, a joint stock company is managed by a board of directors which is elected by the company shareholders in a general assembly.\r\n\r\nSimilar to banking and insurance activities, SAMA also has conservative policies towards the finance industry.  For example, the approval of SAMA is required in order for the company to be incorporated and then SAMA maintains a supervisory role over transactions and contracts the finance company is involved in.  Also, SAMA must approve the appointment of the directors of the board and senior executives, as well as the actual products to be issued by the finance company.\r\n\r\nFurther, the supervision of SAMA extends to limiting the maximum amount that the finance company can provide as a finance; restricting the finance company from entering into certain transactions; and determining the minimum security that the finance company should obtain.\r\n\r\nThe Law on Supervision of Finance Companies (Royal Decree No. M/51 dated 13/8/1433 H(2 July 2012 G) provides that the finance company can be licensed for one or more types of finance activities. The types of finance are:\r\n<ul>\r\n 	<li>real-estate finance</li>\r\n 	<li>productive assets finance</li>\r\n 	<li>small and medium enterprises finance</li>\r\n 	<li>credit card finance</li>\r\n 	<li>consumption finance</li>\r\n 	<li>micro finance.</li>\r\n</ul>\r\nHowever the Implementing Regulations of the Law on Supervision of Finance Companies provides that neither a real estate finance company nor a micro finance company can carry out more than one finance activity.\r\n\r\nThe license to be issued by SAMA should specify the type of finance(s) the company intends to provide and may limit the finance company to run its business within a specific geographical territory in the Kingdom. The license should be for five years renewable.\r\n\r\n<strong>Finance Company Capital: </strong>\r\n\r\nThe share capital of finance companies varies according to the finance type practiced.  For example,  the capital of micro finance companies must not be less than ten million riyals (USD 2.7m), the capital of real-estate finance must not be less than two hundred million riyals (USD 53m), while other types of finance companies practicing other activities (except for the real-estate finance company and the micro finance company) must have a capital of not less than one hundred million riyals (USD 27m).\r\n\r\nUnder the Law on Supervision of Finance Companies it seems that a finance company may not fully be owned by foreign investors. However, the law does not specify the maximum limit of such foreign ownership although after considering the case in banks and insurance companies it is likely that the percentage may not exceed 49% of the company shares.\r\n\r\n<strong>Requirements for Incorporating Finance Companies:</strong>\r\n\r\nThere are various requirements to incorporate a finance company, most importantly:\r\n<ul>\r\n 	<li>Filling out a license application form approved by SAMA</li>\r\n 	<li>Providing a copy of the finance company articles of association and bylaws in line with SAMA’s template.</li>\r\n 	<li>Providing a description of the finance company structure including the main departments and the main functions of each department.</li>\r\n 	<li>Completing a Form of Appropriateness stipulated by SAMA for each shareholder and each director.</li>\r\n 	<li>Providing a feasibility study.</li>\r\n 	<li>Providing a business plan.</li>\r\n 	<li>Providing a bank guarantee of an amount equal to the maximum amount that the company is intending to carry for finance activities.</li>\r\n 	<li>Providing a copy of the proposed arrangements with third parties.</li>\r\n</ul>\r\nThe template of the articles of association and bylaws proposed by SAMA are almost the same as the ones current issued by the Ministry of Commerce and Industry except that SAMA’s versions indicates that there must an executive committee within the board of directors of the finance company.\r\n\r\nThe incorporation of a finance company must start with SAMA approvals before being forwarded to the other regulatory authorities such as the Ministry of Commerce &amp; Industry and the Saudi Arabian General Investment Authority in cases where there is non-GCC shareholding in the finance company.\r\n\r\nSAMA is required to respond to the license applicant within sixty days of an application being submitted. The response could be positive, negative or requesting further matters to be provided or further clarifications. If the response is positive, the applicant must complete the incorporation of the finance company within six months from the issue date of SAMA’s preliminary approval, although this may be renewable for another period of no more than six months.\r\n\r\nThe development and regulatory regime of the finance industry in the Kingdom is still in its early stages and it may take a decade to have a more mature industry, bearing in mind that the law provides that each finance company must have a Shari’ah committee to ensure that the company operates its business in compliance with Shari’ah.  As a result there is likely to be differing opinions issued by these Shari’ah committees acting for the various finance companies.\r\n\r\nAlso, the formation of the judicial committee mandated with resolving disputes arising out of the finance contracts or the violation of finance laws is yet to be formed.  It is likely to take a considerable period of time to set the principles governing the settlement of finance disputes.'),
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(89791, 4885, 'content', 'March 2014\r\n\r\n<hr />\r\n<p class=\"MsoBodyTextIndent2\">Maritime lien is a privilege that characterises certain maritime claims by virtue of the maritime laws applicable in a certain jurisdiction. Simply, such privilege is priority of the maritime debt over the non-maritime debt in respect of any claim against the property (vessel). However, maritime lien in English law is different from that of the UAE maritime law in many aspects.  For instance, in UAE you may have a maritime lien but does not necessarily mean that you are entitled to arrest the vessel unless that debt is considered as maritime debt. While under English law if the claim is secured with maritime lien, the claimant may bring the action against the vessel as a wrong doer and arrest the vessel.</p>\r\n<p class=\"MsoNormal\">However, there are some similarities between both English law and UAE law is that if a claimant has maritime lien on the vessel, it attaches to the vessel from the moment the claim arose and travel with the vessel even in the change of her ownership but as long as that lien is valid and not time barred. In UAE maritime lien will extinguish in expiry of the time limitation of one year except in supply contracts the time limitation for lien is 6 months. The time limitation will extend to three years in circumstances where it was impossible to arrest the vessel in the territorial waters of the country where the applicant is domiciled provided that he holds the nationality of that country or another country which has the same legislations.</p>\r\n<p class=\"MsoNormal\">Time limitation has been dealt with in article 93 of UAE Commercial Maritime Law No. 26 of 1981 as amended by law No. 11 of 1988 (Maritime Code) provides:</p>\r\n<p class=\"MsoNormal\">“1. Upon there being an objection, and in the absence of a lawful excuse, no claims shall be heard in respect of priority rights against the vessel after the expiry of one year save claims relating to priority rights securing debts for supplies referred to in subparagraph (e) of Article 84, which shall not be permitted after the expiry of six months.</p>\r\n<p class=\"MsoNormal\">2. The period referred to in the foregoing subsection shall commence to run as follows:</p>\r\n\r\n<ul>\r\n 	<li>\r\n<ul>\r\n 	<li>In relation to priority rights securing payment for assistance and salvage, from the day the said operations terminated.</li>\r\n 	<li>In relation to priority rights securing compensation for collision and other accidents, and bodily injuries, from the date the damage occurred.</li>\r\n 	<li>In relation to a priority right relating to loss of or damage to goods and chattels, from the day the goods or chattels were or should have been delivered.</li>\r\n 	<li>In relation to repairs, supplies and all other cases referred to in subparagraph (e) of Article 84, from the date the debt arose. In all other cases, the period shall commence from the day the debt falls due.</li>\r\n</ul>\r\n</li>\r\n</ul>\r\n<p class=\"MsoNormal\">3. The fact of the master, the sailors and other persons bound by a contract of work on the vessel being permitted to receive sums in advance or on account shall not result in the debts referred to in subparagraph (b) of Article 84 being regarded as being due for payment before the time specified therefor.</p>\r\n<p class=\"MsoNormal\">4. The periods herein-before set out shall be extended up to three years if it is not possible to arrest the ship to which the priority right attaches in the territorial waters of the State in which the claimant has his place of residence or head office. Only such persons may benefit by this provision who are nationals of the State or who are nationals of a State the legislation whereof contains a similar provision.”</p>\r\n<p class=\"MsoNormal\">As said maritime Liens in both English law and UAE law attaches to the vessel even in the change of her ownership. Article 91 of Maritime Code provides:</p>\r\n<p class=\"MsoNormal\"><em>“Priority debts shall follow the vessel in the hands of whomsoever it may be.”</em></p>\r\n<p class=\"MsoNormal\">The only way available for the new shipowner to get red of the maritime liens is in the circumstances provided for in article 92 of Maritime Code. It will be noted that the protected shipowner must either be a buyer of the vessel pursuant to the judicial sale. Otherwise, in the usual circumstances of sale and purchase agreements, the buyer must follow the statutory steps provided for in sub-article 92/b.</p>\r\n<p class=\"MsoNormal\">Article 92 of Maritime Code provides:</p>\r\n<p class=\"MsoNormal\">“Priority rights over the vessel shall expire:</p>\r\n<p class=\"MsoNormal\">(a) Upon the judicial sale of the vessel</p>\r\n<p class=\"MsoNormal\">(b) Upon the voluntary sale of the vessel if, before the payment of the price, the purchaser has taken the following steps:</p>\r\n\r\n<ul>\r\n 	<li>\r\n<ul>\r\n 	<li>he has registered the contract of sale on the Register of Ships.</li>\r\n 	<li>he has placed a notice on the notice board at the Registration Bureau of the vessel containing particulars of the sale, the price, and the name and residence of the purchaser.</li>\r\n 	<li>he has published a resume of the contract of sale, mentioning the price, and the name and residence of the</li>\r\n</ul>\r\n</li>\r\n</ul>\r\n<p class=\"MsoNormal\">purchaser, which publication must be made twice with an interval of eight days, in a widely circulating local newspaper. Priority rights shall be transferred to the proceeds of sale if within thirty days of the last publication in the newspapers the priority creditors notify the old owner and the new owner of their objection to the payment of the price. Nevertheless, the creditors\' priority shall remain in force as against the price unless it has been paid or distributed.”</p>\r\n<p class=\"MsoNormal\">Under UAE law, if the maritime lien has extinguished pursuant to the sale of the vessel according to article 92 of the Maritime Code, priority of the creditors will be shifted  to the price paid unless the same has been distributed among other creditors.</p>\r\n<p class=\"MsoNormal\">In English law there is no time limitation for Maritime liens but the person who has a claim secured with maritime lien must exercise his right and take the legal proceedings against the vessel as early as possible. If he fails to do so he may lose his right in the lien. Therefore he may proceed legally against the vessel and issue the writ in rem against the subject vessel and should not wait until she comes to the jurisdiction where he is taking the action. In the event that the writ has expired before the vessel is arrested, he may apply for renewing it.  In UAE the arrest application may not be filed until the vessel has come into the UAE jurisdiction. The legal proceedings may be summoned upon the ship agent or the ship master.</p>\r\n<p class=\"MsoNormal\">In UAE, the maritime lien right could equally be exercised against the vessel whether the debt arose while the vessel is operated by the shipowner or a charterer and the vessel could be arrested whether during her operation by the owner or the charterer. However, if the shipowner loses the possession of the vessel by illegal act and the creditor (claimant) is acting in a bad faith, the shipowner may challenge the maritime lien, This has been provided for by article 94 of the Maritime Code</p>\r\n<p class=\"MsoNormal\">“The foregoing provisions shall apply to vessels operated by an owner-operator or an operator who is not an owner, or an original charterer. The said provisions shall not apply if the owner loses possession of the vessel through an unlawful act and the creditor is acting in bad faith”.</p>\r\n<p class=\"MsoNormal\">Unlike English law, under UAE law the legal action must be brought against party in debt (liable for the claim secured with maritime lien) (action in personum), namely the shipowner. It is also arguable that the action may be brought against the demise charterer, which the author of this article believes to be a well founded case since the demise charterer will be responsible for equipping and manning the vessel. In Enlgish law the claimant has the option to bring the legal action against the vessel (action in rem) as wrong doing entity or he bring the action against the shipowner (action in personum). Action in rem concept is identified in Civil law jurisdictions including the UAE.</p>\r\n<p class=\"MsoNormal\">Under UAE law, if a claimant has a debt against the vessel which is secured with maritime liens, that does not necessarily mean that he is by default entitled to arrest the vessel. UAE law has provided for one article which designates the claims that are considered to be priority debts (secured with maritime liens) and the claims for which the claimant is entitled to arrest the vessel. Such claims are defined as maritime debts.</p>\r\n<p class=\"MsoNormal\">Article 84 of Maritime Code lists the claims that are privileged with maritime lien:</p>\r\n<p class=\"MsoNormal\">“The following and only the following debts shall be priority debts:</p>\r\n<p class=\"MsoNormal\">(a) Judicial costs incurred in protecting and selling the vessel, and distributing the proceeds thereof, as well as loading, lighthouse and port charges, and other dues and taxes of the same type, pilotage fees, compensation for damage caused to port installations, docks and navigation lanes, the costs of removing obstacles to navigation caused by the vessel, and costs of towing and maintenance of the vessel from the time of its arrival at the last harbour.</p>\r\n<p class=\"MsoNormal\">(b) Debts arising out of a contract for the employment of the master and crew, and other persons bound by a contract of maritime employment on board the vessel.</p>\r\n<p class=\"MsoNormal\">(c) Monies due for assistance and salvage, and the share of the vessel in general marine average.</p>\r\n<p class=\"MsoNormal\">(d) Compensation due for collisions and other navigational accidents, compensation due for bodily injuries to the passengers and crew, and compensation for loss or damage to goods and possessions.</p>\r\n<p class=\"MsoNormal\">(e) Debts arising out of contracts made by the master, and operations carried out by him outside the port of registration of the vessel within the scope of his lawful powers for an actual requirement dictated by the maintenance of the vessel or the continuance of its voyage, whether or not the master is also the owner of the vessel, or whether the debt is due to him, or to persons undertaking supply, or lenders, persons who have repaired the vessel, or other contractors.</p>\r\n<p class=\"MsoNormal\">(f) Breakdowns and damage giving rise to a right of compensation in favour of the charterers of the vessel.</p>\r\n<p class=\"MsoNormal\">(g) All premiums for insurance effected on the hull, equipment and fittings of the vessel due in respect of the last insured voyage, in cases where the insurance was effected for that voyage, or for the last period of insurance if the insurance was effected for a specified period, but provided that in either case the total does not exceed the premiums for one year.”</p>\r\n<p class=\"MsoNormal\">Article 115 of Maritime Code lists number of claims which are defined as maritime debts for which the claimant may apply to arrest a vessel. It provides as follows:</p>\r\n<p class=\"MsoNormal\">“1. It shall be permissible to effect a preservatory arrest against a vessel by an order of the civil court having jurisdiction. Such an arrest shall not be made save for the satisfaction of a maritime debt.</p>\r\n<p class=\"MsoNormal\">2. The expression \"maritime debt\" shall mean a claim in respect of a right arising out of any of the following causes:</p>\r\n<p class=\"MsoListParagraph\">a)     Damage caused by the vessel by reason of a collision or otherwise.</p>\r\n<p class=\"MsoListParagraph\">b)     Loss of life or personal injuries occasioned by the vessel and arising out of the use thereof.</p>\r\n<p class=\"MsoListParagraph\">c)     Assistance and salvage.</p>\r\n<p class=\"MsoListParagraph\">d)     Contracts relating to the use or exploitation of the vessel under a charterparty or otherwise.</p>\r\n<p class=\"MsoListParagraph\">e)     Contracts relating to the carriage of goods under a charterparty, bill of lading, or other documents.</p>\r\n<p class=\"MsoListParagraph\">f)      Loss of or damage to goods or chattels being carried on board the vessel</p>\r\n<p class=\"MsoListParagraph\">g)     General average.</p>\r\n<p class=\"MsoListParagraph\">h)     Towage or pilotage of the vessel.</p>\r\n<p class=\"MsoListParagraph\">i)       Supplies of products or equipment necessary for the utilization or maintenance of the vessel, in whichever place the supply is made.</p>\r\n<p class=\"MsoListParagraph\">j)       Construction, repair or fitting out of the vessel, and costs of it being in dock.</p>\r\n<p class=\"MsoListParagraph\">k)     Sums expended by the master, shippers, charterers or agents on account of the vessel -or on account of the owner thereof.</p>\r\n<p class=\"MsoListParagraph\">l)       Wages of the master, officers and crew, and other persons working on board the vessel under a contract of maritime employment.</p>\r\n<p class=\"MsoListParagraph\">m)    A dispute as to the ownership of the vessel.</p>\r\n<p class=\"MsoListParagraph\">n)     A dispute in connection with the co-ownership of the vessel, or with the possession or use thereof, or with the right to the profits arising out of the use thereof.</p>\r\no)     A maritime mortgage”\r\n<p class=\"MsoNormal\">It should be realized that the claimant who has a claim secured with maritime lien (priority debt) can only arrest the vessel if he presents his debt as one of the maritime debts listed in article 115 of the Maritime Code. This is an important difference between the maritime lien concept in UAE law and in English law where the claimant will be able to take the legal action against the vessel and may arrest her if he has a claim privileged with maritime lien. It is not understood, for what purpose had the UAE Maritime Code distinguished between the claims that are secured with maritime lien (priority claims) and the maritime debts. What is the benefit of having a privileged claim while the claimant may not exercise the basic right of securing his claim which is the action to arrest the vessel?</p>\r\n<p class=\"MsoNormal\">UAE Maritime Code does not recognise contractual agreed liens. The parties to the contract may not agree that either party may have lien over a particular property even if that property was the subject matter to which the services were rendered. This concept has been driven from the fact that priorities of debts are only indentified by the law. As it is explained earlier, maritime lien in UAE is merely a priority of a particular debt over other debts on the vessel. Therefore, an owner of property including shipowners may not by way of an agreement give to any other party a priority to his debt other than what has been stipulated by the law. On the other hand, it is generally allowed in mutual contracts especially in (provision of service to a property by a contractor) to agree to retain the property in the possession of the contractor until the other party performs his obligation (i.e. pay fees). However, this will not change the priority of particular claims as stipulated by the law. However, mortgage registered on the vessel could be treated as exception, as the mortgage will be treated as priority debt which is stipulated by agreement.</p>\r\n<p class=\"MsoNormal\">In English law, it is common that parties to the contract agree that one party may exercise lien over a property to which a service is rendered. Usually this lien is in the form a possessory lien which the carrier can exercise on the cargo and the shipbuilder and ship repairers can exercise on the vessel. Such lien could be also exercised under the common law even in the scenarios where there is no such contractual agreement. Such lien will be lost once the party exercising it loses possession of that property (vessel).</p>\r\n<p class=\"MsoNormal\">UAE Maritime Code does not discern between the contractual liens and the damage lien in terms of deciding priority issue over the vessel the way the English law does. Priorities have been set by the articles 89 and 90 of the UAE Maritime Code without giving consideration to whether the lien has arose from a claim respect of a contract or a claim in respect of damages.</p>\r\n<p class=\"MsoNormal\">Finally, it is Irrelevant whether the debt, which is privileged as priority debt under UAE Maritime Code, has arose inside the UAE or outside UAE jurisdiction. What really counts when a creditor is looking for exercising his priority is that the UAE Maritime Code considers his debts as privileged  and that he vessel is in the UAE jurisdiction.</p>'),
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(89806, 4886, 'content', 'March 2014\r\n\r\n<hr />\r\n\r\nThe number and size of government projects either being tendered or already under way in Qatar is staggering. The Qatar Port, the Metro project, the 2022 stadiums, water and power projects, road works and Lusail City are just some of the key projects that are driving the construction sector in Qatar.\r\n\r\nContractors and sub-contractors that are awarded contracts are provided financing by both local and foreign banks on the basis of the cash flow they are expected to generate from these projects. Banks providing credit to contractors typically require the contractor to assign the receivables that are generated from such construction contracts to them. Once the receivables are assigned, the bank can have direct recourse to the government authority sponsoring the project (the “Government Authority”). Once these receivables are assigned and are ring-fenced for the benefit of the bank, the bank typically treats these receivables as a form of quasi-security and accordingly its cost of funding the credit facilities is reduced given the favorable risk weightings. This in turn makes the pricing of such credit facilities more attractive to contractors.\r\n\r\nThis article seeks to clarify what banks are looking for when providing credit facilities backed by receivables. The article is specific to receivables emanating from government contracts although the sections on Assignment of Receivables and Invoice Discounting equally apply to private contracts.\r\n\r\n<strong>Assignment of Receivables</strong>\r\n\r\nThe Civil Code (Law No 22 of 2004) sets out specific provisions relating to the assignment of rights.  Article 324 of the Civil Code states that a creditor may assign its rights except where a specific provision of law or contract restricts such assignment. Typically, the contractor and the bank will enter into an assignment agreement to document the terms of the assignment of receivables arising from a construction contract. Clear reference to the construction contract should be made in the contract. Where there is no restriction placed on the assignment of rights (including receivables), the contractor may assign the receivables under a construction contract to a bank without the Government Authority’s approval. However, where a restriction is imposed by law or by contract, the contractor requires the express permission of the Government Authority prior to assigning its receivables to a bank.\r\n\r\nArticle 326 of the Civil Code requires that the assignor notify the debtor (i.e. the Government Authority) of the assignment in order for the assignment of receivables to take effect. While the requirement for such a notification is not unusual, Article 326 goes on to state that the effectiveness of assignment vis-à-vis third parties shall only occur if the acknowledgement or acceptance of the notice of assignment from the debtor is “date certain”.  Date certainty effectively gives priority to the assignee (bank) in respect of the assigned receivables. However, making the assignment date certain is an administrative burden and requires the acknowledgement or consent received from the debtor to be stamped by the Authentication Department at the Ministry of Justice.\r\n\r\nIn addition to the requirements noted above, the Government Authority should also agree to route the receivables into an account over which the bank exercises control. This can be achieved by noting the account details of the contractor in the assignment notice sent to the Government Authority and creating a pledge over that account in favour of the (assignee) bank.\r\n\r\n<strong>Ministry of Economy and Finance Regulations </strong>\r\n\r\nIn addition to the requirements under the Civil Code, the Ministry of Economy and Finance has also issued regulations relating to the assignment of receivables where the receivables emanate from a ‘government authority’ (the “Regulations”). The term ‘government authority’ has not been defined in the Regulations. It is understood that the Regulations would be applicable to various Ministries and other bodies such as Ashghal (Public Works Authority) and KAHRAMAA (Qatar General Electricity and Water Corporation). However, the Regulations would not be applicable to companies which are largely owned by the government but are primarily carrying out private functions (e.g. Qatar Petroleum).\r\n\r\nThe Regulations impose a higher standard of compliance. The significant additional requirements are:\r\n<ul>\r\n 	<li>the Government Authority and the assignee bank are required to notify the Government Auditing Department at the Ministry of Economy and Finance of the assignment;</li>\r\n 	<li>the assignment agreement is required to be notarised at the Authentication Department (note that this is not a requirement under the Civil Code); and</li>\r\n 	<li>banks are required to verify that the Government Authority has not agreed to assign the proceeds to any other party including to a sub-contractor.</li>\r\n</ul>\r\nThe above requirements, especially the requirement to notarise the assignment agreement is not required under the Civil Code and creates an additional administrative burden.  It can be argued that a failure to comply with this requirement would not invalidate the assignment itself; however, it may be viewed as a regulatory breach.\r\n\r\n<strong>Invoice Discounting</strong>\r\n\r\nThe Commercial Transactions Law, Law No 27 of 2006 (also known as the ‘Commercial Code’), deals with discounting of ‘commercial papers’ such as promissory notes. An invoice does not fall under the definition of a commercial paper and the provisions relating to discounting of commercial papers would not be applicable.\r\n\r\nBanks typically adopt a variance of the assignment of receivables structure discussed above in order to achieve an arrangement that resembles invoice discounting. The bank and contractor will enter into a master assignment of receivables agreement. Each time the contractor wishes to discount certain invoices, these invoices are submitted to the bank. The assignment notification is set out in the invoice itself thereby doing away with the need for a separate notification to the Government Authority. The bank will advance the face value of the invoice to the contractor after deducting its fee or discount. These arrangements are structured both on a recourse and on a non-recourse basis.\r\n\r\n<strong>Conclusion </strong>\r\n\r\nAssignments of receivables and invoice discounting are both critical to the construction sector. Banks typically look to the credit rating of the Government Authority rather than just the contractor in determining if the project should be financed. Credit departments are therefore more likely to approve such credit facilities. Having said that, some of the administrative procedures required to be complied with for assigning receivables including date certification and notarisation of assignment agreements (in certain cases) are burdensome both for contractors and banks. Nevertheless, receivables emanating from government projects will continue to be a critical piece of contractor financing in Qatar in the near future as construction activity in the country picks up steam.\r\n\r\n<em>This article first appeared in Private Sector Qatar – February 2014</em>'),
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(89827, 4887, 'content', 'March 2014\r\n\r\n<hr />\r\n\r\nConcerns about the scale of banks’ domestic and foreign exposures to companies owned or partly owned by governments cascaded through developed and developing markets alike. Locally, a recent study conducted by Bank of America Merrill Lynch found that UAE banks’ exposure to government debt was at its highest level since the late 1970s and the exposure of all banks to GRE was at 104%, most of which was built up when local banks were obliged to take on extra debt after international banks curtailed lending in the region.\r\n\r\nIn recognition of the risks arising from banks’ heightened exposure to GREs, the UAE Central Bank proposed rules in April 2013 to, limit exposure to GREs and local governments to 100% of their capital. After further coordination and consultation with the banks and the UAE Banks Federation, the Central Bank issued the Regulations re Monitoring of Large Exposure Limits (the “LER”) as well as the Guidelines to Monitoring of Large Exposures (“Guidelines”) on 11 November 2013 via Circular 32/2013.  These regulations govrn in lending to both public and private entities.\r\n\r\nCircular 32/2013 was published in the Federal Gazette dated 31 December 2013 and came into force one month thereafter, at which time Circular 16/1993 and its amendments (“Previous Regulations”) were cancelled. The importance of these regulations was made clear by H E Sultan Bin Nasser Al Suwaidi, Governor of the UAE Central Bank, who identified the LER as one of the most important regulatory developments (the other being the recently-issued mortgage regulations – see Law Update Issue 265).\r\n\r\n<strong>Large Exposures</strong>\r\n\r\nThe LER have defined a large exposure as “those funded and unfunded exposures and unused committed lines (less provisions, cash collaterals, bank guarantees and Federal Government guarantees) to a single borrower or its group, which in total is equal to or exceeds 10% of the bank’s capital base”. Capital base is as calculated in accordance with Central Bank Circular 27/2009 dealing with BASEL II.\r\n\r\nThere are two major developments under the LER as opposed to the Previous Regulations in respect of the definition of ‘large exposure’:\r\n<ol>\r\n 	<li>under the Previous Regulations, large exposures are limited to funded exposures, while the LER has expanded the definition to cover unfunded exposures and unused committed lines; and</li>\r\n 	<li>under the Previous Regulations, there was no threshold limit for certain exposures to be considered as a large exposure. The LER provides that exposures to a single borrower or its/his group that exceeds 10% of the bank’s capital base is to be considered as a large exposure, however the large exposure category limit for that borrower or its/his group may not be exceeded. This can be practically important as, in accordance with the LER, banks are requested to report large exposures to the Central Bank quarterly, however, exposures that exceed any large exposure category limit shall be reported to the Central Bank immediately.</li>\r\n</ol>\r\n<strong>Large Exposure Limits</strong>\r\n\r\nThe LER provides different large exposure limits for different categories of borrower group. Furthermore, under each borrower group, the LER provides an aggregate limit of large exposures which applies to the borrower group as a whole as well as an individual limit of large exposures which applies to each individual borrower under such borrower group.\r\n\r\n<strong>Governments and GREs</strong>\r\n\r\nExposures to Federal Government and their non-commercial or commercial entities which are fully guaranteed by the Federal Government are exempt from large exposure limits.\r\n\r\nAggregate exposures to local Governments and their non-commercial entities shall not exceed 100% of a bank’s capital base. Exposures to each non-commercial entity owned by local Governments are subject to a further 25% individual limit.\r\n\r\nCommercial entities of Federal Government which are not fully guaranteed by the Federal Government and commercial entities of local Governments are subject to an aggregate limit of 100% and an individual limit of 25% of a bank’s capital base.\r\n\r\n<strong>Single borrower or a group of related borrowers</strong>\r\n\r\nA single borrower or a group of related borrowers is subject to an individual limit of 25% and no aggregate limit is applicable.\r\n\r\n<strong>Banks</strong>\r\n\r\nExposures between banks within the UAE are exempt from large exposure limits if the tenures are less than 1 year, otherwise a 30% individual limit will apply. While the rationale behind this exemption is understandable in the context of large exposures,  it is to be noted that many of the high profile international examples of banking failures were primarily relying on short term interbank lending prior to their demise.\r\n\r\nExposures to banks operating outside the UAE, irrespective of their maturity, are not allowed to exceed 30% of the bank’s capital base. The same applies to exposures of (i) branches of foreign banks to their head offices and other branches abroad, as well as to foreign subsidiaries and affiliates of such head offices and (ii) UAE incorporated banks vis-à-vis their foreign subsidiaries and affiliates. It will be interesting to see how these rules affect local banks’ ability to expand outside the UAE. Certainly, how banks fund offshore expansion and the transaction structure used will need to be carefully considered against the LER.\r\n\r\nNotwithstanding the above, exposures of a bank to its parent company or to other subsidiaries of its parent company are subject to a 10% individual limit and a 25% aggregate limit.\r\n\r\n<strong>Others</strong>\r\n\r\nThe LER also provides limits in respect of exposures to a bank’s board members, shareholders, employees and professional consultants.\r\n\r\nThe table below sets out the details of applicable large exposure limits:\r\n<table class=\"MsoTableGrid\" border=\"0\" cellspacing=\"0\" cellpadding=\"0\">\r\n<tbody>\r\n<tr>\r\n<td colspan=\"3\" valign=\"top\" width=\"441\">\r\n<p class=\"MsoNormal\"><strong>Table of Maximum Large Exposure Limits</strong></p>\r\n</td>\r\n</tr>\r\n<tr>\r\n<td valign=\"top\" width=\"160\">\r\n<p class=\"MsoNormal\">Borrower</p>\r\n</td>\r\n<td width=\"133\">\r\n<p class=\"MsoNormal\">Aggregate Percentage</p>\r\n</td>\r\n<td width=\"149\">\r\n<p class=\"MsoNormal\">Individual Percentage</p>\r\n</td>\r\n</tr>\r\n<tr>\r\n<td valign=\"top\" width=\"160\">\r\n<p class=\"MsoNormal\">Federal Government</p>\r\n</td>\r\n<td width=\"133\">\r\n<p class=\"MsoNormal\">N/A</p>\r\n</td>\r\n<td width=\"149\">\r\n<p class=\"MsoNormal\">N/A</p>\r\n</td>\r\n</tr>\r\n<tr>\r\n<td valign=\"top\" width=\"160\">\r\n<p class=\"MsoNormal\">UAE Local Governments and their non-commercial entities</p>\r\n</td>\r\n<td width=\"133\">\r\n<p class=\"MsoNormal\">100%</p>\r\n</td>\r\n<td width=\"149\">\r\n<p class=\"MsoNormal\">No cap for local governments;</p>\r\n<p class=\"MsoNormal\">25% for each non-commercial entity</p>\r\n</td>\r\n</tr>\r\n<tr>\r\n<td valign=\"top\" width=\"160\">\r\n<p class=\"MsoNormal\">Commercial entities of Federal and Local Government</p>\r\n</td>\r\n<td width=\"133\">\r\n<p class=\"MsoNormal\">100%</p>\r\n</td>\r\n<td width=\"149\">\r\n<p class=\"MsoNormal\">25%</p>\r\n</td>\r\n</tr>\r\n<tr>\r\n<td valign=\"top\" width=\"160\">\r\n<p class=\"MsoNormal\">A single borrower or a group of related borrowers</p>\r\n</td>\r\n<td width=\"133\">\r\n<p class=\"MsoNormal\">N/A</p>\r\n</td>\r\n<td width=\"149\">\r\n<p class=\"MsoNormal\">25%</p>\r\n</td>\r\n</tr>\r\n<tr>\r\n<td valign=\"top\" width=\"160\">\r\n<p class=\"MsoNormal\">Shareholders who own 5% or more of a bank’s capital and their related entities</p>\r\n</td>\r\n<td width=\"133\">\r\n<p class=\"MsoNormal\">50%</p>\r\n</td>\r\n<td width=\"149\">\r\n<p class=\"MsoNormal\">20%</p>\r\n</td>\r\n</tr>\r\n<tr>\r\n<td valign=\"top\" width=\"160\">\r\n<p class=\"MsoNormal\">Inter-bank exposures-over 1 year</p>\r\n</td>\r\n<td width=\"133\">\r\n<p class=\"MsoNormal\">N/A</p>\r\n</td>\r\n<td width=\"149\">\r\n<p class=\"MsoNormal\">30%</p>\r\n</td>\r\n</tr>\r\n<tr>\r\n<td valign=\"top\" width=\"160\">\r\n<p class=\"MsoNormal\">A bank’s subsidiaries and affiliates</p>\r\n</td>\r\n<td width=\"133\">\r\n<p class=\"MsoNormal\">25%</p>\r\n</td>\r\n<td width=\"149\">\r\n<p class=\"MsoNormal\">10%</p>\r\n</td>\r\n</tr>\r\n<tr>\r\n<td valign=\"top\" width=\"160\">\r\n<p class=\"MsoNormal\">Board members</p>\r\n</td>\r\n<td width=\"133\">\r\n<p class=\"MsoNormal\">25%</p>\r\n</td>\r\n<td width=\"149\">\r\n<p class=\"MsoNormal\">5%</p>\r\n</td>\r\n</tr>\r\n<tr>\r\n<td valign=\"top\" width=\"160\">\r\n<p class=\"MsoNormal\">Bank’s employees</p>\r\n</td>\r\n<td width=\"133\">\r\n<p class=\"MsoNormal\">3%</p>\r\n</td>\r\n<td width=\"149\">\r\n<p class=\"MsoNormal\">Maximum 20 month’s salary</p>\r\n</td>\r\n</tr>\r\n<tr>\r\n<td valign=\"top\" width=\"160\">\r\n<p class=\"MsoNormal\">A bank’s external auditors, consultants and lawyers</p>\r\n</td>\r\n<td width=\"133\">\r\n<p class=\"MsoNormal\">Not allowed</p>\r\n</td>\r\n<td width=\"149\">\r\n<p class=\"MsoNormal\">Not allowed</p>\r\n</td>\r\n</tr>\r\n</tbody>\r\n</table>\r\nWhile the above provides a high level summary of the thresholds to be applied by the Central Bank, the Guidelines provide additional rules and procedures that must be adhered to by banks. These must be considered with equal importance when determining how to implement the LER into practice as it contain a greater level of detail not included in the LER.\r\n\r\n<strong>Exempted Exposures</strong>\r\n\r\nIn addition to those exempted exposures mentioned in section 3 above, the LER also provides several other types of exposures that can be excluded from the calculation of large exposures. A major development of the LER compared to the Previous Regulations is that a bank’s investment in marketable bonds or sukuks rated not less than AA-, which are held to meet the Central Bank’s liquidity requirements or are held in the trading book without the intention to hold such bonds or sukuks to maturity, shall be excluded from calculation of its exposure.\r\n\r\n<strong>Reporting and Management Responsibility</strong>\r\n\r\nThe board of directors of a bank (including any similar designated body) is vested by the LER with the responsibility for, among other matters, monitoring and controlling large exposures and exposures to its members.\r\n\r\nAs mentioned above, all large exposures and exposures to members of a bank’s board of directors shall be reported to the Central Bank quarterly. In the event of certain exposures of a bank exceeding one of the designated limits, the bank shall report this to the Central Bank immediately.\r\n\r\nImportantly a unanimous resolution passed by the board of directors is required prior to incurring a large exposure. In case of lending to a board member, a unanimous resolution (excluding the member concerned) is also required.\r\n\r\n<strong>Implementation and Grace Period</strong>\r\n\r\nThe LER became effective on 31 January 2014 (being one month after being published in the gazette), however banks who have exposures exceeding the limits specified by the LER are given a grace period of 5 years to improve such exposures at the rate of 20% per annum at a minimum in order to reach full compliance.\r\n\r\n<strong>Conclusion</strong>\r\n\r\nAs a long-awaited and bargained set of rules, the LER aims to reduce excessive concentration of exposures to a single borrower or a group of related borrowers, in particular to GREs, and ensure the sound functioning of the banking system within the UAE. The effort required by banks within the UAE market to comply with the LER will largely depend on their current policies and procedures, their capital base and, most importantly, the status of exposures that fit within the scope of the LER’s provisions. In our view, understanding how to categorise loans that may not have been caught by the Previous Regulations and implementing appropriate policies or revising existing policies to ensure ongoing compliance with the LER will be critical first steps. Our banking team can help with this process and all other issues that may arise.'),
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(88929, 4838, 'content', 'December 2014 - January 2015\r\n\r\n<hr />\r\n\r\nThe Europe, Middle East and Africa market is currently ranked the second largest sports market in the world with sponsorship identified as one of the fastest growing segments. The Middle East is very much considered to be the prime emerging sports market and continues to grow and offer scope for development. This potential across the region and specifically in the United Arab Emirates brings vast opportunities and challenges and will most certainly act as a catalyst for sustainable development. This development will require a parallel development in the legal infrastructure related to sports. Therefore this article will provide brief summary on the development of sports law in the UAE.\r\n\r\nThe UAE is a young jurisdiction but is maturing fast in the field of sports law and dispute resolution. Significant developments have occurred in the past decade. Several sports in the UAE have progressed from amateur to the professional level and as a result, now follow the rules of international sports governing bodies. Football is a good example  that demonstrates how sport has progressed in the UAE.. It should also be noted that the commercial value of UAE Football leagues increases every year which highlights the importance of sport in the UAE.\r\n\r\nOne of the most established sports associations in the UAE is the UAE Football Association. The UAE Football Association (the governing body of football in the UAE) was established pursuant to Ministerial Resolution No. 17 of 1972. This Resolution lists the 15 members of the Association, including the Chairman, his Deputy and the General Secretary. The legal authority of the Ministry of Youth and Sport is derived from two statutes: Law No. 1 of 1972 concerning the ministries’ authorities and Law No. 12 of 1972 regulating the clubs and associations working in the field of youth care. The members of the UAE Football Association have also issued the Statute of the UAE Football Association. This Statute is considered to be the main legislation regulating football in the UAE.\r\n\r\nIn addition to football, the UAE boasts an impressive list of sports events and international sporting competitions. Abu Dhabi, the capital of the UAE, annually hosts the Formula One Grand Prix. Dubai hosts the most expensive horse race in the world (the Dubai World Cup) and is bidding to host the 2020 Olympic Games as well as world class golf, tennis, swimming, and rugby tournaments. The UAE Football Association is very active in hosting several competitions. Abu Dhabi Sports Council and the Dubai Sports Council are also very active in hosting international sports events.\r\n\r\nWith regards to sports dispute resolution, the UAE Football Association have established a number of sports dispute resolution bodies. The UAE Football Association was influenced by the FIFA dispute resolution model because it is the global governing body of association football. In addition to the football dispute resolution bodies, another dispute resolution body that was recently established in the UAE is the  Court of Arbitration for Sports (CAS)’ Alternate Hearing Centre in Abu Dhabi. The CAS has proven to be particularly popular as a dispute resolution mechanism for resolving disputes involving international sports. The “Emirates Sports Arbitration Centre” is also expected to be established in the near future. The law that will establish this centre is still in the draft stage. . The idea behind establishing the Emirates Sports Arbitration Centre is to create a national model of CAS for all the sports disputes in the country. The new CAS Centre and the establishment of other sports dispute resolution bodies are significant because of the prevalence of arbitration clauses in the rules and regulations of sports governing bodies.\r\n\r\nIn view of these developments, the law relating to sport in the UAE will no doubt continue to grow and improve as the UAE continues to attract international sporting competitions in the future.'),
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(88948, 4839, 'content', 'December 2014 - January 2015\r\n\r\n<hr />\r\n\r\nBorn in the UK but raised in Canada, Steve has always had a keen interest in sports and by all accounts was ‘quite the sportsman’ in his university days.  Combining his love for sports by playing American football and his interest in the sciences, Steve attended Mount Allison University where he completed his undergraduate degree in biochemistry.  Set to start studying for his Masters in biology, a conversation with a university professor led him to re-examine his future plans and consider a career in law.\r\n\r\n“I remember having a conversation with a professor who was one of the most interesting individuals I have ever met and was also an excellent mentor to me and, despite his own illustrious career in research biology, he told me I should consider doing something ‘more interactive with society’,” recalls Steve and so ‘on a whim’ he decided to sit the Law School Admission Test (LSAT).  He passed the test with flying colours and found himself returning to his roots with a move to the UK to become a student at the University of Manchester School of Law.  There he swapped biology for a degree in law and American football for its northern English cousin, Rugby League.\r\n\r\n“I had a great time in Manchester,” says Steve.  “It was a big change for me, going to a big city from my small hometown in New Brunswick but I loved being in the largest student centre in Europe and experiencing everything that goes with that; and, I really enjoyed studying law”.  After finishing law school, Steve moved back to Canada, this time to Vancouver, and articled at Davis LLP, a large national firm.  Steve remembered his old university professor’s words and during his time at Davis, as a young litigator, he volunteered for a secondment program to the Crown Prosecution Service.\r\n\r\nSpending 100% of his time on his feet in court, Steve gained invaluable experience although he admits the life experience in working with criminal matters from Vancouver’s notorious Downtown East Side was a sobering experience.  “Primarily, I represented the Crown at the morning intake in Vancouver Provincial Courtroom 100 at 222 Main Street, which can be a pretty daunting place. I was handling initial hearings for people who had been taken into custody overnight and woke up in police cells.  It was largely a case of setting matters over for trial dates, issuing bench warrants, etc. – far from the glamour of storied trials - and some of the stories I encountered there were, on a fundamental level that has stayed with me, really quite sad. It certainly drew a contrast against the blue-chip corporate clientele I was working with back at the firm.\r\n\r\nSteve remained at his firm for two years before being offered a role at a large firm in Japan, at the time renowned for its sports law practice.  “It was a big move to consider, especially as by that time my wife and I had the first of our two children with us,” recalls Steve.  However, the chance to experience life in a completely different cultural setting and the opportunity to practice the kind of law he loved saw Steve and his family move to Tokyo, where they stayed for five years.  There he practised a range of sports-related law, including advising one of the largest advertising agencies in Japan with regards to sponsorship deals and broadcast rights agreements of numerous sporting events including the 2002 and 2006 FIFA World Cup events.\r\n\r\nHaving now been joined by a son and with his daughter approaching school-age, Steve and his wife decided to move back home after he was offered partnership at a large firm in Atlantic Canada.  There, Steve laughs as he talks about ‘Canadian-ising’ the kids by getting them involved in Canadian sports - “Skiing, skating, canoeing, camping... We did it all and it was great fun.  It formed a strong connection and has added a few things we love to do as a family each time we return to Canada, depending on the season.”\r\n\r\nA few years later, thoughts returned of the family living abroad.  “We looked at a few places and Dubai really stood out,” says Steve.  “Then the opportunity came up with Al Tamimi &amp; Company and everything fell in to place”.  Steve spent three years working in the corporate commercial department in Al Tamimi’s Dubai office before leaving to become the General Counsel for Abu Dhabi Motorsports Management LLC, managing the central legal function of the iconic Yas Marina Circuit.\r\n\r\nThree years later, in response to growing client demand for specialised legal counsel in the increasingly complex sports industry, Al Tamimi &amp; Company decided to create a dedicated Sports Law practice and approached Steve about a return to the Firm.  “I didn’t hesitate to say yes,” says Steve, “Al Tamimi is a great firm to work for and the opportunity to head up a team dedicated solely to sports law was my ideal job”.\r\n\r\nNow based in the Firm’s Qatar office, Steve heads a talented team of lawyers who have experience in matters from tennis and athletics to motorsports and football.  Whilst looking forward to Qatar hosting the 2022 FIFA World Cup, the team are already engaged on numerous sports-related matters including sponsorship deals, venue management and sporting events and state that their vision is for the practice to be known “both locally and internationally as the go-to firm for advice on sports-related business with a Middle Eastern connection”.  With the Middle East set to emerge as a prime sports market and the enormous potential for growth for sports in the region, the team look set for a busy next few years.\r\n\r\nSo which team will Steve be supporting at the 2022 Qatar FIFA World Cup?  “Well if they qualify, Canada of course!  Perhaps with Qatar as a close second,” he laughs.'),
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(88959, 4840, 'content', 'December 2014 - January 2015\r\n\r\n<hr />\r\n\r\nThe new law includes amendments to the previous law of 2009 in order to correct and align the legal position of landlords and tenants.\r\n\r\nThe 1994 Law regulated the landlord and tenant relationship and applied to all leased real estate except for:\r\n<ul>\r\n 	<li>Real estate leased for the purposes of agriculture and animal breeding;</li>\r\n 	<li>Real estate leased to the employees in connection with their employment contracts; and</li>\r\n 	<li>Real estate, in full or in part, owned by the government or one of the governmental agencies leased for investment purposes such as hotels, restaurants, etc.</li>\r\n</ul>\r\nIn an aim to improve the regulations controlling landlords and tenants, the new law has been implemented. The amendments apply retrospectively to all rent contracts concluded before 31 August 2000. Rental contracts concluded after this date are governed by the terms of the contract in question, and are left in the control of the parties unless the issue reaches the courts.\r\n\r\nThe key amendments introduced by the new law are:\r\n\r\na) Contracts concluded before 31 August 2000 to have rent rises regulated\r\n\r\nIn contracts concluded before 31 August 2000, the rental amount was reached by mutual agreement by the Landlord and the Tenant. If the parties could not decide the rent, then it was within their right to approach the competent court to apply the so-called “rent value of similar property” principle, which allows courts looking into rent-related disputes to determine a fair raise in the value of the rent by taking the current rent fee of a similar property in a similar area as the base of calculation. However, the amendments brought in by the new law (article 5(a)(2)–(4)) now stipulate that rent raises in contracts concluded before 31 August 2000 must follow the percentage rise determined and published by the Council of Ministers. Additionally, the new law stipulates that the Council of Ministers shall reevaluate the said percentages and make any necessary amendments every five years.\r\n\r\nb) Use of a property by family members of a deceased tenant\r\n\r\nIn the 1994 Law, the family members of a deceased tenant renting a property for residential purposes and who were living with the tenant at the time of death were giving the right to remain in the property for three years. If the property was rented for purposes other than residential purposes, then the heirs of the deceased had the right to make use of the property for a period of six years, ensuring that they comply with the “rent value of similar property” principle. The new law however now gives the right for family members of a deceased in a residential property to remain in the property indefinitely (Article 7(a)) unless the landlord decides to evacuate the property by virtue of one of the situations provided for in Article 5 of the Law. In relation to non-residential properties, the heirs now have the right to continue use of the property indefinitely, rather than for a limited time of six years. The key change in this case is that the wife of a deceased tenant loses any right to the property in the event that she remarries.\r\n\r\nc) Divorced wife can stay indefinitely\r\n\r\nUnder the 1994 law, a legally divorced wife had the right to remain in a property for three years as of the date of divorce. Under the new law (article 7(b)), the divorced wife and any children in her custody, have the right to remain in the property indefinitely unless the landlord decides to evacuate the property by virtue of one of the situations provided for in Article 5 of the Law.\r\n\r\nIn general, the above mentioned amendments have been met with controversy. Landlords have felt that the amendments are in the tenant’s best interest, whereas tenants have felt that they favour the landlords. This particularly apparent in relation to the amended rights of widows and divorced women. It is anticipated that further amendments will be made in the future to balance out the discrepancies and harmonize the landlord and tenant relationship.'),
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(88974, 4841, 'content', 'December 2014 - January 2015\r\n\r\n<hr />\r\n\r\nOne of these laws relates to the subject of social insurance, namely unemployment insurance law. In general, social insurance is a system whereby people receive benefits or services in consideration for contributions made to an insurance program.\r\n\r\nBACKGROUND\r\n\r\nThe government of the State of Kuwait created the Public Institute for Social Security (“PIFSS”) in order to guarantee the continuous welfare of the Kuwaiti population through the application of a social security system. This system is funded by payments from both employers and Kuwaiti employees. Pursuant to the Social Insurance Law (Law No. 61 of 1976), an employer is required to register its new Kuwaiti employee within 10 days of employment. Upon registration, the employee and the employer are to pay a certain percentage of the employee’s salary into the PIFFS fund. Larger companies, though required to register an employee within 10 days of employment, often do so periodically throughout the year for efficiency purposes. The employer who files a late registration pays a nominal fee.\r\n\r\nIn addition to the PIFSS system, Kuwait has also created the Manpower and Government Restructuring Program to ensure the continued welfare for citizens employed in the private sector. In general, the Manpower and Government Restructuring Program provides Kuwaiti citizens with a monthly supplement to the citizen’s salary depending on the educational background of the citizen: the higher the education, the higher the supplement. Unlike PIFSS, the employee is responsible for registering themselves in the Program, not the employer.\r\n\r\nTHE UNEMPLOYMENT INSURANCE LAW\r\n\r\nIn order to further expand on the Kuwait social insurance system, a permanent government-financed social security fund for the protection of workers against unemployment has been established. The Unemployment Insurance Law (Law No. 101 of 2013 Concerning Unemployment Insurance) was introduced in late April 2013 to provide insurance against unemployment and offer social security for Kuwaiti employees in the private and oil &amp; gas sectors in case of their dismissal. Eligibility is limited to Kuwaiti nationals who must be\r\n\r\nbetween 18-60 years old\r\n\r\ncapable of working\r\n\r\nnot entitled to receive a pension\r\n\r\nhave been employed for at least six months from the application date of the Unemployment Insurance Law. Accordingly, Kuwaiti employees were first eligible for unemployment benefits from 1 November 2013.\r\n\r\nUnder the Unemployment Insurance Law, employees are entitled to 60% of their last monthly salary for a period of six consecutive months following unemployment, whether in the case of resignation or termination. Both the employer and the Kuwaiti employee must each contribute to this social insurance fund. Pursuant to the Unemployment Insurance Law, each Kuwaiti employee and his employer shall owe a monthly contribution of 0.5%; in addition, the public Treasury will also contribute 0.5%. These contributions are to be deducted retroactively from the application date of the Unemployment Insurance Law, which is 1 May 2013, for all employees already registered with PIFSS from that date. This contribution amount is to be calculated in relation to the total salary in the basic insurance and the salary in the supplementary insurance at a maximum of KD 2,750 (USD 9,721) per month. All provisions of the Unemployment Insurance Law are to be applied in accordance with the Social Insurance Law, briefly discussed above.\r\n\r\nTo receive unemployment insurance benefits, the unemployed Kuwaiti employee must apply to the Manpower and Government Restructuring Program. Such an application must be within six months of the end of service date. If an insured is registered with the Manpower and Government Restructuring Program within 30 days from the date employment ended, then the insured will be paid unemployment compensation from the eighth day that employment ended. Conversely, if no such registration occurred, the compensation will be payable from the date the application was submitted.\r\n\r\nThe Unemployment Insurance Law sets out certain instances where unemployment insurance benefits can be suspended or not granted altogether including but not limited to the following instances: (i) the insured has rejected a job that is suitable for him (suitability is to be determined by the Minister of Finance); (ii) the insured refused to join a training course as required by the Manpower and Government Restructuring Program; and (iii) the insured has a private business. In addition, the Unemployment Insurance Law protects unemployment insurance benefits from being seized or attached unless in relation to payment of alimony; however, such payment is limited to 25% of the unemployment compensation.\r\n\r\nAs from May 2013, the total contributions owed to the social insurance funds, through its different arrangements, by Kuwaiti employees shall be 8% of the employee’s monthly salary and for the employers, the total contribution shall be 11.5% of the employee’s monthly salary.\r\n<div></div>'),
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(88997, 4842, 'content', 'December 2014 - January 2015\r\n\r\n<hr />\r\n\r\nThe country is a stable and attractive market in which to offer securities due to its steady GDP growth rate of 5% over past years and an estimated USD 29,600 GDP per capita.\r\n\r\nAs units of investment funds are considered ‘securities’ under Omani law, in this article we take you through the general issues to be aware of when contemplating marketing units of investment funds to potential investors in Oman.\r\n\r\nLEGAL FRAMEWORK\r\n\r\nIn general, the marketing of units in Oman is governed by:\r\n<ol>\r\n 	<li> Royal Decree No. 80/98 of 9 November 1998 promulgating the Capital Market Law (‘Market Law’); and</li>\r\n 	<li> The Capital Market Law Implementing Regulation issued by the Capital Market authority under decision number 1/2009 (‘Market Regulations’).</li>\r\n</ol>\r\nMARKETING REGULATORY REQUIREMENTS:\r\n\r\nThe following requirements need to be adhered to before units can be sold to and acquired by Omanis and non-Omani nationals:\r\n<ol>\r\n 	<li>Units in a close-ended fund (i.e. a fund that raises a fixed amount of capital) must be listed on the Muscat Securities Market, and the offering of such units must be approved by the Capital Market Authority of Oman.  Upon approval, the units shall be listed on the Muscat Securities Market and then registered with Muscat Clearing &amp; Depository Company that has been acting as securities clearing and depository body in Oman.</li>\r\n 	<li>Units in an open-ended fund (i.e. a fund that does not have restrictions on the amount of shares it will issue) do not have to be listed on the Muscat Securities Market, but:</li>\r\n</ol>\r\n<ul>\r\n 	<li>If the units are to be listed on the Muscat Securities Market, the offering must be approved by the Capital Market Authority.  The listing on the Muscat Securities Market shall then take place and the units shall be registered with the Muscat Clearing &amp; Depository Company.</li>\r\n 	<li>If the units are not to be listed on the Muscat Securities Market, there is no explicit legal requirement to apply for the offer approval to the Capital Market Authority.  However, the management of the fund is then required to keep proper records of the fund, as per Omani law, in case local authorities wish to inspect these.</li>\r\n</ul>\r\nMarketing activities carried out from outside Oman, whereby investors based in Oman are targeted, may be considered as conducting business in Oman for the purposes of Omani law.\r\n\r\nOmani law requires that:\r\n<ul>\r\n 	<li> the units marketing be approved by the Capital Market Authority, in advance; and</li>\r\n 	<li> only a duly Capital Market Authority-licensed distributor, appointed by a foreign fund, be permitted to carry out the marketing activities for it or on its behalf in Oman.</li>\r\n</ul>\r\n“MARKETING” OR “OFFER” TO INVESTORS\r\n\r\nUnder Omani law, the marketing of securities to the public (public offers) is referred to as a ‘public subscription’, and is defined by Capital Market Authority as an invitation to the public generally to subscribe for securities in a joint stock company under incorporation or upon the increase of the capital of an existing company in accordance with the conditions and provisions appearing in the prospectus approved by the Capital Market Authority.\r\n\r\nPrivate subscription, in contrast, is defined by the Capital Market Authority as an invitation directed to a particular class or to particular persons to subscribe for securities in a public joint stock company or upon the increase of the capital of an existing company in accordance with the conditions and requirements which the Capital Market Authority prescribes.\r\n\r\nThere is no legal definition of what the ‘marketing’ of securities means under Omani law.  Practically speaking, however, it is believed to encompass the arranging of conferences, roadshows or one-to-one presentations (i.e. direct contact with a potential investor). These activities therefore require prior approval from the Capital Market Authority.\r\n\r\nPRIVATE PLACEMENT PROCESS:\r\n\r\nEvery fund in the form of a public joint-stock company that is interested in increasing its capital through private placement of units to specific persons is obliged under Omani law to:\r\n<ol>\r\n 	<li>convene an extraordinary general meeting to obtain the approval on such a proposal;</li>\r\n 	<li>send to the target investors the summary of the capital increase proposal;</li>\r\n 	<li>obtain an undertaking from the persons to whom the private placement is addressed confirming they would pay the units consideration upon allotment;</li>\r\n 	<li>disclose to the unit-holders the fact the persons to whom the units are to be allotted are ‘related parties’ to the fund and its existing unit-holders and managers, and to clarify the nature of interests related to the fund; and</li>\r\n 	<li> resolve to approve the private placement.</li>\r\n</ol>\r\nOther steps to be taken under Omani law include the following:\r\n<ol>\r\n 	<li>The fund shall collect the subscription amounts within 60 days from date of the general meeting.</li>\r\n 	<li>Where the subscription amounts have not been collected within the 60-day period, the investment committee of the fund shall invite the unitholders for another extraordinary general meeting to re-approve the private placement.</li>\r\n 	<li>The issue price of the units being offered through private placement shall not be less than the average of the weekly high and low closing prices of the relevant units quoted by the Muscat Securities Market in the last 26 weeks or such average during four weeks before the date of the official disclosure of the private placement, whichever is higher.</li>\r\n 	<li>The issue price of the units being offered through private placement shall not be less than the issue price at which it was offered in the rights issue.</li>\r\n 	<li>The privately placed units shall be locked in for a period of one year from the date of listing on the Muscat Securities Market.</li>\r\n</ol>\r\nSANCTIONS\r\n\r\nShould any of the rules be breached by a party marketing units, under the Omani law governing securities (and without prejudice to any more severe penalty provided for in any other law) the party in breach may be subject to:\r\n<ul>\r\n 	<li>imprisonment for up to three years;</li>\r\n 	<li>a fine of not less than OMR 5,000 (USD 13,000)</li>\r\n 	<li>sanction of not being able to conduct the activity or the profession which is the subject matter of the crime for a period of up to three years; and/or</li>\r\n 	<li>paying damages towards an investor who has suffered loss.</li>\r\n</ul>\r\nCONCLUSION\r\n\r\nAlthough authorities in Oman are in general open to new financial products being available to its nationals and residents, they have the interests of investors at heart. There is only a limited understanding of such products in Oman and so the Capital Market Authority has taken the view that investors are best protected if the Capital Market Authority acts as a monitoring authority whenever units of funds are offered to investors in Oman.\r\n\r\nThis does not mean, however, that the legal position under Omani law is unduly burdensome on investment funds or their managers.  Provided proper legal advice is taken, both fund managers and investors can have confidence in Oman’s robust securities market.'),
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(89014, 4843, 'content', 'December 2014 - January 2015\r\n\r\n<hr />\r\n\r\nDubai has already stated that it is to be the largest expo in history. In brief, the Expo is held every five years and is the world’s largest and oldest world fair. Countries from all around the world participate and exhibit innovations and discuss and share ideas on issues of international importance. Amongst the many advantages for the hosting city, the World Expo is a strong catalyst for economic growth, and creates great investment opportunities.\r\n\r\nThe organizing committee involved with the Dubai Expo is fully aware of the responsibilities and challenges they are facing. To commemorate this big event they have chosen the theme “Connecting Mind, Creating the Future”. The emirate, which has earmarked $7 billion in capital spending for the event, has planned a 4.4 square kilometre exhibition site at Jebel Ali, close to the emirate’s new Al-Maktoum International Airport. Hosting Expo 2020 is an once-in-a-lifetime opportunity and one that will be maximized to accelerate the growth of several industries in Dubai.\r\n\r\n<strong>Licensing opportunities – Use of the Expo’s marks</strong>\r\n\r\nLike any major event such as the Olympic Games, the FIFA World Cup and the Super Bowl, most revenues are generated from licensing around the event’s trademarks, logos and slogans. For the purpose of the bid, and in order to gather votes, use of the Expo 2020 logo was freely allowed. However now that Dubai has been chosen as the host city, significant market share can be achieved through the use of the logo and distributors are vying to be exclusive licensees for the purpose of producing and offering goods and services displaying the Expos 2020 design and slogans. As an acting duty of the special committee set up for the Expo 2020 events, the organizers are required to find official commercial partners, sponsors, suppliers and licensees allowing them use of the trademarks and slogans associated to Expo 2020. Finding appropriate commercial partners, sponsors, suppliers and licensees is not an easy task, since as in any commercial relationship in order for a business collaboration to succeed, a common vision needs to be shared, and significant preparation and vigilance before, during and after such an event is required.\r\n\r\nSimilar to the countries who have in the past hosted the Olympic games and Expo events, the UAE is likely to enact specific legislation to protect a number of words and logos associated with the Expo. As with any major event, there is a real prospect of companies who are not official sponsors or commercial partners attempting to use the event’s IP for their own gain without paying sponsorship fees. This is often referred to as ‘piggy-backing’ or ‘ambush marketing’.\r\n\r\n<strong>How to effectively protect the brand</strong>\r\n\r\nIP protection comprises of Trademark, Copyrights, Industrial Designs and Patent protection. Through Expo 2020, we will witness an influx of goods and services emerging into the market to take advantage of the expected 25 million Expo visitors. The best way to combat counterfeiting and unauthorized sellers is to register all trade names, marks, designs, logos and slogans so that they are enforceable in case of infringement. The brand owners must then closely monitor the activities taking place in the market. The brand owners as well as the sponsors and licensees share an equal duty of vigilance in order to safeguard their interests.\r\n<div></div>'),
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(89033, 4844, 'content', 'December 2014 - January 2015\r\n\r\n<hr />\r\n\r\nThe following points are to be noted with the new on-line system:\r\n<ul>\r\n 	<li>All applicants need to provide a direct legalised Power of Attorney to the representative in Saudi Arabia.  Powers of Attorney must reflect the full address of the trademark applicant or else the document will not be accepted.</li>\r\n 	<li>Trademark owners are no longer permitted to have more than one agent representing them in the Kingdom and a valid legalised Power of Attorney needs to be uploaded on the system.  Prior to uploading the Power of Attorney, the original needs to be approved by the Trademark Office. In the event that the Trademark Office has more than one power of attorney submitted for a trademark owner, it will only accept the document of the most recent date (i.e. the date of legalisation)..</li>\r\n 	<li>All trademark applications have to be filed on-line and fees are now payable directly on the website.</li>\r\n 	<li>If priority is to be claimed, a certified copy of the priority document must be filed within three months of the filing date; photocopies are not accepted except for priorities based on Community Trademark (CTM) applications.</li>\r\n 	<li>Publications now appear on the website of the Ministry of Commerce.</li>\r\n 	<li>Issuance of signed registration certificates will also be possible through the on-line system.</li>\r\n</ul>\r\nThese new procedures are a welcome change and will reduce the whole registration process to approximately six months.\r\n\r\nUnfortunately there are some downsides to the system which will put limitations on trademark owners:\r\n<ul>\r\n 	<li>Trademark owners will not have the flexibility of using more than one trademark agent in Saudi Arabia and should they wish to change agents, a change of agent fee will now be payable (however this fee is still to be decided).</li>\r\n 	<li>The list of goods and services covered by trademarks will be limited in the sense that trademark owners can now only use wordings as stated in the Nice Classification of Goods and Services.  This restriction is due to the fact that the on-line system is linked to the Nice Classification and only permits goods listed under the Classification to be used.  Therefore priority applications may now differ to the trademark of the country of origin.  To obtain maximum protection it is recommended to use the class headings.</li>\r\n</ul>\r\n<div></div>'),
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