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(84773, 4622, 'content', '<p>It further expands the definition of conduct violating the privacy of others by criminalizing eavesdropping, transmitting and disclosing communications (including audio and visual material); taking photographs of others and copying, saving or publishing them; and publishing news, comments, statements and information even if they are authentic.</p>\r\n<p>The New Cyber Crime Law, most notably, creates additional categories  of offenses addressing the increase in the incidence of cyber crime in  the United Arab Emirates (&ldquo;UAE&rdquo;). Highlighted below are the most notable  provisions of the New Cyber Crime Law.<br /><br /><strong>1. Access to an electronic site<br /><br /></strong>Federal  Law No. 2 of 2006 previously provided that anyone who commits a willful  act by illegally accessing an electronic site will be punished by  imprisonment and/or a fine. Article 2 of the New Cyber Crime Law removes  the intent requirement and prohibits any person from accessing an  electronic site illegally, without permission, or by exceeding the  limits of said permission, and provides for an express fine of not less  than AED 100 and not exceeding AED 300. It provides an express penalty  of imprisonment for a period of at least six months and/or a fine of not  less than AED 150,000 and not more than AED 750,000 for changing,  copying, deleting, disclosing and publishing any data or information  obtained by entering an electronic site illegally and without  permission. To the extent such data or information is personal; the New  Cyber Crime Law increases the penalty to imprisonment for a period not  less than one year and/or a fine of not less than AED 250,000 and not  exceeding AED 1,000,000.<br /><br />Article 4 of the New Cyber Crime Law  further states that any person who enters without permission any  electronic site for the purpose of obtaining government data or  confidential information of a financial trade or economic establishment  shall be punished by temporary imprisonment and/or a fine of not less  than AED 250,000 and not exceeding AED 1,500,000. There is an increase  in penalty if such data is changed, copied, deleted, disclosed, or  published which includes a fine of not less than AED 250,000 and not  exceeding AED 1,500,000 and/or imprisonment for a period not less than  five years.<br /><br /><strong>2. Medical related data<br /><br /></strong>Article  7 of the New Cyber Crime Law now expands the definition of conduct in  respect of medical data and information by stating that any person, who  obtains, amends, damages or discloses information obtained online,  related to medical records, examinations, diagnoses, treatment or care,  without permission, shall be punished by temporary imprisonment.<br /><br /><strong>3. Electronic card and bank account numbers; confidential codes; forgery<br /><br /></strong>Article  12 expands the categories of private information and punishes any  person who unlawfully accesses credit card numbers, electronic card  numbers, bank account statements and details of electronic payment  methods by imprisonment and/or a fine. It punishes the intent to use and  the use of such information to obtain funds belonging to third parties  by imprisonment of not less than six months and/or a fine not less than  AED 200,000 and not exceeding AED 1,000,000.<br /><br />Article 14 of the  New Cyber Crime Law also prohibits a person from obtaining without  permission a confidential number, code or password used to access any  electronic site without permission by providing for imprisonment and/or a  fine not less than AED 200,000 and not exceeding AED 500,000<br /><br />Article  13 further prohibits the forgery, imitation and copying of a credit  card, debit card, and any other electronic payment method and punishes  persons from using and knowingly accepting such credit cards, debit  cards, and/or other electronic payment methods with imprisonment and/or a  fine of not less than AED 500,000 and not exceeding AED 2,000,000.<br /><br /><strong>4. Electronic communication<br /><br /></strong>Protecting  the privacy and integrity of electronic communications, Article 10  prohibits the disruption of electronic communication by spamming  electronic mail. Article 15 of the New Cyber Crime Law also provides  that it is an offence for persons to intentionally and without  permission capture and/or intercept communications online. The offence  is punishable by a fine not less than AED 150,000 and not exceeding AED  500,000. Further, a person who discloses information obtained in this  manner may be punished by imprisonment for a period not exceeding one  year.<br /><br /><strong>5. Gambling activities and materials that prejudice public morals<br /><br /></strong>Article  17 of the New Cyber Crime Law now punishes anyone who produces,  transmits, publishes and exploits through an electronic site gambling  and/or pornographic material or any other material that may prejudice  public morals. Any person, who establishes, operates or supervises an  electronic site and/or transmits, sends or publishes through an  electronic site; gambling and/or pornographic materials shall be  punished by imprisonment and a fine of not less than AED 250,000 and not  exceeding AED 500,000. Further, if the subject of the pornographic  content is a juvenile not exceeding eighteen years, or if the content  was designed to tempt juveniles, the offender shall be punished by  imprisonment for a period not less than one year and a fine not less  than AED 500,000 and not exceeding AED 150,000.<br /><br />Under Article 19,  any person who incites or tempts another to commit prostitution using  an electronic site shall also be punished by imprisonment and a fine of  not less than AED 250,000 and not exceeding AED 1,000,000. The  punishment is increased for a period of not less than five year and a  fine not exceeding AED 1,000,000 if the victim is a juvenile.<br /><br /><strong>6. Defamation<br /><br /></strong>Under  Article 20, any person who insults others or has attributed to another  an incident that may make him subject to punishment or contempt by  others by using an electronic site shall be punished by imprisonment or a  fine of not less than AED 250,000 and not exceeding AED 500,000. Insult  or slander against public employees is considered an aggravating  circumstance of the crime.<br /><br /><strong>7. Contempt of religion<br /><br /></strong>Article  35 stipulates penalties of imprisonment and a fine of not less than AED  250,000 and not more than AED 1,000,000 for any person using electronic  sites to display contempt for any holy symbols, characters, figures and  rituals of Islam including the Divinity (Allah, God) and the Prophets  andfor any other faiths or religions or any of their symbols,  characters, figures and rituals.<br /><br /><strong>8. Human trafficking<br /><br /></strong>Article  23 of the New Cyber Crime Law prohibits any person from establishing,  operating or supervising an electronic site for the purpose of organ or  human trafficking and punishes the same by temporary imprisonment and a  fine of not less than AED 500,000 and not exceeding AED 1,000,000. This  is an increase from the penalty stipulated in the 2006 Cyber Crime Law,  which previously criminalized human trafficking, by temporary  detainment.<br /><br /><strong>9. Sedition, sectarianism and harming national unity<br /><br /></strong>Article  24 stipulates punishments for any person creating or running an  electronic site to publish, online or through any information technology  means, any programs or ideas which would promote disorder, hate, racism  or sectarianism and damage the national unity, social peace, public  order and pubic decency.<br /><br /><strong>10. Weapon&rsquo;s trade and terrorist activities<br /><br /></strong>Articles  25 stipulate punishment for persons who operate an electronic site for  the purpose of promoting or trading weapons, ammunitions or explosives.  Article 26 provides that it is an offence to establish, operate or  supervise an electronic site, or publish information online for a  terrorist group or any illegal group, association, organization, or  body.&nbsp;<br /><br /><strong>11. Collecting donations without a license<br /><br /></strong>Article  27 prohibits any person from creating or running an electronic site to  raise donations without obtaining a license from the competent  authority.<br /><br /><strong>12. State security<br /><br /></strong>Article 29  of the New Cyber Crime Law also stipulates penalties of imprisonment and  a fine not exceeding AED 1,000,000 for any person who may create or run  an electronic site or any information technology means, to deride or to  damage the reputation or the stature of the state or any of its  institutions, its President, the Vice President, any of the Rulers of  the emirates, their Crown Princes, the Deputy Rulers, the national flag,  the national anthem, the emblem of the state or any of its symbols.<br /><br />Article  28 prohibits any person from publishing any information, news,  caricatures or any other kind of pictures that would pose threats to the  security of the state and to its highest interests or violate its  public order.<br /><br />Article 30 punishes any person from creating or  running an electronic site for the purpose of engaging in the overthrow  of the system of government of the state or to seize it, or to seek to  disrupt or obstruct the Constitution or the effective laws of the state,  or to oppose the basic principles which constitute the foundations of  the system of government of the state.<br /><br /><strong>13. Promoting demonstrations without a license<br /><br /></strong>Article  32 of the New Cyber Crime Law stipulates punishment for persons who  operate or supervise an electronic site for the purpose of planning,  organizing, planning, promoting or calling demonstrations or protests  and the like without a license from the competent authority. Offenders  shall be punished by imprisonment or a fine of not less than AED 500,000  and not exceeding AED 1,000,000.<br /><br /><strong>14. Trade of antiquities without a right<br /><br /></strong>Article  33 stipulates penalties of imprisonment and a fine of not less than AED  500,000 and not more than AED 1,000,000 on any person using electronic  to engage in the unauthorized trade of antiquities and works of art.  Further, Article 34 stipulates penalties of imprisonment and a fine of  not less than AED 250,000 and not exceeding AED 1,000,000 on any person  using an electronic site to engage in the unauthorized use of, or  provide unauthorized facilities to others to use communication services  or audio and video channels.<br /><br /><strong>15. Communication services online<br /><br /></strong>Article  34 provides that it is an offence for any person to benefit or  unlawfully facilitate for others the use of communication services or  audio or visual transmission channels that are online. This provision  does not sanction the &ldquo;use&rdquo; of communications services or audio or  visual transmission channels that are online. In other words, the  provision sets a penalty for unlawfully accessing / obtaining  communications services on behalf of oneself or a third person online.  Article 34 imposes a fine ranging between AED 250,000 and AED 1,000,000  and/or imprisonment for a period not less than one year on any person  who benefits or unlawfully facilitates for others the use of  communication services or audio or visual transmission channels that are  online.<br /><br />The official translation from the Ministry of Justice  states that whoever uses communication services, audio or video  broadcasting channels without legal right, or facilitates such use by  others online shall be punished by imprisonment for at least one year  and/or a fine of not less than AED 250,000 and not exceeding AED  1,000,000.<br /><br /><strong>16. Narcotics and money laundering<br /><br /></strong>The  New Cyber Crime Law prohibits any person from establishing, operating  or supervising an electronic site or publishing information online for  the promotion of narcotics and psychotropic drugs. It stipulates a  penalty of temporary imprisonment and a fine of not less than AED  500,000 and not more than AED 1,000,000 which is an increase from the  penalty stipulated in the Cyber Crime Law which criminalized the same by  temporary detainment.<br /><br />Article 37 also stipulates penalties of  imprisonment and a fine of not less than AED 500,000 and not exceeding  AED 2,000,000 for any person using electronic sites to transfer or  deposit illegal funds with the intention to hide or camouflage their  source, or, for that matter, to hide or camouflage the facts about  illegal funds, their source, movement, ownership and the rights attached  to them as well as to acquire, own or use illegal funds despite  knowledge by the involved person of the illegal status of their sources.</p>'),
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(84777, 4622, 'content_description', 'Last month the President His Highness Shaikh Khalifa Bin Zayed Al Nahyan issued Federal Law No. 5 of 2012 (“New Cyber Crime Law\") a comprehensive piece of legislation on combating cyber crimes. The New Cyber Crime Law protects the privacy of information published online including data, information, credit card numbers, bank account statements and details of electronic payment methods.'),
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(84779, 4622, 'pageSummary', 'Last month the President His Highness Shaikh Khalifa Bin Zayed Al Nahyan issued Federal Law No. 5 of 2012 (“New Cyber Crime Law\") a comprehensive piece of legislation on combating cyber crimes. The New Cyber Crime Law protects the privacy of information published online including data, information, credit card numbers, bank account statements and details of electronic payment methods.'),
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(84787, 4622, '_yoast_wpseo_metadesc', 'Last month the President His Highness Shaikh Khalifa Bin Zayed Al Nahyan issued Federal Law No. 5 of 2012 (“New Cyber Crime Law\") a comprehensive piece of legislation on combating cyber crimes. The New Cyber Crime Law protects the privacy of information published online including data, information, credit card numbers, bank account statements and details of electronic payment methods.'),
(84788, 4623, 'content', '<p>With the EUR1.47 billion fine issued by the European Commission and  considering the lack of a consolidated competition law in the UAE,  businesses here may have been excused for being tempted to focus only on  their competitive activities related to operations in Europe. However,  with the publication on 23 October 2012 of UAE Federal Law No. 4 of 2012  Concerning Regulation of Competition (the &ldquo;Law&rdquo;) all businesses with  operations in the UAE or supplying goods and services to the UAE market  will have to ensure that they focus on and comply with the provisions of  this new law.<br /><br />On 23 February 2013 the Law will come into force  in the UAE regulating specifically competition in the form of  restrictive agreements, the abuse of dominant position and economic  concentration.&nbsp; With significant new penalties now being imposed for the  contravention of the Law, it must be a priority for businesses  operating in the UAE to consider the compliance of their local, and  wider, operations with this new legislative framework.<br /><br />This article is an introduction to the new Law and aims to provide a general overview of the Law only.&nbsp;<br /><br /><strong>Objectives of the Law<br /><br /></strong>A  very interesting and unorthodox legislative style from the UAE  legislator was to introduce an opening provision clarifying the policy  behind the Law. No doubt this approach will help the Courts, Competition  Regulation Committee and practitioners to place the provisions of the  law into perspective.<br /><br />The objectives of the new law are set forth in Article 2 as being twofold:</p>\r\n<ol>\r\n<li>Providing a stimulating environment for establishments in order to  enhance efficiency, competitiveness and the interest of consumers and to  achieve sustainable development in the UAE; and</li>\r\n<li>Keeping a competitive market governed by the market mechanisms in  accordance with the economic freedom principle through banning  restrictive agreements, business and actions that lead to the abuse of a  dominant position, controlling the operations of economic concentration  and avoiding all that may prejudice, limit or prevent competition.</li>\r\n</ol>\r\n<p><strong>Structure of the Law</strong></p>\r\n<p>The Law is arranged into a number of chapters, which include definitions and the objectives of the Law, as well as:</p>\r\n<ul>\r\n<li>Application of the Law (dealing with some exclusions);</li>\r\n<li>Anti-Competitive Practices;<br />o&nbsp;Restrictive Agreements; and&nbsp;<br />o&nbsp;Abuse of Dominant Position;</li>\r\n<li>Economic Concentration;</li>\r\n<li>Penalties;</li>\r\n<li>Competition Regulation Committee; and</li>\r\n<li>Responsibilities of the Ministry of Economy.</li>\r\n</ul>\r\n<p><strong>&ldquo;New&rdquo; Concepts</strong></p>\r\n<p>It will be noted from the stated objectives of the Law that the Law  introduces two important new concepts to the regulation of competition  in the UAE in the form of the terms &rdquo;Dominant Position &rdquo;and &ldquo;Economic  Concentration&rdquo;.&nbsp; These terms are defined as follows:<br /><br />Dominant  Position:&nbsp;The position that enables any establishment, by itself or in  participation with some other establishments, from dominating or  affecting the relevant market.<br /><br />Economic Concentration:&nbsp; &nbsp;Any  behavior from which a total or partial alienation (merger or  acquisition) of a property or usufruct of the properties, rights,  stocks, shares or liabilities of an establishment to another  establishment shall result and that may enable one establishment or a  consortium of establishments from controlling, directly or indirectly,  another establishment or a consortium of other establishments.<br /><br /><strong>Application of the Law<br /><br /></strong>The  Law provides that the provisions of the Law shall be enforced on all  businesses in relation to their economic activities in the UAE. The Law  further applies to the exploitation of intellectual property rights  whether in the UAE and abroad. Interestingly, the Law may also be  enforced against economic activities outside of the country that impact  competition in the UAE.<br /><br />As a result of the scope of the  application of the Law, individuals, corporates and syndicates will have  to consider their activities carefully whether in respect of  franchising rights, intellectual property licensing, mergers and  acquisitions or other commercial activities to ensure proper compliance  with the Law, and to consider how their business practices in other  jurisdictions may impact competition in the UAE in light of this new  Law.<br /><br />The Law provides for specific exclusions in respect of  regulated sectors that have specific competition rules including  Telecoms, Financial and Transport sectors.<br /><br /><strong>Anti-Competitive Practices &ndash; Restrictive Agreements<br /><br /></strong>The  restrictive agreements which are considered prohibited are mentioned as  a non-exclusive list of examples, and include agreements that have the  objective or effect of:</p>\r\n<ul>\r\n<li>Price Fixing;</li>\r\n<li>Determining conditions for sale or supply of services;</li>\r\n<li>Colluding in bids, practices and supplying offers;</li>\r\n<li>Market Sharing/Division and allocation; and</li>\r\n<li>Limiting the free flow of goods/ services to lead trade therein subject to artificial prices.</li>\r\n</ul>\r\n<p>The provisions of the Law related to restrictive agreements  accordingly appear to restate at least some existing provisions  contained in the Executive Regulations to the Consumer Protection Law  with more detail and with significantly more severe penalties.<br /><br /><strong>Anti-Competitive Practices &ndash; Abuse of Dominant Position<br /><br /></strong>The  Law introduces the &ldquo;dominant position&rdquo; concept into the regulation of  competition in the UAE.&nbsp; Article 6 of the Law provides that a business  with a dominant position in a market sector, or in a main and effective  part thereof, shall be prohibited from performing actions that lead to  the abuse of such position in order to prejudice, limit or prevent  competition.&nbsp; The Law lists a number of non-exclusive actions that are  prohibited, including those with the following objectives:</p>\r\n<ul>\r\n<li>Imposing the prices or conditions of reselling of commodities or services directly or indirectly.</li>\r\n<li>Selling a commodity or performing a service with a price less than  the actual cost thereof with the aim of hindering competitive  establishments from entering the relevant market, excluding them from  such market or causing them losses that prevent them from continuing  their activities.</li>\r\n<li>Discriminating with no justification among clients in identical  contracts in relation to the prices of commodities and services or the  conditions of buying and selling contracts.</li>\r\n<li>Obliging a client not to deal with a competitive establishment.</li>\r\n<li>The total or partial rejection to deal in accordance with the usual commercial conditions.</li>\r\n<li>Unjustified abstinence from dealing in commodities and services  through buying or selling or limiting or hindering such dealing that may  lead into imposing an unreal price thereof.</li>\r\n<li>Suspending the concluding of a buying or selling contract on the  condition of accepting obligations concerning other commodities or  services unrelated to the original contract.</li>\r\n<li>Purposively publish incorrect information about the commodities or its prices.</li>\r\n<li>Decrease or increase the available supply of the commodity so as to create an artificial scarcity or abundance of the commodity.</li>\r\n</ul>\r\n<p>The threshold for what percentage of a market share shall be deemed  to establish a Dominant Position shall be determined by Cabinet  decision.<br /><br />It is of interest to note that both restrictive  agreements and instances of the abuse of a dominant position can be  exempted from prohibition subject to approval of the Minister of Economy  and provided the agreement or activity will actually result in  enhancing economic development and competitiveness in the market.<br /><br /><strong>Economic Concentration</strong></p>\r\n<p>Articles 9 to 11 of the Law deal with economic concentration, the  threshold for which is also to be determined by Cabinet decision. The  Law requires a 30 day advance application to be filed with the Ministry  for approving an acquisition or merger transaction, providing as  follows:.</p>\r\n<ul>\r\n<li>The Ministry of Economy may approve an economic concentration  transaction if it would not have a negative impact on competition, or if  it would have a positive economic impact that outweighs any negative  impact on competition.</li>\r\n</ul>\r\n<p><strong>Penalties and Court Proceedings</strong></p>\r\n<p>The new Law provides for harsh penalties that are unprecedented in  UAE legislation which range from AED500,000 up to AED5 million. The  penalties may also be imposed based on the percentage of annual sales in  the cases of non compliant economic concentration transactions.<br /><br />Furthermore,  upon conviction, the court may order a business to be closed for a  period of no less than three months and no more than six months.<br /><br />All  competition court cases have been granted the advantage of expedited  cases and the Law allows for interim relief and temporary injunctions  pending final court judgment.<br /><br />With respect to criminal  proceedings, the Law stipulates that the Minister&rsquo;s approval is required  for initiating any criminal prosecution of acts contrary to the Law.  The Law also authorizes the Minister of Economy to reconcile any  contravention of the Law before a criminal case is transferred to the  Criminal Court in return for a settlement amount equivalent to no less  than double the minimum fine.&nbsp;<br /><br />It is important to note that the  Law specifically provides that no penalty issued against a party will  prejudice the right of an aggrieved party to seek compensation from that  offending party for damages resulting from its unlawful actions.&nbsp; The  financial risk to businesses contravening the Law is accordingly not  limited to the penalties provided for, but extends to possible civil  claims for damages.<br /><br /><strong>Competition Regulation Committee and the Ministry of Economy<br /><br /></strong>The  Law provides that a Competition Regulation Committee shall be  established and shall be chaired by the Under Secretary of the Ministry  of Economy.&nbsp; This would probably be a factor that may impact the  application of the Law in a smooth and timely manner. It is no secret  that Government committees struggle to convene when their composition is  made up of very busy public sector officials and prominent businessmen.  In most cases, the Committee Chair is engaged in multiple committees  and attending to various matters, all of which are important, which  renders the possibility to convene hostage to the work load of the  chairperson.<br /><br /><strong>Gaps<br /><br /></strong>The Law has not  provided a clear exemption or a specific treatment to family businesses.  Obviously a family business acquisition of another business in the same  group which may raise dominant position concerns may still qualify and  enjoy exemptions to be approved by the Minister. However the importance  of family businesses to the economy makes it worthy to address  separately provisions regulating this valuable constituent of UAE  businesses.<br /><br />Transactions occurring in the stock market demand  speed which would also require specific treatment and not subject to the  timelines requiring compliance in respect of economic concentration  transactions.<br /><br />Regional arrangements with competition regulatory  bodies would seem to be a sensible approach for corporations having to  comply with rules in a neighboring state. If the plan is to accomplish  harmony between GCC states, regulating competition should no doubt also  be at the top of the list of matters for harmonization of laws and  practices.<br /><br /><strong>Conclusion<br /><br /></strong>The enactment of  UAE Federal Law No. 4 of 2012 Concerning Regulation of Competition is an  important step in the evolution of competition law in the UAE.&nbsp; The  Executive Regulations to the Law and the thresholds determining market  power will add the necessary details to this Law.&nbsp;</p>\r\n<p>At this time, it is critical for businesses with operations in the  UAE or supplying goods and services in the UAE to ensure that their  operations (in the UAE and beyond its borders) comply with the new Law,  prior to it coming into force in February 2013.<br /><br />if you would like  further information or have any questions regarding this new law,  please contact Omar Obeidat, Partner &amp; Head of IP (<a href=\"mailto:o.obeidat@tamimi.com\">o.obeidat@tamimi.com</a>) or Marcus Wallman, Partner and Head of Commercial Advisory (<a href=\"mailto:m.wallman@tamimi.com\">m.wallman@tamimi.com</a>).</p>'),
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(84811, 4624, 'content', '<p>Other names used for similar or related concepts are &ldquo;Residences&rdquo; and &ldquo;Branded Apartments&rdquo;.&nbsp;Generally the concept of MSA, Residences or Branded Apartments will contain the following features:</p>\r\n<ol>\r\n<li>The Building will be of a higher quality.</li>\r\n<li>Commonly the MSA, Residences or Branded Apartments may sit along side a singly owned Hotel development.</li>\r\n<li>The offer of the Units by Owners for short term accommodation services is often a feature.</li>\r\n<li>In all cases, the development is branded and both Owners resident in  the development and any tenants or guests will be entitled to benefit  from a range of services provided by the Hotel Operator or arranged by  the Owners Association. A list of such Ameliorated Services is set down  in Part C &ndash; Commercial and Practical Considerations in Structuring MSA  schemes (&ldquo;Ameliorated Services&rdquo;).</li>\r\n</ol>\r\n<p>In this article we explore the legal backdrop to the concept of MSA.  It should be noted that this article does not purport to comment on the  licensing requirements of the Dubai Economic Department or Dubai Tourism  Commerce and Marketing<br /><br />The simple description above of a MSA  scheme belies what is in fact a relatively complex legal and commercial  arrangement with many potential variations possible.<br /><br />We consider in more detail below, the nature of MSA schemes under the following topics:</p>\r\n<p>A.&nbsp;The Legal Entities involved in providing MSA.</p>\r\n<p>B.&nbsp;The Relevant Legal Documentation.</p>\r\n<p>C.&nbsp;Commercial and Practical Considerations in Structuring MSA Schemes.</p>\r\n<p>D.&nbsp;Regulatory and other Issues Arising.<br /><br /><strong>A)&nbsp;The Legal Entities involved in providing MSA</strong></p>\r\n<p>In theoretical terms, once the development is complete the management  of the &ldquo;Common Areas&rdquo; and general administration of the development  should pass to the Owners Association formed pursuant to Law No 27 of  2007 on Ownership of Jointly Owned Properties in the Emirate of Dubai  (&ldquo;JOP Law&rdquo;) and regulated pursuant to RERA&rsquo;s &ldquo;Directions&rdquo; to the JOP  Law.<br /><br />The investors become the Owners of the Units. By virtue of  their ownership, Owners are members of the Owners Association, are  entitled to vote at meetings of the General Assembly and be elected as  Board members of the Owners Association.<br /><br />If therefore the  developer wants to ensure that there is the ability for a Hotel Operator  to operate from the development, this will have to be procured by a  contract with the Owners Association.<br /><br />The Owners of the Units  will also need to enter into their own private arrangement with the  Hotel Operator for the rental of their Unit, should they wish to use the  Rental Pool.</p>\r\n<p><strong>B)&nbsp;The Legal Documentation</strong></p>\r\n<p>The principal document relevant to the creation of a MSA scheme is  the Sale and Purchase Agreement (&ldquo;SPA&rdquo;), between the developer and  investors. Ideally, the SPA should fully disclose or make sufficient  reference to the documents set out and discussed below:</p>\r\n<ol>\r\n<li>The constitutional document pursuant to the JOP Laws and Directions  is known as the Jointly Owned Property Declaration. This document needs  to set out clearly the role of Hold Co (discussed below) and the Hotel  Operator.</li>\r\n<li>The Hotel Operator will need to have the right to provide the  Ameliorated Services, as well as operate the Rental Pool and provide  various other branding and consulting services. In addition, the Owners  Association may need to be compelled to provide certain Ameliorated  Services. These aspects are normally dealt with in a framework agreement  which, for the purposes of this Article, we will call the &ldquo;MSA  Framework Agreement&rdquo;. This MSA Framework Agreement is not to be confused  with (though may incorporate features of) an association manager&rsquo;s  agreement or facilities management agreements (see the table in Part C  which sets out the various services).</li>\r\n<li>Hotel Operators are normally appointed pursuant to separate  operational and technical services agreements between the Hotel Owner  and the Hotel Operator.</li>\r\n<li>If the MSA development sits alongside part of a Hotel development,  the developer may wish to ensure that the Owner of the Hotel has the  right to also remove the Hotel Operator from the development comprising  the Branded Apartments.</li>\r\n<li>Therefore, the developer would need to ensure that the Hotel  Operator did not have the MSA Framework Agreement directly with the  Owners Association. Accordingly, the developer should set up a holding  company (&ldquo;Hold Co&rdquo;) to enter into the MSA Framework Agreement and then  create a separate operational and technical services agreements (on a  back to back basis) with the Hotel Operator (&ldquo;Operator Agreements&rdquo;) in  relation to the Branded Apartments.</li>\r\n<li>Without the use of Hold Co, the Owners Association would have a  contract directly with the Hotel Operator complicating the ability of  the Hotel Owner to remove the Hotel Operator from the Branded Residences  or the ability to assign the rights under the MSA Framework Agreement  to any purchaser of the Hotel.</li>\r\n<li>Unit Owners have jurisdiction over their Units and accordingly it is  for them to enter into any arrangement with the Hotel Operator for the  management of their Units. As the Hotel Operator will require rental  stock to operate, a Rental Pool Agreement needs to be appended to the  SPA, with the relevant investor&rsquo;s agreement to enter into this. As for  the MSA Framework Agreement referred to above, it may be more  appropriate that the Rental Pool Agreement be between Hold Co and the  investors, though operationally the Hotel Operator would be appointed  (pursuant to the Operator Agreements) as Hold Co&rsquo;s agent to enter into  the Rental Pool Agreements and operate the Rental Pool.</li>\r\n</ol>\r\n<p>The Rental Pool Agreement will generally entitle the Hotel Operator  or Hold Co (as the case may be) to manage the Unit for a fee. The  obligations on the Hotel Operator or Hold Co would generally include;  arranging tenants and occupiers, maintaining the Unit, paying all  outgoings in relation to the Unit and paying the balance of the revenues  to the Unit Owner.<br /><br />Whilst it may be possible to design the MSA  scheme independently of the Hotel Operator and endeavour to incorporate  the necessary flexibility to adapt to the requirements of any Hotel  Operator, generally such schemes are designed in tandem with the Hotel  Operator at the conceptual and design phases of the development.<br /><br />The  developer / Hold Co and the Hotel Operator would also enter into the  Operating Agreements relating to the Hotel and/or MSAs. It is important  in doing this that any commercial considerations in such documents are  also carried down through the documents referred to in 1 to 6 above in  so far as they relate to or in any way impact on the legal entities  referred to.</p>\r\n<p><strong>C) Commercial and Practical Considerations in establishing a MSA scheme</strong></p>\r\n<p>Considerable effort and consideration needs to be put into MSA  schemes to ensure that they meet the expectations of investors and the  Hotel Operator without conflict, and with clarity on the structuring. It  is important to remember that not all of the investors may want their  Units to form part of the Rental Pool, and some investors may want to  actually reside in the development.<br /><br />For resident Owners, they may  not want many of the services that the Hotel Operator provides as  mandatory and for which they have to pay for. They may nonetheless be  happy to pay for some services on a &ldquo;User Pays&rdquo; basis.<br /><br />For other  investors, there can be the inclination to see any Ameliorated Services  as being the obligation of the Hotel Operator (as they are operating a  business from the Common Areas of the development and profit from same),  and therefore the costs should be met out of the Hotel revenues.  Accordingly the exact service, cost and revenue matrix needs to be  developed and investors made aware of same.<br /><br />We consider, in  simple terms, the services to be offered in relation to a development  comprising MSA fall into the categories set down in the table below.</p>\r\n<table border=\"1\" cellspacing=\"0\" cellpadding=\"2\" align=\"center\">\r\n<tbody>\r\n<tr>\r\n<td align=\"center\" valign=\"top\">\r\n<h6><strong>Association Management&nbsp;</strong><strong>Services (a service to the&nbsp;</strong><strong>Owners Association (&ldquo;OA&rdquo;)).</strong></h6>\r\n</td>\r\n<td align=\"center\" valign=\"top\">\r\n<h6><strong>Contracted Services (facilities&nbsp;</strong><strong>management) provided in relation to Common Areas.</strong></h6>\r\n</td>\r\n<td align=\"center\" valign=\"top\">\r\n<h6><strong>Ameliorated Services (a la&nbsp;</strong><strong>carte and other similar&nbsp;</strong><strong>hotel type services)</strong></h6>\r\n</td>\r\n</tr>\r\n<tr>\r\n<td valign=\"top\">\r\n<ul>\r\n<li>Working with OA Board to develop strategies for management of common areas;</li>\r\n</ul>\r\n<ul>\r\n<li>Preparing annual budgets;</li>\r\n</ul>\r\n<ul>\r\n<li>Negotiating supply contracts; &nbsp;</li>\r\n</ul>\r\n<ul>\r\n<li>Supervising contractors;</li>\r\n</ul>\r\n<ul>\r\n<li>Attending to day-to-day operational matters and correspondence;</li>\r\n</ul>\r\n<ul>\r\n<li>Implementing decisions of OA and Board;</li>\r\n</ul>\r\n<ul>\r\n<li>Keeping books and records as required by law;</li>\r\n</ul>\r\n<ul>\r\n<li>Supervising defect repairs and warranty claims;</li>\r\n</ul>\r\n<ul>\r\n<li>Coordinating insurances and insurance claims;</li>\r\n</ul>\r\n<ul>\r\n<li>Issuing service charge notices and collecting payments;</li>\r\n</ul>\r\n<ul>\r\n<li>Facilitate submission of technical, financial and management reports to&nbsp; Board and OA;</li>\r\n</ul>\r\n<ul>\r\n<li>Dealing with complaints from Owners;</li>\r\n</ul>\r\n<ul>\r\n<li>Coordinating and attending Board and General Assembly meetings,&nbsp;&nbsp; sending notices of meetings and maintaining minutes;</li>\r\n</ul>\r\n<ul>\r\n<li>Follow up on legal matters on behalf of OA;</li>\r\n</ul>\r\n<ul>\r\n<li>Representing OA with governmental and quasi- governmental entities.</li>\r\n</ul>\r\n</td>\r\n<td valign=\"top\">\r\n<ul>\r\n<li>HVAC plant and equipment;</li>\r\n</ul>\r\n<ul>\r\n<li>Electrical Systems;</li>\r\n</ul>\r\n<ul>\r\n<li>Plumbing Systems</li>\r\n</ul>\r\n<ul>\r\n<li>Minor Civil Works;</li>\r\n</ul>\r\n<ul>\r\n<li>Uninterrupted Power Supply;</li>\r\n</ul>\r\n<ul>\r\n<li>Pressurization systems;</li>\r\n</ul>\r\n<ul>\r\n<li>General Building Supervision;</li>\r\n</ul>\r\n<ul>\r\n<li>Maintenance of swimming pool;</li>\r\n</ul>\r\n<ul>\r\n<li>Water tank maintenance and cleaning;</li>\r\n</ul>\r\n<ul>\r\n<li>Lifts and Elevators;</li>\r\n</ul>\r\n<ul>\r\n<li>Cleaning;</li>\r\n</ul>\r\n<ul>\r\n<li>Security Services;</li>\r\n</ul>\r\n<ul>\r\n<li>Pest control services;</li>\r\n</ul>\r\n<ul>\r\n<li>Gardening;</li>\r\n</ul>\r\n<ul>\r\n<li>Painting and decorating of Common Areas;</li>\r\n</ul>\r\n<ul>\r\n<li>Repairs and maintenance of Common Areas;</li>\r\n</ul>\r\n<ul>\r\n<li>Audit;</li>\r\n</ul>\r\n<ul>\r\n<li>Valuations;</li>\r\n</ul>\r\n<ul>\r\n<li>Architectural and engineering consulting;</li>\r\n</ul>\r\n<ul>\r\n<li>Reserve Fund Studies;</li>\r\n</ul>\r\n<ul>\r\n<li>Legal Services;</li>\r\n</ul>\r\n<ul>\r\n<li>Design assistance.</li>\r\n</ul>\r\n</td>\r\n<td valign=\"top\">\r\n<ul>\r\n<li>The Rental Pool including a booking service and property management services;</li>\r\n</ul>\r\n<ul>\r\n<li>Housekeeping and cleaning services;</li>\r\n</ul>\r\n<ul>\r\n<li>Arranging linen services;</li>\r\n</ul>\r\n<ul>\r\n<li>Additional security control;</li>\r\n</ul>\r\n<ul>\r\n<li>Childcare services;</li>\r\n</ul>\r\n<ul>\r\n<li>Property maintenance services and repairs;</li>\r\n</ul>\r\n<ul>\r\n<li>A mini bar service;</li>\r\n</ul>\r\n<ul>\r\n<li>A food and beverage service;</li>\r\n</ul>\r\n<ul>\r\n<li>The use of specialist Club facilities</li>\r\n</ul>\r\n<ul>\r\n<li>A valet service;</li>\r\n</ul>\r\n<ul>\r\n<li>Porterage services;</li>\r\n</ul>\r\n<ul>\r\n<li>Bellboys;</li>\r\n</ul>\r\n<ul>\r\n<li>Full time reception;</li>\r\n</ul>\r\n<ul>\r\n<li>Full time caretaker;</li>\r\n</ul>\r\n<ul>\r\n<li>Services including towels, chairs, umbrellas and related services and equipment.</li>\r\n</ul>\r\n</td>\r\n</tr>\r\n</tbody>\r\n</table>\r\n<p><br />Note: services specifically related to Units in the Rental Pool  are excluded from consideration in the table as any costs associated  with such Units would be for the Owner of that Unit under the Rental  Pool Agreement. If the costs of providing services in relation to such  Units formed part of the budget for the Owners Association this would  severely prejudice those Owners who chose not to put their Units into  the Rental Pool. It is the case however, that services in relation to  the Units are covered in the Rental Pool Agreement, it being a private  arrangement between the Unit Owner and Hold Co/the Hotel Operator and  the costs of the same are deducted from the revenues obtained from  letting out the Unit.<br /><br />The Association Management Services are  clearly a cost of the Owners Association and would be budgeted for and  paid for by Owners through their payment of Service Charges. Likewise  the Contracted Services would ordinarily be contracted for by the Owners  Association in the same fashion.<br /><br />The controversial category  (should we take the view of the cost conscious resident Owner) will be  the Ameliorated Services. Some of these may be able to be provided on a  &ldquo;User Pays&rdquo; basis, such as the putting of a Unit into the Rental Pool or  Unit maintenance services. If this is the case those &ldquo;User Pays&rdquo;  services would ordinarily be removed from the Owners Association budget.  Some Ameliorated Services may however be less easily categorized as  &ldquo;User Pays&rdquo;. Take for example &ldquo;Reception&rdquo; services and &ldquo;Bell Boy&rdquo;  services which may be used by all Owners and occupiers and not just  guests to the Rental Pool. In such cases it needs to be clear whether  the Hotel meets the costs of the same or the services are procured by  the Owners Association and paid by Owners through their payment of  Service Charges.<br /><br />Another potentially problematic aspect of MSA,  is that the Hotel Operator may also want to control the nature of the  services offered to the Owners Association by service providers and  choose service providers to ensure that it can meet its Brand Standards.  Sometimes the Hotel Operator may want to provide services itself and in  such circumstances there may need to be a process to benchmark and  apportion costs.<br /><br />Careful consideration from both a legal and  commercial perspective needs to be given to the issues raised in this  Part C and it is suggested that appropriate disclosure of the  arrangements may reduce the potential for disputes with Owners or the  Owners Association at a later date.<br /><br /></p>\r\n<p><strong>D)&nbsp;Regulatory and other Issues Arising</strong></p>\r\n<p>Readers may appreciate that a MSA scheme is a more complicated  ownership arrangement than simply owning an apartment in a building  which is nonetheless regulated pursuant to the JOP Laws and Directions.<br /><br />It  should be emphasized furthermore that if developers could bind the  Owners Association to long term contracts this could seriously undermine  the freehold nature of the investment.<br /><br />MSA arrangements are not  surprisingly therefore regulated in the Directions. In particular the  following provisions of the Directions may apply should RERA determine:</p>\r\n<ol>\r\n<li>Restrictions on the length of all Supply Agreements (of which the  MSA Framework Agreement would be one) with the Owners Association to no  more than 3 years.</li>\r\n<li>Article 17 of the Direction for General Regulation ensuring that the  content of all Supply Agreements are fair, clear and have appropriate  mechanisms ensuring quality.</li>\r\n<li>Article 34 of the Direction for General Regulation which may  restrict the ability of the Developer to enter into Supply Agreements on  behalf of the Owners Association.</li>\r\n</ol>\r\n<p><strong>In addition it is likely that RERA may require:</strong></p>\r\n<ol>\r\n<li>An Association Manager, registered with the Dubai Economic  Department and RERA, to be appointed to perform the various statutory  association management services set down in the Direction for  Association Constitution and as summarised above in Part C.</li>\r\n<li>The Management Agreement be registered with RERA in accordance with Article 17(1)(d) of the Direction for General Regulation.</li>\r\n</ol>\r\n<p>It is probable that RERA may exercise its discretion as above, having  regard to the fairness of the scheme overall on Owners. In addition it  is very likely that RERA may also consider, in exercising its  discretion, the extent to which the developer has complied with the  disclosure regime set down in the Direction for General Regulation and  therefore the extent to which the investor appreciated the nature of the  scheme into which he was investing.&nbsp;<br /><br />The above represents an  overview of a managed and serviced apartment scheme in the context of  Dubai regulation to date. As mentioned this Article does not deal with  licensing considerations.</p>'),
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(84834, 4625, 'content', '<p>UAE Federal Law No. 37 of 1992 Concerning Trademarks provides in Article 2 that:<br /><br /><em>&ldquo;A  trademark is anything which takes a distinctive form whether names,  words, signatures, letters, figures, drawings, symbols, titles, tax  stamps,</em>&nbsp;<em>seals, pictures, inscriptions, advertisements or packs or any other mark or a combination thereof&hellip;.&rdquo;</em><br /><br />It  will be noted that the definition of a trademark requires a mark to  &ldquo;take a distinctive form&rdquo; and single colours as such cannot be  considered to be inherently distinctive. Despite this requirement of  distinctiveness and the absence in the definition of specifically  dealing with single colours (or even a combination of colours), the  definition of a trademark has proven to be sufficiently wide to allow  for the interpretation that a single colour can in fact function as a  trademark in the UAE.&nbsp; This was confirmed by the registration in the UAE  back in April 2007 of a single colour trademark for a shade of orange  in respect of a particular rice product.&nbsp;<br /><br />As single colour  trademarks are considered less conventional and are not commonly applied  for or as a rule accepted for registration, ongoing developments in  respect of single colour trademarks in jurisdictions outside of the UAE  remains of interest to trademark practitioners and owners in the UAE as  it provides some guidance on the kind of considerations that may be  relevant in applying for and objecting to single colour trademark  applications here in the UAE.<br /><br />In this article the recent judgment  in the UK case involving Cadbury&rsquo;s application for the registration of a  shade of purple is reviewed as the logic applied by the court (rather  than the legal principles) could be of assistance in local matters.<br /><br /><strong>Background of the UK case<br /><br /></strong>In  2004, Cadbury applied to register the Cadbury shade of purple  (identified on the Pantone colour chart as Pantone 2685C) as a trademark  in the UK in respect of the following goods:<br /><br />\"chocolate in bar  form, chocolate confectionery, chocolate assortments, cocoa-based  beverages, preparations for cocoa-based beverages, chocolate based  beverages, preparations for chocolate based beverages, chocolate  cakes\".&nbsp;<br /><br />The application was rejected by the UK Trademark  Registry on the ground that it was \"devoid of distinctive character\" &ndash;  i.e. that is the mark is incapable of serving the function of a  trademark and identifying the origin of the goods to which it was  applied.<br /><br />Cadbury filed evidence that the colour purple mark had  &ldquo;acquired distinctiveness through use&rdquo;, showing that the mark had been  used so extensively that consumers had come to recognise it as  identifying Cadbury&rsquo;s goods alone. In particular it was submitted that  Cadbury had been using its colour purple trademark since 1914.<br /><br />The  UK Trademark Registry accepted the evidence and the application for  registration of the mark for the majority of goods applied for. The  examiner found that there was no inherent distinctive character in the  colour purple mark, but there was a significant body of evidence  suggesting that the mark had in fact acquired distinctiveness.<br /><br />Although  the application for the colour purple mark was accepted by the UK  Trademark Registry, it was opposed by another confectionery producer as  it also used a shade of purple in respect of one of its own brand of  chocolate products.&nbsp;<br /><br /><strong>The objection to the colour purple trademark</strong><br /><br />On  appeal to the High Court of the UK, the UK Trademark Registry&rsquo;s  findings on the acquired distinctiveness of the colour purple trademark  were not placed in dispute. Instead the appeal was based on the  contention that the colour purple trademark did not meet the definition  of a sign as the mark had no distinctive character (this kind of  argument may also be of particular relevance here in the UAE where the  Law does not deal with the concept of &ldquo;acquired distinctiveness&rdquo;).<br /><br />The  question of single colour trademarks has been the subject of several  European Court of Justice (ECJ) decisions. The ECJ case of Libertel  Groep BV v Benelux-Merkenbureau was the first case to expressly  acknowledge that a colour could be registered as a trademark provided  that the colour is described and accompanied with a Pantone reference.  Such a reference allows the mark to be identified clearly which is a  requirement of a sign capable of graphic representation and therefore  registration. In addition however, it is required also that a Court must  consider the context of the particular case in order to make a  determination on the registration of a single colour trademark.<br /><br />In  the appeal, the appellant cited a later ECJ case (following the  Libertel case) involving Dyson Limited and the Registrar of Trademarks  which held that the abstract concept of a transparent bin for a vacuum  cleaner was not capable of registration as a trademark. The appellant  argued that the logic applied in the Dyson case should be extended to  abstract colours so as to prevent an unfair competitive advantage being  obtained by possible registrants.<br /><br />In the appeal the Judge  considered the decisions of the ECJ and decided the case in favour of  Cadbury.&nbsp; The opposition to the application of the colour purple mark  although unsuccessful overall, did result in the trademark registration  being limited to the following goods: \"chocolate in bar and tablet form;  chocolate for eating; drinking chocolate; preparations for making  drinking chocolate\".&nbsp; The reason for this was that the evidence in this  case showed that other manufacturers also used a purple colour in  respect of cakes and chocolate assortments, while Cadbury itself used  colours other than its particular shade of purple in respect of its own  chocolate assortments.&nbsp;<br /><br /><strong>Important limitations<br /><br /></strong>This  case shows that the UK courts will limit a monopoly granted in respect  of a particular colour in order to ensure that the monopoly only extend  to the genuine and proven interests of an applicant.&nbsp; The protection  granted to Cadbury is not for a shade of purple generally, but for the  very particular and objectively identifiable shade of purple it uses  (Pantone 2685C).&nbsp; Cadbury\'s trademark will accordingly only be infringed  if a shade of purple so similar to the colour identified as Pantone  2685C is used, as to be indistinguishable.<br /><br />Further, protection  for the Cadbury&rsquo;s purple trademark was rejected in respect of many of  the goods included in the original trademark application.&nbsp; This included  goods such as chocolate assortments and cakes, even though Cadbury  submitted evidence proving the use of its specific colour purple in  respect of such goods.&nbsp; The conclusion that can be reached in this  regard is that courts in the UK at least will take a very conservative  approach in granting exclusivity in respect of single colour trademarks  requiring use of the relevant colour mark over a significant period of  time, a very strong association between the relevant trademark owner and  the goods bearing the single colour mark, and the use of the single  colour in relation to particular products being close to exclusive.&nbsp;<br /><br /><strong>What does this case mean for trademark protection in the UAE?<br /><br /></strong>Although  the decision in the Cadbury matter took place in the UK under UK laws  and in consideration of ECJ judgments, there is a possibility that both  the trademarks registry in the UAE and the local courts would follow a  similarly conservative approach in granting a possible monopoly on the  use of a single colour as a trademark.&nbsp; Further, the logic applied in  this case in dealing with the question of distinctiveness and the kind  of evidence required to support a conclusion that a single colour can  function as a distinctive trademark, should be of assistance to the  trademarks registry, the UAE courts and accordingly interested  applicants (and opponents) in dealing with applications for single  colour trademarks in the UAE.<br /><br />In practice, it would accordingly  be advisable for parties seeking protection for single colour trademarks  in the UAE to (i) clearly define the relevant colour in a way that is  objectively determinable; (ii) to consistently use the relevant colour  in practice; (iii) to prevent the use of shades of the relevant colour  by others (to the extent this may be possible) in respect of the same  category of goods / services; and (iv) to keep good record of the  development of the particular shade of the colour (if developed  specifically), packaging, marketing and advertising materials as  evidence .<br /><br /><strong>Conclusion<br /><br /></strong>It is important to  bear in mind that Cadbury&rsquo;s use of its shade of purple started back in  1914 which was an important fact considered by the court in this matter.  As Cadbury had almost a century of use of its colour purple to rely on,  the ownership of single colour trademarks &ndash; also here in the UAE - is  likely to continue to be an exception rather than the rule.</p>'),
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(84195, 4591, 'content_description', 'End of service gratuity (“ESG”) is a topic that is currently stirring much debate.  In particular, it was recently reported that after conducting a study into the ESG system, the World Bank recommended the establishment of a pension fund for expatriate employees to replace or supplement ESGs. '),
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(98439, 5347, 'content', 'March 2016\r\n\r\n<hr />\r\n\r\nMany of these hotels are operated by companies based in a single jurisdiction, but have global brand names well-known to consumers as a result of globalization and increased tourism and travelling. Unfortunately many operators neglect to register their trademarks nationally or internationally, and in many cases have failed to enforce their trademarks outside of their core geographic market. Recently, there is an increasing trend of businesses venturing into the hospitality industry, and consequently, trademark disputes have increased as a result of their geographic expansion. For example, a notable lawsuit occurred between the infamous “The Plaza Hotel” in New York and the “Union Plaza,” also known as “Plaza Hotel and Casino” in Las Vegas. Although many hotels are established in one location, their brand name precedes them, and is therefore known all over the world. As a result, consumer confusion is extremely likely when one travels from New York to Las Vegas and sees THE PLAZA mark. A logical association is made between the two businesses, as the brand is notorious and the name is seemingly the same.\r\n\r\nInternational trademark disputes in the hospitality industry create tension between two important legal trademark principles: the territoriality principle and the ‘famous trademark’ doctrine. According to the territoriality principle, trademark rights are determined on a jurisdictional (i.e. country-by-country) basis; whereas the ‘famous trademark’ doctrine (or ‘well-known’ trademark doctrine) is the general exception to the territoriality principle, and refers to the idea that a trademark can be given protection in a jurisdiction due to how famous it is, even though it is not registered or used in the jurisdiction.\r\n\r\nArticle 6(3) of the Paris Convention highlights the territoriality principle, providing that a “mark duly registered in a country of the [Paris] Union shall be regarded as independent of marks registered in other countries of the Union, including the country of origin.” However, Article 6bis of the Paris Convention lays out the well-known trademark exception, stating, “The countries of the Union undertake [...] to refuse or to cancel the registration, and to prohibit the use, of a trademark which constitutes a reproduction, an imitation, or a translation, liable to create confusion, of a mark considered [...] to be well known in that country as being already the mark of a person entitled to the benefits of this Convention and used for identical or similar goods.” This exception is further expanded to apply to service marks, which would include hospitality industry services, in Article 16(1) of the Agreement on Trade Related Aspects of Intellectual Property Rights. According to these agreements, actual use of a trademark in a foreign country is not essential to establish the mark is well-known. Therefore, reverting back to the earlier example, THE PLAZA is a well-known mark in Dubai, even though the only branch is in New York; this may be a result of media attention or movie settings, but irrespective of why, THE PLAZA is a well-known mark worldwide.\r\n\r\nInternational hospitality disputes are not new, but they are becoming increasingly frequent and complex, with the results being uncertain. In a recent case handled by Al Tamimi &amp; Company, a very famous and well-known hotel in India sought to sue two different Indian restaurants by the same name, one being located in Kuwait and an unrelated, separate one being located in the UAE. The hotel sought to sue the restaurants on the grounds of trademark infringement, among other claims. The UAE Trademarks Office analyzed the trademark owner’s multiple trademark registrations, evidence of fame (including the international and national awards won by the hotel and the Indian celebrities that visited it) and found that the UAE based restaurant was infringing on a well-known mark. In Kuwait, however, the results were not as easily obtained. The matter in Kuwait was assigned to be assessed by an Intellectual Property Expert and is currently pending a decision\r\n\r\nConflicting results are often due to the fact that there is no set criteria for a mark to be labelled as “well-known” or “famous;” moreover, it is often difficult to ascertain that a mark is well-known when the examiner may have never heard of the mark in the particular jurisdiction. For this reason, the examiners in the UAE reviewed an array of evidence relating to the hotel’s brand, consumer recognition, advertisements, media attention, and more to assess whether the mark was famous.\r\n\r\nThese types of disputes are continually on the rise, and the increase is likely to be noticeable in Dubai, as hundreds of restaurants and hotels will open between now and the 2020 Expo. It is important for brands in the hospitality industry to protect their marks and maintain the ability to geographically expand. First and foremost, the company must assess and identify which countries it may reasonably expect to expand into, and for those countries, the company should attempt to register their trademarks. In the countries where registration is sought, it is important to note the requirements to maintain registration. For example, advertising of the hospitality services (or some type of marketing) under the mark to travellers to the hotel, may be sufficient to obtain and maintain registrations, even though the hotel or company does not actually provide hospitality services in the country in question.\r\n\r\nIn countries of interest where the company was not able to successfully register or foresees that the hotel may face trademark issues after assessing the results of a trademark search, the hotel or company should maintain records to establish that it is a well-known or famous mark. As in the previously mentioned case with the Indian hotel and the Indian restaurant by the same name in the UAE, the hotel relied on publications and media that arguably reached consumers in the country. Other possible forms of evidence include accounting records demonstrating advertising or marketing expenses in the country, customer lists identifying guests from the country who have visited the hotel, and internet logs identifying visits to the company’s website from users in the country. It should be noted that often proving that a mark is well-known or famous requires evidence spanning several years.\r\n\r\nIt is not only important for businesses in the hospitality industry to act pre-emptively, such as the actions suggested above, but it is also important for these businesses to take action and enforce against possible infringements in countries of interest. This is important to ensure that the company can expand in the future and avoid litigation against an established entity in the country of interest. With a rapidly growing economy, and with the 2020 Expo just around the corner, it is imperative for brand names in the hospitality industry to protect their marks in the UAE and neighbouring region.\r\n\r\n&nbsp;'),
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(98397, 5345, 'content_description', 'In a hospitality project which involves funding from one or several financial institutions, it will often be a requirement that the lender group, or their representative, enters into a direct agreement with the hotel operator and the hotel owner. '),
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(98399, 5345, 'pageSummary', 'In a hospitality project which involves funding from one or several financial institutions, it will often be a requirement that the lender group, or their representative, enters into a direct agreement with the hotel operator and the hotel owner.'),
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(98411, 5345, '_yoast_wpseo_metadesc', 'In a hospitality project which involves funding from one or several financial institutions, it will often be a requirement that the lender group, or their representative, enters into a direct agreement with the hotel operator and the hotel owner.'),
(98412, 5346, 'content', 'March 2016\r\n\r\n<hr />\r\n\r\nThe MENA region is one of the most rapidly developing hospitality markets with a continuous influx of international hotel brands. A 2015 study conducted by Knight Frank found that international operators are responsible for operating approximately 61% of the total hotel supply in the region, whilst international brands operate 24% of the existing supply in relation to serviced apartments. A study conducted by the Dubai Department of Tourism and Commerce Marketing predicts that by the end of 2016 Dubai is expected to see a tremendous rise in new hotels including Renaissance Dubai Downtown, The Westin Dubai, and W Hotel Palm Jumeirah, bringing total rooms to 110,000 and by 2020 to 150,000. As new hotels continue to open, one of the greatest challenges facing hotels today is competition. As customers now have greater choice, the intense competitive market has forced hotel brands to focus on providing memorable experiences to their guests rather than selling a service. As such, a dedicated focus on customer loyalty and brand name is prerequisite for the survival of hotels today.\r\n\r\nA hotel trademark acts as an essential identifier. A hotel’s trademark is associated with a hotel’s image, reputation, design, cleanliness, hospitality, demographics and underlying value or quality of a hotel. Such association ultimately leads to an identity of a hotel and is often perceived as the personality of an intangible entity: the Brand.\r\n\r\n<strong>Hotel Rooms: a commodity or a quality service?</strong>\r\n\r\nThe industry has witnessed the rise of new online service providers such as Airbnb, Expedia, Hotel Search and Booking.com. Airbnb alone has served over 30 million guests since 2008. Nevertheless, Airbnb appears to be less damaging to hotels than Uber may have been to pre-existing licensed taxis. This is partly due to the fact that before the internet the market for renting a room (in the commodity sense of a service) was not limited to hotels (renting rooms in the quality sense of a service). Airbnb has however been a platform to combine and grow this market. The brand operating the hotel is the main reason why hotels will continue to grow, as they offer assurance and predictable consistency in quality service, amenities and facilities.\r\n\r\n<strong>Rise of Mobile Apps</strong>\r\n\r\nMobile apps and specialized accommodation websites have allowed customers more freedom to choose the best value options for their preference, opening the path to healthy and fair competition after it was restricted to tourist agencies (who would often use restricted lists). Guests are presented with cheaper accommodation and flexibility in relation to checking in and checking out. However, many of the mobile apps themselves face fierce competition from new comers year on year, and so these platforms always need to improve and invest into research and development to keep their apps and sites friendly and attractable to consumers, and allow the hotel brands excellent exposure with minimal expenditure.\r\n\r\n<strong>But is it all good? </strong>\r\n\r\nNot quite. As with anything in the cyber world, the forums, apps, and sites related to hotels allow for ratings, reviews and commenting by consumers and users on their experience or opinion to be shown adjacent to the hotel brands. Regardless of how objective or truthful, the reviews reflect opinions of users not that of the internet based company. This may be at times damaging to the brand if the reviews posted next to the name of a certain hotel have rated the brand unfairly below what it represents. The integrity of a trademark may be held hostage to exaggeration or non credible opinions. It would nonetheless be fair to argue that however opinionated users may be, the overwhelming sensible reviews would balance against those that draw an untrue picture. Furthermore, and as a result of the tremendous exposure offered by the online world, those less fortunate brands and hotel brand owners who previously could not afford advertisement are now on par with the 5*+ hotels in terms of exposure. This is obviously good for these brand owners yet narrows the gap previously enjoyed by the richer hotels.\r\n\r\n<strong>What does this mean to Hotel Brand owners?</strong>\r\n\r\nThe internet has shifted the advertisement of a trademark and its use from printed media to online. This means that whereas printed media was under control of and instructed by hotel brand owners, the online use is controlled by third parties. The responsibility lies with the hotel brand owners to monitor proper online use of their trademarks in a manner consistent with its branding guidelines. Hotel brand owners also need to secure registration of their trademark and defend the integrity of the brand by taking action against any social media accounts, professional forum accounts, mobile apps or hotel related sites that misappropriate their trademark. This may mean putting in place mechanisms to monitor against misuse, infringements, cyber-squatting, and misappropriation of the brand.\r\n\r\n&nbsp;'),
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(98378, 5344, 'content_description', 'The renovation of a hotel can have many traps for both Contractors and Developers.  If these issues are not properly allowed for, you can lose your reputation and be embroiled in a dispute for years!!  '),
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(98393, 5345, 'content', 'March 2016\r\n\r\n<hr />\r\n\r\nThe purpose of this agreement is to clearly set out the relationship between these three stakeholders and how the financing agreements between the financiers and the hotel owner and hotel management agreements between the hotel owner and the hotel operator will fit together. This requirement often emanates from both the hotel operator and the financiers as it is in their common interest to reach a clear agreed position.\r\n\r\nThere will often be some conflicting provisions between the hotel management agreement and the financing agreements and part of the job of the direct agreement is to iron out any such conflicts. Although united by the common purpose of operating the hotel efficiently, the three key stakeholders tend to have differing priorities. The priorities of the operator would be to protect (i) its right to operate the hotel for the anticipated term, (ii) its autonomy as regards operational matters, (iii) its revenue and (iv) its brand and intellectual property. The owner will want the hotel to be a success and will want to support the operator and financiers in reaching agreement, as this will be critical to the success of the project. The financiers usually understand the position of the operator and the owner, but have their own requirements as regards the extent of security and operational control required in respect of the particular project. Notwithstanding the potential for conflict between these stakeholders, there is one key factor which unites them and that is the desire for the hotel project to be completed and for the hotel to operate smoothly and profitably.\r\n\r\nIn this article we will comment upon four key areas which are significant for the stakeholders to consider, which are usually covered in a direct agreement. These are:\r\n<ul>\r\n 	<li>bank accounts;</li>\r\n 	<li>non disturbance of the operator;</li>\r\n 	<li>insurance requirements and application of insurance proceeds; and</li>\r\n 	<li>termination.</li>\r\n</ul>\r\n<strong>Bank accounts</strong>\r\n\r\nHotel projects usually involve a number of bank accounts, with payments moving between them as agreed under the hotel management agreement and facility agreement. The typical structure is that hotel revenue is paid into the hotel operating account and applied towards hotel operating costs. Any profit is subject to various deductions, such as management fees payable to the operator and/or a contribution towards a maintenance and repair fund, after which the remaining balance is paid to the owner, as the owner’s return.\r\n\r\nIn some cases, the financing agreements and the hotel management agreement are not implemented at the same time, so the parties need to review the existing contractual framework as regards bank accounts, payments and cashflows and then amend that framework as necessary to reflect how these matters will operate in practice.\r\n\r\nFrom the operator’s perspective, the priority is to ensure that they have control over, and access to, the hotel operating revenues and an ability to carry out their role as hotel manager, which will usually include managing the income and operating costs of the hotel, for the duration of the term of the hotel management agreement. The operator will be less concerned with the owner’s return.\r\n\r\nBy contrast, the owner’s priority will be to ensure that the operator is able to operate the hotel efficiently and that there are no unnecessary hurdles to payment to the owner (or its nominated account) of the owner’s return.\r\n\r\nThe financiers will want to have as much visibility as possible over the hotel operations and cashflow and will often want to see all hotel project accounts held with one of the financiers. The financiers would usually appreciate that the operator needs a high level of autonomy in terms of operating income and expenses and may allow this, provided that they have visibility over operations and control as regards the accounts, other than the accounts required for operating the hotel.\r\n\r\nIn some hotel projects, the direct agreement will provide that there should be a hotel operating budget prepared periodically and agreed between the parties and allowing for matters within the budget to be automatically permitted, whereas deviations require special approval. Whether this is required or advisable will depend on a case by case assessment of the project. Where the budget formulation and approval process is contemplated, the timelines to agree the budget and a fallback position to resolve any disagreement, for example by referring the matter to an expert, are advisable.\r\n\r\nRelated to accounts are the financiers’ right to set off amounts due to them from the owner against credit balances on accounts in the name of the owner. This is relevant because in many cases, certain operating accounts will be held in the name of the owner, but would be under the sole control of the operator. For this reason, some operators require that the “operating” accounts (ie which relate strictly to hotel revenue and expenses and other deductions under the hotel management) are kept outside the security structure and the only obligation on the operator is to pay the owner’s return to such account as is required by the financiers. Alternatively, where the accounts must be held with one of the financiers, the operator may require that the financiers’ right of set off cannot be exercised against the operating accounts. This is because the operator will have committed to running the hotel, including dealing with many third parties, in reliance upon amounts in those accounts and the operator would not want to be left in a position where the funds on which it relied have been unilaterally withdrawn by the financiers.\r\n\r\n<strong>Non disturbance of the operator</strong>\r\n\r\nAs noted above, the stakeholders usually agree that they will all be best served by a well run hotel, operated by the operator with minimal interference from the owner or financiers. The operator is, after all, the best placed stakeholder to make the relevant operational decisions and would usually have been selected based on its track record and experience. In light of this, the operator will seek assurances from the financiers that the operator will be left to run the hotel operations in accordance with the hotel management agreement and, to the extent possible, the hotel management agreement will be respected by the financiers and their representatives, delegates and successors. In the UAE, this latter point requires careful consideration because of the lack of self help enforcement remedies under UAE law. In most cases, the financiers will see the land on which the hotel is based as their core collateral and will take a mortgage over that site. If there were an event of default under the finance agreements and the financiers were to enforce their security, this mortgage would be executed through the relevant execution court, culminating in an auction of the property. Currently, contracts such as hotel management agreements will not automatically follow the land to the ultimate buyer, binding that buyer to comply with their terms. As such, the type of non disturbance clause seen in the UAE may be lighter in this respect than the equivalent clause in some other jurisdictions.\r\n\r\n<strong>Insurance requirements and application of proceeds</strong>\r\n\r\nIn most transactions, the operator will have insurance requirements placed on the owner under the hotel management agreement, sometimes with the operator arranging the necessary insurances at the owner’s cost. Similarly, the financing agreements will include insurance obligations on the owner and also provisions setting out the way in which insurance proceeds are to be applied (such as to replace or repair a damaged asset or in certain circumstances to mandatorily prepay the financing). Any mismatch in these requirements needs to be carefully considered and the documents drafted, or amended if they are already in place, to reflect the commercial agreement between the stakeholders on these matters. Of particular importance are the obligation to apply proceeds paid on total loss of the property itself to reduce the financing amount (on the basis that the main asset has been destroyed) and the ability of the operator to have visibility and comfort as regards application of certain operations related insurance proceeds. For example third party liability insurance should be applied to pay the injured third party and insurance proceeds paid in respect of a damaged lift ought to be applied to repair the lift. There is no ‘one size fits all’ approach to these matters, as they will depend on the insurance policies in question and the provisions of the hotel management agreement and financing agreement. They are, however, important to understand and agree at an early stage in negotiations.\r\n\r\n<strong>Termination</strong>\r\n\r\nAnother area which unites the stakeholders is the desire to agree the manner in which the hotel management agreement may be terminated. The financiers want to have visibility on the occurrence of any potential termination event under the management agreement, usually with a right (but not an obligation) to remedy the underlying breach. This is because, in some cases, the financiers would want to protect the hotel management agreement and the services provided thereunder, even if this is at their cost for a certain period. This would usually be because either the owner is not in a position to remedy the breach, or requires financier assistance to do so and the financiers feel their overall position is best served through continuation of the hotel management agreement. From the operator’s perspective, agreeing to such a termination process is beneficial, in the sense that a breach could be remedied not only by the owner, but (at the financiers’ option) by the financiers as well. The downside from the operator’s perspective is that the financiers’ requirements may extend the timeframe and process to terminate, when compared with the operator’s rights under the hotel management agreement.\r\n\r\nOn the flip side, the financiers would usually agree to notify the operator of the occurrence of an event of default or enforcement event under the financing agreements. This would simply put the operator on notice as regards the owner’s position, allowing the operator to begin contingency planning. This notification would not usually give the operator any new rights, so this is more an information sharing obligation to reflect the good faith of the parties.\r\n\r\n<strong>Concluding remarks </strong>\r\n\r\nAs can be seen from the above, the interplay between operator, owner and financiers can be very varied and depends on the operational arrangements in place in respect of the hotel project in question. The one key theme in hotel financings is that clarity in requirements and expectations of these stakeholders is vital in helping them to quickly and efficiently find contractual solutions to manage the relationship between them, while allowing the hotel to operate smoothly.\r\n\r\nShould you have any queries concerning direct agreements or hotel financings, please feel free to contact the author of this article or any other member of the Banking &amp; Finance team at Al Tamimi &amp; Company.'),
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(98357, 5343, 'content', 'March 2016\r\n\r\n<hr />\r\n\r\nUnusual working arrangements are not as common in the UAE as elsewhere. However, in some sectors, such arrangements are more usual simply because of issues particular to that sector. In the hotel sector, businesses which use the separate owner/operator model have little choice but to utilise secondments for a variety of reasons which will be considered below. This article explores the practical issues surrounding secondments used by hotels in the UAE together with the associated benefits of utilising that approach.\r\n\r\n<strong>Background</strong>\r\n\r\nIn order to work in the UAE, all employees must have a residence visa (with the exception of UAE and other GCC nationals) and a work permit. As a result of UAE immigration laws, an employee may only lawfully work in the UAE for the employer listed on the employee’s visa and work permit and only from the employer’s registered premises. Furthermore, an employee may not lawfully work for more than one employer simultaneously except in very limited circumstances.\r\n\r\nWhere an employee is found to be carrying out work for an organisation other than their employer without the approval of the applicable authorities, fines of up to AED 51,000 (USD 14,000) per employee in breach may be issued by the General Directorate of Residency and Foreigners Affairs up to a maximum of AED 5 million (USD 1.4 million). Such fines may be issued against both the employer and any entity which allows employees who are not sponsored by it to carry out work.\r\n\r\nAs set out above, all employees in the UAE must carry out work for their sponsor and at their sponsor’s registered place of business only. In the hotel industry, this inevitably results in the hotel owner employing all hotel staff, including senior management, as it is the hotel owner that holds the hotel licence and provides the licensed place of business at which the staff will be employed. This arrangement creates a scenario where the legal responsibility for the staff remains with the owner, whilst the selection, hiring, management and direction of the staff is undertaken by the hotel operator – although, practically, through the hotel executive personnel such as the general manager, head of HR, etc.  These executives will also be employees of the owner. As a result, the issue of liability for the conduct of the hotel staff, including the executive personnel, can become blurred, and may, in the event of breach of the operator’s obligations to the owner under the hotel management agreement (“HMA”), create an obstacle to successfully proving breach by the operator, where the event giving rise to the breach has been undertaken by a member of the hotel staff. To address this, secondment of executive staff is commonly used to provide for the continued employment of hotel executive personnel (general manager, financial controller and, in some cases, department heads) by the hotel operator, with a secondment to the hotel owner for the purposes of sponsorship and visa only.\r\n\r\n<strong>Secondments in practice</strong>\r\n\r\nIn recognition of the fact that some roles or business dynamics require a degree of flexibility in relation to working arrangements, it is possible in some circumstances for employees to obtain consent to carry out work for another employer or from another location than set out in the employee’s residence visa and work permit.\r\n\r\nMore usually, a secondment will be used for commercial considerations (as identified above) or because the ultimate employer (in this case, the operator) does not have a presence in the UAE or is otherwise unable to obtain residence visas or work permits for employees. Where this is the case, the owner will sponsor the employee but an employment relationship will remain in place between the employee and the operator.\r\n\r\n<strong>Documenting arrangements</strong>\r\n\r\nWhere key employees are concerned, it is very common for the employees to continue to be employed directly by the operator (often via its parent company abroad) whilst also entering into a direct employment relationship with the owner (which will ultimately be responsible for obtaining a residence visa for the employee) which naturally results in a number of issues. Perhaps the most important consideration for all parties is whether the employment with the operator will continue throughout any secondment arrangement. In most cases, employment will continue not least to ensure that the owner is best placed to prove any breach of contract by the operator. This potentially results in the employee being able to assert employment rights against both the owner and the operator. One possible way to resolve this difficulty is to suspend the employment terms with the operator whilst employment with the owner is ongoing.\r\n\r\nOnce a decision has been made in relation to employment of key staff with the operator, the primary concern between the parties would generally be how to document the arrangement, with the most commonly used arrangement being:\r\n\r\n1.  HMA\r\n\r\nThis would generally set out the commercial arrangements between the parties. Ideally, the owner would negotiate the terms of the HMA such that the operator retains responsibility for a number of specific key personnel. On occasion, and again depending on the negotiations between the parties, the HMA may contain a right of veto in favour of the owner which enables the owner to have some involvement in the identity of key personnel.\r\n\r\n2.  Employment contract between the operator and the employee\r\n\r\nIn order to preserve the relationship between the operator and employee during the secondment, and assuming that the parties would like this to be the case, the employee would ordinarily remain employed by the operator.\r\n\r\n3. Secondment agreement between the owner and operator\r\n\r\nIdeally, the agreement would detail, amongst other things, the mechanism for the secondment and management of the employees by the owner. This would include any amounts payable to the employee, responsibility for disciplinary matters, which party can approve leave etc. The most common approach would be for the operator to retain control of the employee with the owner effectively acting as the operator’s proxy, carrying out instructions issued by the operator (where necessary). In some cases, the parties do not enter into such an agreement.\r\n\r\n4.   Agreement or letter between the operator and the employee\r\n\r\nWhere a secondment arrangement will be in place, the operator would generally communicate the proposed secondment to the employee in writing. The document would set out that the employment relationship between the parties will continue (if that is intended to be the case) and would identify which provisions of the employment contract will continue during the secondment and which would not. The agreement would also provide details and conditions in respect of the employment. By way of example, the agreement would identify the proposed country and location of work, reporting lines and other matters which are likely to change during the secondment period.\r\n\r\n5.  Employment contract between the owner and the employee\r\n\r\nBroadly, in order to obtain a residence visa and work permit for an individual in the UAE, it is necessary to file a standard form contract with the relevant free zone authority or the Ministry of Labour (with some exceptions). Certain hotels are exempt from the remit of the Ministry of Labour and therefore a standard employment contract is not a pre-condition of the visa process for those exempted entities. However, it would be usual for individuals to be provided with an employment contract from the owner. Despite that, the contractual documentation between the owner and the employee will generally be kept to a minimum in order to avoid repeating the content of the contract between the operator and employee or, potentially, creating conflict between those terms.\r\n\r\n<strong>Considerations</strong>\r\n\r\nThere are many considerations for all parties involved in a secondment arrangement and most will be particular to the circumstances. However, there are a number of points which should be considered throughout the process in all cases and particularly whilst drafting the required documents. Examples of points to consider are set out below:\r\n<ul>\r\n 	<li>How long will the secondment arrangement be in effect?</li>\r\n 	<li>Which party will be responsible for the employee, both day to day and in respect of material matters?</li>\r\n 	<li>Can any of the parties bring the arrangement to an immediate end and, if so, how will doing so impact upon the overarching employment relationship?</li>\r\n 	<li>What arrangements will be put into place during the secondment to ensure that the parties communicate effectively? Will there be regular updates issued by the owner?</li>\r\n</ul>\r\nThe considerations set out above are of particular importance in respect of key employees who may well have worked with an operator for many years and who intend to remain employees of the operator for the foreseeable future.\r\n\r\nMoreover, in addition to the pure employment considerations which all parties should be mindful of, it is of particular importance for the owner to consider the question of liability in the event of any major difficulties arising from the HMA. In the event of a breach of the terms of the HMA by the operator, the owner may well be in a stronger position to successfully prove the operator’s breach, if the owner has ensured a direct link between the operator and the hotel key personnel, by utilising a well structured secondment arrangement.'),
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(98374, 5344, 'content', 'March 2016\r\n\r\n<hr />\r\n\r\nA dream renovation could turn to disaster very easily for any Developer or Contractor. Careful thought and drafting is needed to avoid being caught by common pitfalls.\r\n\r\n<strong>Scenario 1 </strong>\r\n\r\nA luxury hotel wants to have the foyer and restaurant areas refurbished during its off season.  These areas include a shopping arcade which is part of the complex but adjacent to the actual hotel.  Work is delayed and falls well behind the programme.  The Developer is faced with the prospect of the work having to be done over the peak tourist season which may affect hotel bookings and shop turnover.  The Contractor is engaged under a construct only FIDIC Red Book 1999.\r\n\r\nIf work is delayed from the off season to the peak season the hotel operator will claim against the Developer as will the lessees of the shops, which could be very expensive.  If the construction contract is based on FIDIC and is not amended the Developer could not accelerate the Contractor’s work to avoid work in peak season or manage this issue by suspending certain work at certain times (noisy or dusty work).\r\n\r\nThe construction contract should also ensure that any protocol for work to be a carried out which has been agreed with the operator is imposed on the contractor and that the Contractor does not cause the Developer to breach any lease.  It may also be the case that agreements for cooling or other services will be impacted and need to be managed under the construction contract. Importantly the agreed damages for late completion should reflect the potential claims or exclude from the rate claims from tenants and the operator.\r\n\r\n<strong>Scenario 2 </strong>\r\n\r\nA Contractor is working on a hotel redevelopment.  The hotel is operating and there are separate specialised contractors who are doing the entry areas.  The foyer art work will be completed earier than the entire project as the hotel is to partly open.  The foyer art is fragile and may be damaged by too much vibration.  During construction the specialised contractors cause delays due to unloading materials and taking longer than scheduled to complete their work.  The contract as in scenario 1 is engaged under a construct only FIDIC Red Book 1999.\r\n\r\nThe Contractor should look to have amendments to the contract to ensure that it is not responsible for the other contractors working on a shared site and that if the other contractors cause delay then it is not the Contractor’s responsibility. The Contractor should also ensure that it is clear that it will get additional costs it incurs should this happen.  It is preferable if there is an agreed protocol for who controls the loading docks and what access and egress is given as well as clarifying who is responsible for safety on shared areas.    The limitation of liability clause will need careful review and the Contractor should make sure that any particular conditions do not delete the ‘no liability for consequential loss’ provision, which may expose the Contractor to significant loss should the Contractor disrupt the hotel’s business.\r\n\r\nAs a Developer you would want to ensure that the Contractor is liable for, and is to coordinate work so as to not cause, damage the artwork. The contract will need to manage the early completion of part of the work and the monitoring of vibrations while work continues. Maybe there should be clear rules to protect hotel guests and to not disturb functions, venues and guests sleeping.\r\n\r\nWhile these scenarios are brief, these types of scenarios are almost always encountered in any hotel renovation project.  The scenarios highlight dangers for both the Developer and the Contractor.\r\n\r\nDevelopers should:\r\n<ul>\r\n 	<li>Ensure the contract makes provision for the interaction between the ongoing hotel and retail operations and the works, particularly where there is work which will cause noise or dust;</li>\r\n 	<li>Select a Contractor who is familiar with operating in a Brownfield (as against a Greenfield) environment, and preferably with experience with hotels and their requirements;</li>\r\n 	<li>Check the program to have a sequence that minimises the impact on the hotel operational areas;</li>\r\n 	<li>Allow for the ability to have no work times, either due to peak seasons or to times of day, and agree the effects that may have on the contract price, if any;</li>\r\n 	<li>Make sure that the terms of the hotel management agreement are not broken or that any redevelopment agreement reached with the hotel operator is reflected in the risks passed through to the Contractor;</li>\r\n 	<li>Have measurable means to assess if noise or vibration is excessive through the installation of meters or requiring the Contractor to install and monitor such meters;</li>\r\n 	<li>Manage the protection of existing structures and infrastructure and ensure that any agreed work methods are included or observed, particularly where there are any sensitive areas.</li>\r\n</ul>\r\nContractors should:\r\n<ul>\r\n 	<li>Ensure that they have an agreed means of access and egress as well as places for the storage of materials;</li>\r\n 	<li>Become familiar with the hotel management team to work out when work can be done and when it cannot be done;</li>\r\n 	<li>Set out in the contract the agreed terms for when the Contractor is entitled to claim for additional costs due to disruption or delay to accommodate the hotel operations;</li>\r\n 	<li>Ensure their insurance  cover is adequate for the risks of working in this operating environment;</li>\r\n 	<li>Limit their liability generally and seek to remove liability for consequential loss as claims by third parties (such as the hotel operator or tenants) may be significant</li>\r\n</ul>\r\nAll hotel renovation or addition projects will contain unique risks.  These risks should be considered and the agreement on how they are to be managed should be properly documented in the construction contract.  It is simply too risky to your business as a Developer or a Contractor to use a standard form and ignore these risks.'),
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(98342, 5342, 'content', 'March 2016\r\n\r\n<hr />\r\n\r\nIn this region, one of the bigger revenue generators for hotel operators is the bar or club. In the competitive entertainment industry, bars and clubs are increasingly hiring musical acts – singers, bands and DJs – to generate interest and gain an audience. But many hotel venues are doing this on an ad hoc basis, using emails and calls to confirm and not having a set of standard terms that they present to entertainers that are performing in the venue. As with every aspect of your business, having and using a standard form contract for venue entertainment ensures that everyone understands the business side of the deal. There are no unexpected surprises for either party.\r\n\r\nThe basics are easy – the performer will perform on a certain date, at a certain time, for an agreed upon length of time, possibly alongside another act, and some money will be paid. Here are some other key terms that you might consider for inclusion in an entertainers’ contract\r\n\r\n<strong>Cancellation by the venue</strong>\r\n\r\nCancellation terms can vary enormously from venue to venue - they depend on issues such as lead times for marketing or cancellation terms agreed with other suppliers (such as a company that might be supplying the sound system). Any venue will usually have a set cancellation time and this should not vary from act to act. Performers are used to seeing a sliding scale for cancellation – in other words, the venue won’t have to pay them if it cancels the event before a certain date (say, 28 days before the event) but after that it will have to pay a certain percentage, generally sliding up to 100% for a cancellation that takes place very close to the date of the event. Venues can expect some negotiation on this point from ‘name’ performers – some will expect to be paid 100% anytime within, say, 60 days of the event. Many performers will not be willing to commit to an event if they are not offered such terms – if the venue cancels the event, they will not be able to replace that lost revenue readily and so they expect to be compensated.\r\n\r\n<strong>Cancellation by the performer</strong>\r\n\r\nObviously, a venue will not wish to pay a percentage of the fee to a performer that cancels their performance. Indeed, performers should only be able to cancel in limited circumstances - on evidence of illness for example. It is simply not possible to run a venue when it is possible that a performer that might not turn up.\r\n\r\n<strong>Standards for the performance</strong>\r\n\r\nThe UAE has strict rules about the content of performances and the performer must be made aware of those. This can readily be done contractually. For example if the performer includes any action, word or material in the performance that is, for example, lewd in nature or refers to drugs or drunkenness then the venue might have a contractual right to retain a percentage of the fee. Similarly noise levels can be set contractually – but ensure that it is clear to all parties where the noise measurement will be taken. Noise levels are significantly different at the front door than they are next to the speakers.\r\n\r\n<strong>Fees </strong>\r\n\r\nDeals vary from venue to venue but many venues in this region operate with a revenue share deal. This may mean that the performer takes the door money and perhaps a share of the bar takings once a certain minimum is reached. These terms need to be extremely clear to all parties – money is the root of most arguments and if the performer does not understand the terms, then you can expect that argument to begin.\r\n\r\nName performers will usually require a flat fee to appear and may also demand a percentage of their performance fee up front, before they perform. Very well known acts will often demand the whole fee before they perform.\r\n\r\nIf there is a revenue share deal, then the venue must be clear in setting contractual controls about the venue’s maximum capacity. It is very tempting for a performer to take in an extra 25 people if they are getting the money from each person. A fine however, if levied by the authorities, will be addressed to the venue. In that regard, the agreement can require that fines be repaid if they are caused by the actions of the performer – whether for overcrowding or excessive noise or for conduct whilst on stage.\r\n\r\n<strong>Extras</strong>\r\n\r\nPerformers will assume that certain things will be provided by the venue at no cost – water, parking, electricity. Some performers expect a little more – soft cotton towels, champagne, M&amp;Ms with the blue ones removed. Generally however these long and detailed riders will only be requested by name performers. For standard performers, it is important to be clear about what will be supplied. This extends to sound and lighting equipment as well as extras. The venue may already contain sound and lighting equipment but some performers might augment that equipment with their own gear. The agreement should be clear about who is supplying which part and, importantly, who is responsible for looking after each part. Performers using the venues equipment may wish to know who will be operating it. The performer will want to know that the operator is professional and properly trained as neither the performer nor the audience will tolerate incompetence in sound or lighting at any event.\r\n\r\nPromotional tickets and the management of the guest list can regularly lead to disagreement – usually antagonizing the party that is getting the ticket money. If your venue capacity is not large, then a guest list with 50 ‘friends’ is going to take away from your potential revenue. Similarly, if the performer is taking the ticket money, they may be upset if the venue provides 20 free passes to a local radio station.\r\n\r\n<strong>Force Majeure</strong>\r\n\r\nIn most regions, this clause has limited application to the live performance industry but in this region it can be extremely important. Public mourning periods are always unexpected and, without a clear force majeure clause (and perhaps an appropriate insurance policy as well) a venue can be liable for a large percentage of the performers fees if they have to cancel an event at the last minute. Outdoor venues are more susceptible – there may be issues with weather and again, this should be properly covered under a force majeure clause.\r\n\r\n<strong>Marketing</strong>\r\n\r\nThis vital part of event planning needs to be clearly allocated to the relevant party well before the event takes place. The venue should expect the performer to, at the very least, promote the event to their Facebook page, Twitter following and email database. However, the performer may expect the venue to provide more traditional media advertising such as radio spots and magazine listings. A poorly attended event usually leads to fingers being pointed in relation to poor (or poorly targeted) marketing. Addressing this in the agreement will avoid such a situation.\r\n\r\nLarger events may benefit from the inclusion of a specific capped amount that the venue will spend in advertising. The performer does need to know that there is not an endless marketing budget but will also be more comfortable knowing that there is at least some budget allocation for this important item.\r\n\r\n<strong>Non compete</strong>\r\n\r\nSome venues want to retain a performer for longer than one night – they may seek to create a regular event around that performer. If this is the case then the venue must consider a clause that prohibits the performer from taking that same performance or event name and putting it on elsewhere. If you do this, the performer can reasonably ask for a commitment to the event – 6 months perhaps. This is also a case where the marketing must be clearly set out so that the venue, the performer and the event all get the best opportunity to be successful.\r\n\r\n<strong>Merchandise </strong>\r\n\r\nLive performers often want to sell merchandise (such as t-shirts and CDs) at their events. It provides them with extra income and promotion. Venues do sometimes take a small commission on these sales, although this is rare in this region. It is important that the agreement is clear about the location and size of the merchandising stand as well as indicating who is responsible for staffing the stand and securing the goods that are displayed on the stand.\r\n\r\nRecording the performance.\r\n\r\nSome performers will want to be able to record the performance at the event and this should clearly be at their cost and risk. If the venue wishes to create images of the performance for promotion of the venue, it will need the specific permission of the performer within the agreement. It is likely that the performer will want to restrict the way that the venue uses the images – perhaps only for the promotion of the venue and maybe for a limited number of months. If the venue is creating live footage of a performance, it needs to address the complex issue of underlying music rights that will arise when it records and subsequently uses that footage.\r\n\r\n<strong>Conclusion</strong>\r\n\r\nIt is possible that an exchange of emails will suffice when a venue takes on a performer but this is not always prudent. Experience has shown that a simple pro-forma contract will stop miscommunication, avoid heated arguments after the event and ensure that the public does not view the event, however large or small, as having been poorly executed. It is a reliable way to ensure that events in hotel venues operate smoothly and, more importantly, return a profit.'),
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(98319, 5341, 'content', 'March 2016\r\n\r\n<hr />\r\n\r\nIn order to ensure that whatever is provided in the HMA as a ground for unilateral termination by the Owner is enforceable under UAE law, thorough consideration should be given at the outset of negotiations of the HMA.\r\n\r\nThis article examines the options available to an Owner to terminate the HMA prematurely, where the HMA is governed by UAE law.\r\n\r\n<strong>Unilateral termination in the event of Operator breach </strong>\r\n\r\nOnce the Owner signs the HMA with the Operator it should take into account that, generally, proving an Operator’s breach of its contractual obligations will in practice be extremely difficult. One of the main reasons for this is due to the fact that the Operator’s management and operation of the hotel is undertaken through the Hotel personnel who, in the UAE, are employees of the Owner. Therefore, omissions on the part of Hotel staff, from a legal perspective, may be held as omissions of the Owner’s employees and not the Operator (unless it can be proven that the Operator was aware of such omissions and didn’t prevent them when it had the possibility to do so). This scenario may be altered in favour of an Owner should the Owner and Operator agree that the key personnel of the Hotel (i.e. the general manager, financial controller, head of marketing etc.) will be employed by the Operator and seconded to the Owner. This may, in certain circumstances, assist the Owner’s proof of a breach by the Operator’s (rather than the Owner’s) staff under the HMA. Therefore, it is preferable for an Owner to require such arrangements at the outset of negotiation of the HMA.\r\n\r\nAssuming that the Operator’s breach of the HMA can be proven by the Owner, the Owner can terminate the HMA in compliance with the UAE Civil Code by way of the parties’ mutual consent, by operation of law and by way of a court order. In order to avoid lengthy litigation/arbitration proceedings to secure a court order, the Owner may wish to rely on Article 271 of UAE Civil Code, which provides for a special method of termination:\r\n\r\n“It shall be permissible to agree that a contract shall be regarded as being cancelled spontaneously [automatically] without the need for a judicial order upon non-performance of the obligations arising thereout, and such agreement shall not dispense with notice unless the contracting parties have expressly agreed that it should be dispensed with.”\r\n\r\nThis Article permits that the wording of a termination clause in the HMA can prevail over (i) the need for a court order and (ii) the need for notice to be given to terminate. The position of the Dubai courts in previous rulings has confirmed that where the parties have expressly agreed in the contract to vest either party with a right to terminate the contract upon the breach of the other party, such provision is enforceable provided that the contract clearly states that such right can be exercised without the need for a court order (e.g. Court of Cassation judgment No. 266/2005). The Owner will however need to ensure at the outset of negotiation of the HMA that supporting language to this effect is included in the HMA.\r\n\r\nOn the other hand, the Owner should be mindful that there should be enough evidence of the Operator’s breach to substantiate the termination. Otherwise, if the Operator disputes the termination of the HMA by the Owner in court or arbitration and succeeds in showing that the termination was wrongful, the Operator will be entitled to claim damages from the Owner for breach of contract.\r\n\r\n<strong>Unilateral termination for convenience (no default on the part of the Operator)</strong>\r\n\r\nAs was mentioned above, the general rule under the UAE Civil Code provides that if there is no mutual consent between the parties to terminate a contract, neither party can unilaterally terminate it in the absence of a default allowing such termination.\r\n\r\nBut does UAE law allow the parties to agree that one party can terminate unilaterally for convenience (i.e. that the Owner can terminate even if there is no default on the part of the Operator)?\r\n\r\nYes, if the parties have agreed in the HMA that it can be unilaterally terminated (in the absence of either party’s default) by the Owner without the need for a court order, this will be upheld pursuant to the UAE Civil Code (Article 218) and court practice. However, an Operator will usually not agree to grant an Owner such a right in the HMA without a term that compensation (liquidated damages) be paid by the Owner to the Operator in the event such right is exercised. The Operator would require that the amount of such compensation be included in the HMA.\r\n\r\nWith respect to the amount of any such compensation, the right of the parties to agree in advance is generally provided for in Article 390 of the UAE Civil Code. The UAE courts have traditionally been of the opinion that liquidated damages cannot be awarded upon termination of a contract due to the fact that the agreement on liquidated damages within the contract is an ancillary (supporting) obligation, and therefore, does not exist in isolation of the primary obligation. As a result, until recently UAE courts have consistently applied the rule that where the primary obligation is terminated, the liquidated damages clause shall be disregarded as well. However, this position was recently changed by a ruling of Abu Dhabi Court of Cassation (Commercial Appeal No. 790-2013, dated 22. October 2014):\r\n\r\n“A penalty clause, being liquidated damages, is ancillary to a principal obligation. When the principal obligation is extinguished by the termination of the contract, the ancillary obligation is likewise extinguished and deprived of its effect. Thus, any tenable action for termination cannot be brought in contract and must be brought in tort in accordance with the general rules given that the penalty clause relates to the obligations imposed in contract upon its parties and calls for a penalty in the event of breach while the contract is still in force. <strong><em>However, if the penalty clause is independent and unrelated to any of the obligations, the extinguishment of the contract would have no effect on the existence of the penalty clause insofar as it gives rise to a separate agreement between the parties, notwithstanding its inclusion in the contract itself.”</em></strong>\r\n\r\nHowever, there is no such case law yet established in other Emirates, which means that should the Operator challenge the validity of the provision in the HMA on the pre-agreed amount of liquidated damages, there is a potential risk that the court (of an Emirate other than Abu Dhabi) or arbitral tribunal may interpret the nature of the liquidated damages differently, i.e. by considering that the liquidated damages clause has been terminated simultaneously with the termination of the HMA. Should this be the case, the court would then be entitled to assess the damages in accordance with the general rules for damage assessment, and not the pre-agreed amount of liquidated damages. In this case, both parties bear the risk of such assessment being unpredictable. However, the good news for an Owner is that in this case, the burden of proof with respect to the amount of incurred damages would be on the Operator.\r\n\r\nThe parties should also appreciate that the amount of compensation (liquidated damages), despite being specified in the HMA, may be varied by the court even if it finds that it survives the termination of the main agreement. On the application of either party the court has the discretion under Article 390(2) of the UAE Civil Code to vary the agreement as to the amount of compensation to be awarded, so as to make the compensation equal to the loss and any agreement of the parties to the contrary in the HMA in such circumstances, would be null and void. This practically means that either party could claim for an increase or decrease of the pre-agreed amount of compensation, however, the party bringing such a claim will have the burden of proof in court to override the pre-agreed amount of liquidated damages under the HMA.\r\n\r\nTherefore, should an Owner wish to negotiate termination for convenience in the HMA, the Owner should be mindful that Operators are usually reluctant to agree and so it should be raised at the outset of negotiations. Such a right to terminate is particularly important for an Owner where the nature of the performance test in the HMA will severely restrict the Owner’s other rights of termination.\r\n\r\n<strong>Unilateral termination in case of failure of performance test </strong>\r\n\r\nA common contractual ground for termination by the Owner is where the Operator fails the performance test.  For the majority of HMAs, the ability to terminate for failure of the performance test will effectively be the only way for an Owner to terminate the HMA without risk of payment of liquidated damages to the Operator. Therefore, the importance of the structuring of the performance test cannot be overestimated.\r\n\r\nHowever, the mere existence of a performance test in the HMA is not a guarantee of protection for the Owner, and so the negotiation of a fair, effective and representative performance test in the HMA should be a key issue for an Owner at the outset of negotiation of the HMA. There are numerous options for structuring a performance test, and these will to a large extent depend on various circumstances and scenarios of the project and both the Owner’s and the Operator’s positions in negotiation. Where an effective performance test is not possible, then an Owner may wish to focus on a right of unilateral termination for convenience instead, with payment of compensation to the Operator.\r\n\r\n<strong>Conclusion </strong>\r\n\r\nWhilst the Owner will hope never to have to terminate the Operator before the end of the contract term, it is important that the Owner negotiates contractual rights of termination to ensure that the Owner has the right to efficiently replace the Operator. It is essential that proper wording is used and that specialist legal advice is sought prior to the HMA being signed.'),
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(98300, 5340, 'content', 'March 2016\r\n\r\n<hr />\r\n\r\nFrom a potential buyer’s perspective, any slowdown of the market in general, and for the hospitality market in particular, presents a positive opportunity.\r\n\r\nBy way of example, the last 18 months have seen a particularly active time in Dubai for hotel acquisitions. The hotel industry particularly within the Emirate has matured, stabilised and become internationally established. For any investor considering a hotel purchase, this article sets out the recommended steps to be taken (and risks to avoid) from a legal perspective.\r\n\r\n<strong>Legal Due Diligence</strong>\r\n\r\nShould an investor underestimate the importance of legal due diligence, focussing only on financial analysis, the repercussions may be grave.\r\n\r\nThe scope of the legal due diligence is important, in order to reveal not only existing and potential legal risks, but also any risks related to:\r\n<ul>\r\n 	<li>seller’s title to the Hotel and underlying land, history of previous ownership and transfers, existing encumbrances and third party rights (including mortgages), compliance with master developer rules and regulations (including full payment of purchase price and community services charges), permitted zoning/use and any other restrictions or information that may impact the intended development of the land;</li>\r\n 	<li>the selling (and any holding) company’s corporate and trading history, history of previous share transfers, shareholders, existing encumbrances over shares and confirmation on the company’s current good standing, existing or threatened litigation or disputes;</li>\r\n 	<li>history of labour relations with hotel staff including compliance with labour contracts during employment and dismissal of Hotel employees, and compliance with employment laws, including trade union requirements if applicable,</li>\r\n 	<li>history of contractual relations with the hotel operator (if any), other third parties, and lenders (including the status of loan repayments under an existing mortgage, if any), to verify the status of any outstanding payments and other types of contractual breach that may lead to liability, and</li>\r\n 	<li>history of compliance of the hotel’s operation with local laws, including licensing requirements, environmental laws, health and safety, sanitary requirements etc.</li>\r\n</ul>\r\nIt is important to ensure that the investor is clear on his potential exposure due to any risks, (and in this respect, the effect of any statute of limitations under local law on historical issues), the extent of which will depend on the structure of the deal (either share transfer or asset transfer).\r\n\r\nWhere any risks are revealed in the course of legal due diligence, the investor, together with the seller, if possible, should assess whether such risks can be mitigated or eliminated by the seller prior to closure of the transaction. If the latter is possible, such actions should constitute conditions precedent to closing. Alternatively, the investor should consider the seller providing an indemnity (and the seller’s financial strength should the indemnity be called upon), against any claims, damage, loss, cost or expense that may be incurred by the investor in the future, if same relates to the period of time preceding closure of the transaction. In certain cases, however, the revealed risks may be incurable and so significant that they would need to be reflected in the acquisition price, or may prevent the transaction from proceeding.\r\n\r\n<strong>Analysis of the Hotel Management Agreement </strong>\r\n\r\nAs part of the legal due diligence it is highly important for an investor to assess the hotel owner’s rights and obligations pursuant to the hotel management agreement (“HMA”) under which the Hotel is managed by an operator (“Operator”), since in the vast majority of cases the investor is obliged to assume all the current owner’s rights and obligations under the HMA as an incoming hotel owner. Therefore, the investor should analyse whether the HMA provides for at least basic protections to the owner, for example annual budget approval rights; supervision of expenditure of funds and obligations to provide additional working capital; monthly and annual reporting by the Operator; owner’s control/approval rights over capital expenditure and spending of funds from the FF&amp;E Reserve; and the possibility to trigger the performance test or terminate the HMA without cause.\r\n\r\nIn case the HMA does not provide for such protections, the investor should thoroughly consider whether the transaction should be consummated, since in most cases, the existence of the HMA will prevent the investor from acquiring the hotel with vacant possession and, thus, should either take the Hotel with all obligations and commitments of the owner to the Operator, or leave the deal if he is unable to get comfortable with these.\r\n\r\n<strong>Obtaining the Operator’s approval</strong>\r\n\r\nThe procedure for a hotel sale is heavily regulated in most HMAs. As such, the Operator usually has a right of first refusal with respect to any sale of the hotel, which right should be strictly respected by the seller and the investor, to prevent any breach of the HMA and the threat of litigation or arbitration in the future. Unless there are no restrictions regarding sale of the hotel in the HMA, then usually, the seller should disclose to the Operator the investor’s offer and the identity of the investor before any binding sale and purchase agreement is signed between the parties.\r\n\r\nUnder most HMAs, the Operator usually has a particular timeframe to either exercise its right of first refusal or alternatively approve the investor and assignment of the HMA thereto. In this respect, it is important to analyse whether the HMA provides for a clear approval procedure and criteria allowing the Operator to reject and prevent a sale. If there is no such mechanism, the buyer should assume the associated risks since if the Operator is entitled to reject the investor for no objective reason predetermined in the HMA, the investor’s time and money invested into all preparatory arrangements up to that point (including broker’s, appraisal, legal, consultancy and accountant’s fees for legal and financial due diligence etc) may be wasted.\r\n\r\n<strong>Termination of HMA on sale </strong>\r\n\r\nIf the HMA provides for the possibility for the seller to terminate the HMA on sale by paying the Operator an amount of liquidated damages, the investor should carefully consider whether or not it wishes to require such vacant possession and if it does, which party will ultimately pay the liquidated damages amount (or in which proportion will it be shared by the investor and the seller). The investor may wish to terminate the HMA and obtain vacant possession for several reasons - for hotel performance issues, or due to a requirement for a strategic change in the hotel’s positioning (e.g. change of segment from midscale to upscale or vice versa, if feasibility studies have demonstrated that a different brand or operator may be preferable than in existence), or where the investor has a strategic relationship with another operator.\r\n\r\nThe investor should, however, keep in mind that payment of liquidated damages to the Operator would not be the only price for termination of the HMA, since all OS&amp;E and FF&amp;E, which associate the hotel with such brand and/Operator, will have to be removed from the hotel, together with a change of branding, and potential refurbishment/renovation of the Hotel to comply with the new operator’s brand standards.\r\n\r\nIf the investor decides to require vacant possession, payment of liquidated damages and termination of the HMA should be a condition precedent to closing the hotel acquisition to ensure that the Operator will not have any claims against the investor in respect of the period of time preceding the closing of the transaction.\r\n\r\n<strong>Transaction structuring </strong>\r\n\r\nThere are various options for structuring the acquisition of a hotel, the most common of which are:\r\n<ul>\r\n 	<li>asset deal, i.e. by way of acquisition of the hotel building and underlying land by way of a real estate purchase;</li>\r\n 	<li>share deal, i.e. by way of acquisition of the shares of the company (or parent company), which owns (or otherwise has occupational rights to) the hotel and the underlying land;</li>\r\n 	<li>a combination of the above, i.e. incorporation of a newly established company (special purpose vehicle), to which the seller transfers the hotel building and land, and then sells the shares in such newly established company to the investor.</li>\r\n</ul>\r\nEach option of structuring has it own advantages and disadvantages, and must be considered on a case by case basis. In case of a share acquisition, the investor is exposed to the risks related to the selling company’s corporate history and previous trading activity (including previous credit history etc) and liabilities. However at the same time, a share acquisition may be more efficient, since all personnel, permits and licenses necessary for the hotel operation, contractual arrangements with suppliers, etc are already in place in the target company’s name and no additional actions or formalities are generally required by the investor (unless there is a change of control provision in any contract, which entitles the other party to terminate the agreement with the seller).\r\n\r\nVice versa, if the Hotel is sold by way of an asset acquisition, the investor is, on the one hand protected in terms of historical risks and liabilities of the seller’s business activity and trading history, but on the other hand, all personnel, licenses and permits, and third party contracts will need to be assigned or re-executed in the name of the investor.\r\n\r\nConsidering the pros and cons of each option, based on the information obtained through the legal due diligence process, the investor’s legal advisors should advise whether it is preferable to proceed with a share or asset transaction or a combination of both through incorporation of a new company to accommodate the transaction, and which particular conditions precedent/subsequent, if any, should be provided for in the sales documentation to ensure the maximum protection of the investor.\r\n\r\n<strong>Acquisition of a distressed asset </strong>\r\n\r\nWhere the investor is considering the purchase of a distressed asset, which involves liability and outstanding payments owed to the Operator, then the investor should undertake legal and financial due diligence with respect to the existence of any breach of the following owner’s obligations under the HMA:\r\n<ul>\r\n 	<li>provision of additional working capital upon the Operator’s request (where the revenue generated by the Hotel is insufficient to cover the operating and /or non-operating expenses of the Hotel);</li>\r\n 	<li>payment of Operator’s fees and other charges due to the Operator under the HMA and ancillary hotel agreements;</li>\r\n 	<li>payment of FF&amp;E reserve contributions;</li>\r\n 	<li>non-interference with the management of the Hotel by the Operator;</li>\r\n 	<li>undertaking capital works to the hotel as required pursuant to the annual budget or upon the Operator’s request (as may be stipulated in the HMA);</li>\r\n 	<li>payment of property insurance premiums etc.</li>\r\n</ul>\r\nIn order to reveal all owner defaults under the HMA, the investor should engage the Operator and, additionally, a mediator specialized in hospitality industry and hotel operation matters, in order to agree on an action plan for settlement of existing claims by the Operator, and remedy of owner’s defaults.\r\n\r\nSuch an action plan, once developed and approved by the investor and the Operator, should be signed between the two simultaneously with signing the sale and purchase agreement with respect to the Hotel. Otherwise, if such homework is not undertaken by the investor prior to the Hotel acquisition, the investor will be exposed to the risk of the Operator’s historic claims against the previous owner and possible termination of the HMA in addition. This is due to the fact that assignment of the HMA requires that the investor assumes all rights and obligations and liability of the Hotel owner under the HMA. Furthermore, the HMA will usually provide that a party’s failure to complain of any breach or default committed by the other party, irrespective of how long such failure continues, does not constitute a waiver of the non-defaulting party to seek remedies available to it under the HMA and applicable law. This means that the Operator would be entitled to pursue claims against the investor (as the new owner) with respect to events of default that occurred prior to its acquisition of the Hotel. In this respect, any limitation period should be taken into account, the length of which will depend upon the law chosen by the parties to govern the HMA.\r\n\r\nIn view of the above exposure, it is highly important for an investor to be aware of all historical events of default and potential claims against the existing owner, and to settle the issues with the Operator, with the assistance of a hospitality mediator if appropriate, prior to signing the sale and purchase agreement with the seller.'),
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(98283, 5339, 'content', 'March 2016\r\n\r\n<hr />\r\n\r\nIn this article, we will compare both concepts under the lens of Dubai law to highlight the differences, and provide the reader with a better understanding in regard to the licensing and other regulatory requirements for each concept.\r\n\r\nDecree No. 41 of 2013 ‘Regulating the Activity of Leasing out Holiday Homes in the Emirate of Dubai’ provides a definition for the term ‘holiday homes’. Holiday homes are furnished real property units leased out by a licence holder regularly and on an ongoing basis for the purpose of further subletting them to guests. These guests are natural persons who intend on using the holiday homes for overnight accommodation.\r\n\r\nHotel apartments are also furnished real property units. However, and unlike holiday homes, hotel apartments are located within a hotel facility and as such they benefit from hotel-like amenities (e.g. bar, spa, gym, etc.). Such hotel apartments may be leased for relatively longer periods in return for a monthly or annual rent.\r\n\r\nBelow is a comparison table highlighting the major licensing and regulatory requirements governing each concept.\r\n<table class=\"MsoTableGrid\" border=\"1\" cellspacing=\"0\" cellpadding=\"0\">\r\n<tbody>\r\n<tr>\r\n<td valign=\"top\" width=\"100\"></td>\r\n<td valign=\"top\" width=\"243\"><address class=\"MsoNormal\"><strong>Holiday Homes</strong></address></td>\r\n<td valign=\"top\" width=\"120\"><address class=\"MsoNormal\"><strong>Hotel Apartments</strong></address></td>\r\n</tr>\r\n<tr>\r\n<td valign=\"top\" width=\"100\"><address class=\"MsoNormal\"><strong>Main regulation </strong></address></td>\r\n<td valign=\"top\" width=\"243\"><address class=\"MsoNormal\">Decree No. 41 of 2013 ‘Regulating the Activity of Leasing out Holiday Homes in the Emirate of Dubai’.</address>&nbsp;</td>\r\n<td valign=\"top\" width=\"120\"><address class=\"MsoNormal\">By-law No. 1 of 1998 ‘Concerning Licensing and Classification of Hotels, Guest Houses and Furnished Apartments’.</address></td>\r\n</tr>\r\n<tr>\r\n<td valign=\"top\" width=\"100\"><address class=\"MsoNormal\"><strong>Main licensing and regulatory bodies </strong></address></td>\r\n<td valign=\"top\" width=\"243\">\r\n<ul>\r\n 	<li><address>Department of Economic Development (‘DED’)</address></li>\r\n 	<li><address>Department of Tourism and Commerce Marketing (‘DTCM’)</address></li>\r\n 	<li><address>DED</address>\r\n<ul>\r\n 	<li><address>DTCM</address></li>\r\n</ul>\r\n</li>\r\n</ul>\r\n</td>\r\n<td valign=\"top\" width=\"120\"></td>\r\n</tr>\r\n<tr>\r\n<td valign=\"top\" width=\"100\"><address class=\"MsoNormal\"><strong>Licence holder </strong></address></td>\r\n<td valign=\"top\" width=\"243\"><address class=\"MsoNormal\">Must be a company incorporated at the DED and approved by the DTCM.</address></td>\r\n<td valign=\"top\" width=\"120\"><address class=\"MsoNormal\">Must be a company incorporated at the DED and approved by the DTCM.</address></td>\r\n</tr>\r\n<tr>\r\n<td valign=\"top\" width=\"100\"><address class=\"MsoNormal\"><strong>Status of licence holder vis-à-vis the units </strong></address></td>\r\n<td valign=\"top\" width=\"243\"><address class=\"MsoNormal\">The licence holder should be the manager of the units. The units can be located in different locations, owned by different owners and each unit must be separately classified as a holiday home under the Decree.</address></td>\r\n<td valign=\"top\" width=\"120\"><address class=\"MsoNormal\">In order to obtain a hotel apartment licence, the licence holder should be the owner (or leaseholder) of the building in which the hotel apartments are located.</address></td>\r\n</tr>\r\n<tr>\r\n<td valign=\"top\" width=\"100\"><address class=\"MsoNormal\"><strong>Unit </strong></address><address class=\"MsoNormal\"><strong>requirements</strong></address></td>\r\n<td valign=\"top\" width=\"243\"><address class=\"MsoNormal\">A minimum of 20 units (villas or apartments (or a combination of them) is required.</address></td>\r\n<td valign=\"top\" width=\"120\"><address class=\"MsoNormal\">The apartments must all be located in one building and classified as hotel apartments in accordance with the classification requirements of the DTCM.</address></td>\r\n</tr>\r\n<tr>\r\n<td valign=\"top\" width=\"100\"><address class=\"MsoNormal\"><strong>Classification of the units</strong></address></td>\r\n<td valign=\"top\" width=\"243\"><address class=\"MsoNormal\">Units are classified as either ‘Holiday Homes – Standard’ or ‘Holiday Homes – Deluxe’. There are differing standards attached to each classification.</address>&nbsp;</td>\r\n<td valign=\"top\" width=\"120\"><address class=\"MsoNormal\">The hotel apartments are classified as ‘Standard’, ‘Deluxe’ or ‘Superior’, depending on the quality and facilities of the building housing the hotel apartments, and the services to be provided, if any.</address></td>\r\n</tr>\r\n<tr>\r\n<td valign=\"top\" width=\"100\"><address class=\"MsoNormal\"><strong>Commencement of operation prior to classification  </strong></address></td>\r\n<td valign=\"top\" width=\"243\"><address class=\"MsoNormal\">The licence holder is allowed to commence its operation prior to the classification of the holiday homes.</address></td>\r\n<td valign=\"top\" width=\"120\"><address class=\"MsoNormal\">Classification of the hotel apartments is subject to the classification of the entire building in which the hotel apartments are located and therefore the licence holder cannot commence its operations prior to such classification.</address></td>\r\n</tr>\r\n<tr>\r\n<td valign=\"top\" width=\"100\"><address class=\"MsoNormal\"><strong>Services that may be provided by the licence holder</strong></address></td>\r\n<td valign=\"top\" width=\"243\"><address class=\"MsoNormal\">Services provided by the licence holder are generally limited to rental of the units to the guests, and provision of a contact telephone number for the guest in the event of any emergency, problem or breakdown of amenities within the unit.</address>&nbsp;\r\n\r\n<address class=\"MsoNormal\">The holiday home operator will usually outsource facilities management to a third party facilities management company.</address>&nbsp;\r\n\r\n<address class=\"MsoNormal\">The licence holder cannot provide services relating to facilities that are not included in the room. Therefore, any facilities that may be operated from a building in which holiday homes are located, would need to be separately licensed in respect of the activity being carried out, and operated under that licence.</address></td>\r\n<td valign=\"top\" width=\"120\"><address class=\"MsoNormal\">In general, a hotel apartment is a ‘hotel establishment’ offering guests a complete self-contained sole occupancy unit consisting of studios and units with one or more bedrooms, with at least a living room, a kitchen with cooking facilities and a dining area.</address><address class=\"MsoNormal\">The hotel apartment may benefit from hotel-like amenities such as bar and lounge, staff, hotel operator service, reception, guest relations, concierge/tourist information, restaurant and room service.</address>&nbsp;</td>\r\n</tr>\r\n<tr>\r\n<td valign=\"top\" width=\"100\"><address class=\"MsoNormal\"><strong>Status of the licence holder vis-à-vis staff providing the services</strong></address></td>\r\n<td valign=\"top\" width=\"243\"><address class=\"MsoNormal\">The company will hold the licence and be the employer of the staff providing the holiday home rental services.</address></td>\r\n<td valign=\"top\" width=\"120\"><address class=\"MsoNormal\">The company will hold the licence and be the employer of the staff providing the services to the hotel apartments.</address></td>\r\n</tr>\r\n<tr>\r\n<td valign=\"top\" width=\"100\"><address class=\"MsoNormal\"><strong>Licensed activity</strong></address></td>\r\n<td valign=\"top\" width=\"243\"><address class=\"MsoNormal\">The licensed activity of the company as defined by the DED/DTCM, is as follows:</address>\r\n<ul>\r\n 	<li><address>Vacation Homes Rental</address></li>\r\n 	<li><address>Activity Code: 551010<strong> </strong></address></li>\r\n 	<li><address>Activity Group:Time sharing</address></li>\r\n 	<li><address>Licence Type: Tourism<strong> </strong></address></li>\r\n 	<li><address>Activity Description:Includes offering owned or rented furnished accommodation for renting to vacationers on a daily, weekly, monthly or annual basis. It requires rental of the unit as a whole, and not partially as rooms or beds.</address></li>\r\n</ul>\r\n</td>\r\n<td valign=\"top\" width=\"120\"><address class=\"MsoNormal\">The licensed activity of the company as defined by the DED/DTCM, is as follows:</address>\r\n<ul>\r\n 	<li><address>Hotel Apartments Rental</address></li>\r\n 	<li><address>Activity Code: 701006</address></li>\r\n 	<li><address>Activity Group: Tourism Activities</address></li>\r\n 	<li><address>Licence Type: Tourism</address></li>\r\n 	<li><address>Activity Description: Includes firms which furnish residential apartments with all requisites and means necessary for residential purposes. Such apartments are leased for relatively long periods in return for monthly or annual rent.</address></li>\r\n</ul>\r\n</td>\r\n</tr>\r\n<tr>\r\n<td valign=\"top\" width=\"100\"><address><strong>Dubai tourism taxes and fees</strong> <strong> </strong></address></td>\r\n<td valign=\"top\" width=\"243\"><address class=\"MsoNormal\">The DTCM will impose a 10% Municipality Fee on all bookings once licensed operators are registered. Licensed operators will also be required to collect the new Dubai Tourism Dirham Fee of 10 AED for standard holiday homes and 15 AED for deluxe holiday homes per booked room night, additional to the Municipality Fee.</address>&nbsp;</td>\r\n<td valign=\"top\" width=\"120\"><address class=\"MsoNormal\">The DTCM will impose a 10% Municipality Fee on all bookings once licensed operators are registered. Licensed operators will also be required to collect the new Dubai Tourism Dirham Fee of 10 AED for standard hotel apartments, 15 AED for deluxe hotel apartment and AED 20 for luxury hotel apartments per booked room night, additional to the Municipality Fee.</address></td>\r\n</tr>\r\n<tr>\r\n<td valign=\"top\" width=\"100\"><address class=\"MsoNormal\"><strong>Operation after licensing </strong></address></td>\r\n<td valign=\"top\" width=\"243\">The licence holder will enter into management agreements to manage holiday home units, by opening a portal account at the DTCM whereby the units will be registered and a reception/registration system for check-in and check-out will be implemented, together with calculation of the Dubai Tourism Dirham Fee to be collected from guests. The company will have to secure at least 20 units in order to apply for and obtain individual classification permits for each unit, (which cost approximately 750 AED per room).   The company shall provide DTCM with an undertaking from the classified unit owner that the owner has entered into a management agreement with the company together with the owner’s passport copy and the unit title deed.   Once the unit is registered and the permit fees are paid, the permit for the unit will be issued.</td>\r\n<td valign=\"top\" width=\"120\">Once classification is issued and the licence is obtained, the licence holder is expected to commence operation and receive guests in the hotel apartments.</td>\r\n</tr>\r\n<tr>\r\n<td valign=\"top\" width=\"100\"><address class=\"MsoNormal\"><strong>General requirements</strong></address><address class=\"MsoNormal\"><strong> </strong></address></td>\r\n<td valign=\"top\" width=\"243\">\r\n<ul>\r\n 	<li>Holiday home rentals will be allowed on a daily, weekly and monthly basis.</li>\r\n 	<li>Licensees will not be allowed to rent partial properties, i.e. split a property into separate rooms or beds.</li>\r\n 	<li>Hotel apartments building shall provide all facilities, including, reception, room service, laundry, restaurants and bar, etc.</li>\r\n</ul>\r\n</td>\r\n<td valign=\"top\" width=\"120\"></td>\r\n</tr>\r\n</tbody>\r\n</table>\r\n&nbsp;\r\n\r\nIn addition, both types of units are subject to the below regulatory requirements:\r\n<ul>\r\n 	<li>The licence holder will have to demonstrate experience in the hospitality sector.</li>\r\n 	<li>The DTCM will register, monitor and inspect holiday homes and hotel apartments to comply with set standards.</li>\r\n 	<li>Unlicensed operators will be fined and immediately closed down.</li>\r\n 	<li>Each licensed property will have to display an official certificate of registration by the DTCM within the property.</li>\r\n 	<li>Licensed properties will have to be properly and regularly maintained.</li>\r\n 	<li>Electricity and water must be provided to customers at no additional charge.</li>\r\n 	<li>Licensees will be required to participate in the electronic program of guest registration for hotel and tourism establishments.</li>\r\n 	<li>Licensees must provide data and statistics to the DTCM.</li>\r\n 	<li>Licensees will not be allowed to act as an intermediary, or middle man, between unlicensed operators and their customers.</li>\r\n 	<li>Licensees must collect taxes and fees as set out by the Dubai Municipality and the DTCM for each confirmed booking.</li>\r\n 	<li>Licensees will require insurance to the required specification of the DTCM for the duration of the licence term.</li>\r\n 	<li>The DTCM will have powers to warn, suspend apply fines and cancel the licence of any operator that is in violation of their rules.</li>\r\n</ul>\r\n&nbsp;\r\n\r\n<strong>Conclusion</strong>\r\n\r\nHoliday homes and hotel apartments are two concepts that are fundamentally different from each other and are designed to achieve diverging results. Most of all, each concept is governed by a different set of licensing and regulatory requirements which needs to be clearly understood by investors as a precondition to determining whether to venture in one concept or the other.'),
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(98266, 5338, 'pageSummary', '2015 was marked with the announcement of some unprecedented large-scale mergers and acquisitions of hotel operator companies.'),
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(98260, 5338, 'content', 'March 2016\r\n\r\n<hr />\r\n\r\nAccording to the predictions of hospitality experts, other hotel chains may be contemplating the same over the next few years in order to equal the capabilities of the larger players and better compete in the market.\r\n\r\nWhilst the consolidation of some of the biggest hospitality companies is exciting news, this may not necessarily be good news for hotel owners. Whilst there has been discussion in the industry press with respect to the impact of the mergers on the companies involved and on consumers, the potential impact on hotel owners have been mainly left unaddressed and we now offer our thoughts.\r\n\r\nThis article further explores possible scenarios of how mergers of large hotel companies may impact hotel owners, in respect of hotels both in operation and under development.\r\n\r\n<strong>Change or repositioning of a Brand</strong>\r\n\r\nFollowing a merger, the portfolio of brands of the newly merged company may be extensive, with potential overlap or duplication of brands within the same segment. As a result, the company may need to consider repositioning, rebranding, or retiring one or more of the brand. This will be the case particularly if it is considered that due to similarities between certain brands, some of them are no longer viable or may create competition with other brands now comprised in the same portfolio, or which may be simply too expensive to maintain as part of the enlarged portfolio.\r\n\r\nAny such changes to the brand will impact a hotel owner whose hotel bears such brand, and we therefore need to consider how this is regulated in a hotel management agreement (“HMA”).\r\n\r\nIt is usually the case that standard provisions of the operators’ HMAs do not provide any protection for an owner in respect of future repositioning or change of a brand. The result of this is that, unless there has been specific negotiation in the HMA to provide an owner with flexibility and options where the brand of its hotel is repositioned or changed, the hotel owner may find that its hotel must carry a different brand name from that originally contracted for in the HMA. The imposition of this on an owner may not necessarily be well received, particularly if the new branding results in a substantial change of the brand concept, standards, and positioning (which may impact the hotel’s market segment and financial performance). A change and/or repositioning of the brand may also bring opportunities to expand into a new market segment, or to achieve greater flexibility to increase revenue, however, any such change is likely to require significant expenditure from the owner to adapt its hotel in line with the new branding requirements, which may negatively impact the owner’s return in the short term.\r\n\r\nIn respect of hotels already under operation pursuant to an HMA which does not provide sufficient protections for an owner, the changes required resulting from the brand repositioning will ultimately need to be implemented in the hotel. However, for new hotel projects whose HMA is still under discussion, it may be possible to negotiate a certain level of flexibility and protection for the owner.\r\n\r\nAnother issue for owners to consider is the exclusivity arrangement under the existing HMA, since usually exclusivity arrangements are structured to give protection only to the brand of hotel. Therefore, where there is a future change of the brand name of that hotel, the exclusivity protection under the HMA may no longer exist which could leave an owner exposed to unexpected competition should the operator take over management of other hotels now bearing the same brand as the owner’s hotel and which are located in close proximity. In this respect, achieving as much protection as possible of an owner’s interests, during negotiation of the HMA is essential.\r\n\r\n<strong>Unification of Brand Standards </strong>\r\n\r\nAnother consequence of a merger of hotel operators will be the potential unification of brand standards, including IT standards. Such unification will apply to all hotels within the portfolio of the merged companies, regardless of whether any particular hotel brand is repositioned, changed or retired, following the merger.\r\n\r\nEventually, every hotel owner will be required to comply with the unified brand standards, and the key questions for an owner in this respect would be “when” “how” and “at what cost”?\r\n\r\nIt is often the case that the standard terms of an operator’s HMA will not provide any protection to an owner in the event of changes to brand standards, and the owner will ordinarily be required to adhere to the implementation of such changes. As a result, unless an owner has specifically negotiated certain provisions in respect of implementation of brand standard changes to provide some comfort and protection for the owner, the owner will be exposed to the mandatory implementation of all changes, regardless of the amount of additional expenditure required to fund such changes. If there is insufficient revenue generated by the hotel to fund the implementation of changes (which might especially be the case if the changes take place during the initial operational years when the hotel business is still achieving stabilisation), the owner may have to seek debt financing.\r\n\r\nAlthough operators will usually provide a phasing-in period for implementation of changes to brand standards (particularly where the costs of same must be funded by the owner’s own capital), unless flexibility is agreed in the HMA to protect the owner’s position the period of time for implementation can be defined by the operator at its own discretion. This can give rise to a conflict between operator’s interest in benefiting and regularising the brand, and the financial performance of the hotel and the owner’s additional expenditure requirements.\r\n\r\nTherefore, for developers of new hotel projects, it is essential to seek protection and flexibility in the HMA, in case of a change of the brand standards in the future, particularly as the bottom line is that all hotels of the brand will have to comply with the changes, and non-compliance would not only put the owner in breach of its obligations under the HMA, but may result in an outdated hotel which is not able to compete at the level of other hotels of the same brand.  A balance is achievable and an owner should look to minimise, so far as possible, the impact of its implementation of brand standard changes, through agreeing in the HMA a suitable grace period to implement the changes, with the aim that the costs of change be covered from profit generated by the hotel business rather than from the owner’s equity.\r\n\r\n<strong>Change to centralised operator services and loyalty programs</strong>\r\n\r\nIn most cases, the mandatory centralised services that will be provided by an operator is not exhaustively set out in an HMA, with the result that amendment of mandatory services may be made at the operator’s discretion. Additionally, the charges for centralised services as set out in an HMA (including reservation fees and guest loyalty program costs) will not be fixed for the duration of the term of the HMA, and will be subject to change to reflect increases in the cost of providing such services.\r\n\r\nTherefore, hotel owners are under an obligation to allow the hotel to participate in such centralised services and loyalty programs, regardless of changes to the services or the cost of same.\r\n\r\nHowever, an upside of a merger between hotel operators will be the benefit gained through increased economies of scale and buying power of an enlarged operating company, and therefore hotel owners should benefit from reservation systems now having a wider reach, a merged database of customers loyal to the brand, and greater bargaining strength over third party suppliers and service providers to procure more favourable terms and conditions (including pricing).\r\n\r\n<strong>What to expect next?</strong>\r\n\r\nGiven the current and envisaged consolidation of operators and brand portfolios within the hotel industry, developers and owners may encounter less flexibility from an operator on certain provisions of the HMA in its negotiations. This arises as a result of the need to achieve unification and consistency across the operator’s business and brand portfolio, leaving less possibility for variation to its terms and conditions.  There will always be exceptions for “anchor” hotel developers, where the property in question will provide an operator with a strategic point of entry or a portfolio of hotels in a region or country having little or no existing brand representation, especially if the region in question is a new and/or emerging market for the hotel operator, but these remain relatively rare opportunities.\r\n\r\nIt will be interesting to see whether the approach of hotel developers and owners changes going forwards, given the anticipated large-scale mergers and consolidation of the market, particularly in already well established locations where competition between brands is high. It may be that owners will seek a unique differentiation for their future hotels, and as a result, may consider the smaller players in the market, subject to whether this suits the project and its anticipated market. As a result, smaller hotel operator companies may be provided with an opportunity to deal with owners who are now looking for flexibility and a strategic partnership, and who may have overlooked such operators previously. However, even then, hotel owners should keep in mind that consolidation of operators within the market remains a constant option, and therefore, protection for an owner against such future consolidation should be always sought during negotiation of the HMA, in order to achieve a balance of interest between the operator and owner.'),
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(98245, 5337, 'content', 'March 2016\r\n\r\n<hr />\r\n\r\nThe Resolution is now the primary vehicle through which the Ministry of Interior will oversee elements of safety and security at sports events in the UAE, leveraging the police, civil defence and other relevant authorities as necessary.\r\n\r\nMake no mistake, this is a cornerstone law for the local sports industry, so it is critical that people and companies operating within it – including event organisers, authorised private security firms, sporting regulatory bodies, fans, teams and other participants – fully understand their obligations to avoid falling foul of the law, which at its most punitive can carry serious criminal charges.\r\n\r\nWhile the headline-grabbing element of the law relates to unruly fan behaviour, it actually has a wide-ranging impact; from the planning, coordination and safety behind event organisation, through to on-pitch, court or track conduct, as well as in the stands.\r\n\r\nClearly, we have not yet had much time to see the new law in action, so there remains some guesswork around how the rules will actually be enforced. However, knowing what those rules actually are – and ensuring you operate within them – is the best way to be confident of your legal position should an incident arise.\r\n\r\nSo, what are the critical details behind the new rules? Despite the breadth of the law, its various touchpoints can loosely be grouped under three target areas in terms of application: addressing safety and security at sporting events through (i) Facility/Venue and Organiser practices, (ii) Fan Conduct and (ii) Anti-Corruption.\r\n\r\n<strong>Sports Facilities &amp; Organisers</strong>\r\n\r\nThe bulk of the law relates to this area, with organisers and venue managers subject to specific new compliance requirements and oversight, aimed at ensuring the UAE is aligned with or setting global best practice.\r\n\r\nMost notably, all sporting events should have a flexible administrative and organisational guide, including necessary measures relevant to the nature and scope of the event, as well as specifics on the venue. This guide is subject to approval by a designated police contact.\r\n\r\nFor a number of sophisticated event organisers, designing, submitting, and ultimately implementing their event management plans, in accordance with their approved guide, will essentially cement and perhaps reformulate some elements of best practices they have previously established. This could mean substantial change for some. However, they will also need to take additional steps to comply with specific protocols under the new law.\r\n\r\nThese requirements are welcome, such as the need for a designated and qualified Event Security Officer to coordinate with a Police Observer. And the use of the latest technology in communications and crowd management, effectively mandating a blend common sense with modern capabilities, to increase safety and security as appropriate for modern day sporting entertainment.\r\n\r\nFacilities, venues and event organisers can be subject to fines of up to AED 500,000 for non-compliance with these rules.\r\n\r\n<strong>Fan Conduct</strong>\r\n\r\nSports fans face tougher fines for criminal actions conducted at events or venues. The law does not replace the existing Penal Code in such circumstances but it does complement it. This means that committing any Penal Code offence at a sporting event will now be considered an aggravating factor, so would be likely to attract greater punishment than if it had been committed elsewhere.\r\n\r\nThere will also now be formalised crowd restrictions on entering the field of play, bringing prohibited or dangerous materials into a venue, taking to or acquiring weapons inside a venue, violent conduct, throwing materials, insulting or racially abusing or gesturing other people, disregarding facility rules, and using a venue for political purposes.\r\n\r\nThere are numerous other restrictions but generally speaking the changes bring the UAE legally into line with global best practice when it comes to the conduct of fans. Breaking the law can now have dramatic consequences. Depending on the severity of the crime, it can result in imprisonment of three months and fines up to AED 30,000.\r\n\r\n<strong>Anti-Corruption </strong>\r\n\r\nGiven what is unfolding in global sport at present – with the likes of FIFA, the IAAF and various other recognised international sporting bodies facing intense scrutiny around their actions – this aspect of the UAE law is not only timely but in some ways pioneering. In essence, it removes a significant chunk of self-regulation from sporting bodies and brings it under federal law.\r\n\r\nCheating, fraud or corruption in gaining rights to host a sporting event can now be punishable by a fine of up to AED 1 million, plus liability for certain costs. We should keep a keen eye on the interpretation and scope of enforcement of this particular provision, to see if its application could be used more broadly to address some the issues surrounding match-fixing and cheating that we know have plagued international sports in recent times.\r\n\r\nWith this in mind, UAE could be taking a welcome and a significantly pro-active position to protect the integrity of its sporting events. The law could provide a platform for broader tackling of corruption in sports to be specifically identified and punishable through a sports-specific statute, in addition to the measures within the UAE Penal Code already applicable to such conduct.\r\n\r\nOf course, the full implementation and impact of these new rules is yet to be seen. But, they are potentially far reaching in their scope. However, they should be welcomed in terms of trying to ensure that the UAE, which already hosts some of the world’s most popular sporting events and may have aspirations to host the Olympics, remains at the forefront of the global sporting events sector. Nonetheless, new rules need to be properly understood for companies and individuals to act within their boundaries. Getting this right will take time and significant effort but guarantee the law is a success in practice and not just on paper.\r\n\r\nA version of this article first appeared in the GulfNews on 18 February 2016.\r\n\r\n&nbsp;'),
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(98226, 5336, 'content', 'March 2016\r\n\r\n<hr />\r\n\r\nIn order to ensure stability, one must take a long term view. The key to having a stable family-owned business is to ensure that it is managed in a way that allows it to grow, prosper and avoid paralysis. Attaining this objective is no easy road and this is where the value of governance comes into play.\r\n\r\nGovernance is an essential process through which family businesses can set and implement rules governing and regulating different aspects of the business. It is a practice that covers a wide scope that could range from regulating the employment of family members to the setup of board committees to developing a balanced and coherent investment strategy. Governance should ensure the attainment of the overall vision and objectives of both the family and the business and set the necessary implementation strategies, allowing the family business to succeed without fracturing family harmony. Governance is an ongoing journey which moves with the business and adapts to its needs.\r\n\r\n<strong>The Necessity</strong>\r\n\r\nFor family businesses specifically, good governance should not be viewed as optional, but essential. Governance can deliver the necessary solutions for the challenges all family businesses encounter and facilitate amicable resolution of issues all family businesses face. Such challenges can differ depending on the stage the family business has reached and the generation currently in charge.\r\n\r\nFor example, family businesses controlled by the founder generation often struggle with letting go and entrusting the next generation with responsibility and control. In contrast, family businesses where the business has already been passed to the new generation may find it difficult to cope with the differences of mindset, the involvement in the business and the need to work with other stakeholders, as some stakeholders may want growth while others may want a cash out.\r\n\r\n<strong>Why is governance an absolute necessity in the case of family businesses? </strong>\r\n\r\n<em>Particularity </em>\r\n\r\nIn family businesses, two essential elements should always be given due consideration, i.e. the family element and the business element. Balancing these two key elements forms the ideal road to success and continuity of family businesses. While applying governance to family businesses is more complicated than applying it to ordinary companies, governance is even more necessary in family businesses whose survival depends on the satisfaction of entirely different needs.\r\n\r\nThe law disregards this particularity, but tools are available for family businesses that recognize the importance of governance and wish to put it to good use. The implementation of governance is not only beneficial to the business, but it can also assist in regulating and defusing family issues and can ensure that family issues do not overwhelm the business. In the real world, striking this desired balance can be challenging. Factors such as emotional baggage, family ties and family traditions often get in the way. Good governance helps families build a stable base of consensus and can result in more transparent, clear and stable family affairs, promoting family unity and harmony and also attributing to the business’s growth.\r\n\r\n<em>Growth in Numbers</em>\r\n\r\nIn addition to the growth of business operations, the rapid growth in the number of shareholders in family businesses through generational change in the GCC region also attributes to the need for governance in these businesses. Large families are part of the culture in the GCC and the simple entrepreneur can have dozens of children and grandchildren, all of whom will grow up to be stakeholders. Managing this growth through governance by adopting an appropriate structure with distinct ownership and clearly defined roles can promote stability and can induce more positive growth.\r\n\r\n<em>Transition</em>\r\n\r\nIn family businesses, transition of the founder out of the business due to health or morality is often a sensitive topic and a tricky phase which requires delicate planning to avoid conflict and potentially grave consequences. Setting a succession plan as a part of governance is often the key to a smooth transition of its business and its very survival.\r\n\r\n<strong>What are the risks that a family business may face without governance?</strong>\r\n\r\nLoss of opportunity\r\n\r\nWhilst not having a sound governance system in place does not necessarily mean the demise of the business in the short future or a loss of its profits, it can result in a continuous chain of losses of opportunity. Family business that put in place a governance strategy have better coordination and are likely to achieve and prosper even more. With no clear governance “lowest common denominator” decision making prevails as every stakeholder has a veto power, usually not the best way for the business to move forward.\r\n\r\nUpsurge of Conflicts\r\n\r\nConflict in the case of family businesses can often be emotional and dramatic. The absence of governance can lead to the lack of healthy communication between family members and can result in the upsurge of such conflicts. Families need a framework to decide issues which must be resolved. Also, to the family unity and the success of the business, setting a conflict resolution mechanism can contain, speed and simplify the process of resolving any disagreement.\r\n\r\nDamaging Nepotism\r\n\r\nWhilst family succession has many positives and is the arm of most families, this is not to be confused with damaging nepotism i.e. the promotion of family members into roles they are not capable of performing, or to which they are manifestly unsuited. The absence of governance allows damaging nepotism. Putting in place a clear set of rules that regulates key elements such as the employment, development of family members, assessment and training of family and non-family employees in a fair and transparent way can help in avoiding damaging nepotism and can contain, save and preserve the business.\r\n\r\nEffective implementation\r\n\r\nA coherent governance system can assist families in facing challenges. Merely having a set of listed structures and policies in place does not necessarily amount to a good governance practice, as reaching a positive impact through governance requires governance to be “lived and breathed” everyday. Belief in the family values, respect and proper integration are essential pillars to good governance. An important element which can make or break the process of implementation is careful analysis of whether the adopted governance strategy is really fit for this particular family or its business. Each family business should look at its own needs and objectives and, based on this consideration, choose workable governance bodies, policies and procedures.\r\n\r\n<strong>Conclusion</strong>\r\n\r\nGovernance in family businesses is not just a trendy buzzword, it is a pressing issue for many GCC companies to which attention is long overdue. Governance is necessary because although family businesses are special, business is still business at the end of the day; and generational transition in business often creates threats to the business and family harmony. Only the planning and practice of good governance will effectively defuse these threats.'),
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(98209, 5335, 'content', 'March 2016\r\n\r\n<hr />\r\n\r\nIn Dubai and Abu Dhabi, the respective Department of Economic Development (“DED”) requires entities planning sales promotions to first obtain a permit. If a promotion were to specifically target any of the other emirates, then it would be appropriate to considering seeking permits in such emirates.\r\n\r\nThe process for obtaining a sales promotion permit from the DED is straight-forward, and can usually be completed within a week or so. Information on the proposed promotion, such as its general nature, the nature, quantity and value of any prizes, and the period over which the promotion will be run, need to be submitted to the DED along with a copy of the organiser’s trade licence and premises lease, an application form for the permit, and the official fee.\r\n\r\nOfficial fees are relatively modest and can vary depending on aspects such as the duration of the promotion, the value of any prizes and the extent of any advertising.\r\n\r\nPrizes that are products such as tobacco, alcoholic beverages or pharmaceuticals, are not permitted. Cash prizes are generally not permitted, although they may be permissible in circumstances where cash is a key aspect of the organiser’s core business, such as a money exchange. There are no prescribed requirements with regard to any ‘skill’ element. Raffle-type prize draws, where participants simply purchase tickets, are generally not permitted. For competitions involving prize draws, it is necessary to have an official from the DED in attendance at the prize draw to act as an official witness.\r\n\r\nRunning a sales promotion without a permit can attract a penalty. The penalty can vary depending on whether the sales promotion is one for which a permit, if sought, would have been issued. If an unauthorised sales promotion were to come to the attention of the DED, then the types of penalties that could be expected would (at the time this article went to print) range from around AED 2,000 (about USD 540) to AED 25,000 (about USD 6,800) for a first offence, and higher in subsequent instances. Generally, if the subject matter of the competition is not something that the DED would have approved, then higher penalties are likely to apply.\r\n\r\nThere is only a limited likelihood of the DED taking issue with an on-line promotion not specifically targeting participants in the UAE. If the DED did become concerned by the absence of a permit for such a promotion, then the most likely outcome would be for it to liaise with the local telecommunications regulator to have access to the offending site blocked.\r\n\r\nAdditionally, it is worth noting that there are two ‘formal’ sale seasons in Dubai. The Dubai Shopping Festival is an annual retail event and generally spans the month of January. Although not mandatory to offer sales promotions during the Dubai Shopping Festival, many retail stores choose to do so during this time. Sales promotions conducted during the Dubai Shopping Festival are regulated by the Department of Tourism and Commerce Marketing, which issues permits for sales promotions conducted during the Dubai Shopping Festival. The Dubai Summer Surprises is a separate retail event, similar to the Dubai Shopping Festival, but conducted for a period of around 30 days sometime between June and September. Again, it is not mandatory to offer sales promotions during Dubai Summer Surprises, although it is common to do so. Permits for sales promotions conducted during the Dubai Summer Surprises are also issued by Department of Tourism and Commerce Marketing. The specific rules and regulations in respect of each specific sales season are issued prior to the relevant retail event. These generally track the DED’s rules in respect of sales promotions.\r\n\r\nIf a sales promotion is going to be limited to a specific free zone, then consideration should also be given to whether any free zone-specific rules apply. The DEDs do not generally have authority to control activities in the many free zones located in the UAE.\r\n\r\nAny businesses planning to run a sales promotion in the UAE, in the nature of those outlined above, should consider the regulatory regime relating to such promotions and seek to obtain the requisite permit. The nature of this jurisdiction is such that it is often necessary to liaise directly with the relevant authorities in order to better understand the way in which laws and regulations are likely to be applied in practice.\r\n\r\nAl Tamimi &amp; Company’s Technology, Media &amp; Telecommunications team regularly advises on advertising and marketing related legal issues, including considerations relating to promotions, including sweepstakes and on-line promotions. For further information, please contact Nick O’Connell – n.oconnell@tamimi.com or Sana Saleem – s.saleem@tamimi.comCompetitions, Promotions'),
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(98175, 5333, 'content_description', 'The GCC regional plans for rail, taken together and viewed in the context of their respective timetables, are of an entirely different order of magnitude to any major infrastructure project that has been achieved in any other comparable region. For both freight and passenger rail, this is new territory. \r\n'),
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(98177, 5333, 'pageSummary', 'The GCC regional plans for rail, taken together and viewed in the context of their respective timetables, are of an entirely different order of magnitude to any major infrastructure project that has been achieved in any other comparable region. For both freight and passenger rail, this is new territory.'),
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(98189, 5333, '_yoast_wpseo_metadesc', 'Al Tamimi & Company examines why rail is critical to the future success of the GCC as its members seek to learn from the experience of other jurisdictions in developing their rail programmes.'),
(98190, 5334, 'content', 'March 2016\r\n\r\n<hr />\r\n\r\nThose concerns first surfaced in the wake of the Tamweel Tower fire in Jumeirah Lake Towers in November 2012.\r\n\r\nThe insurance implications of buildings covered with potentially flammable aluminum cladding are enormous. The cost of insuring such buildings is sure to increase significantly, if it has not done so already.  In some cases, it may be difficult to insure such buildings at all.\r\n\r\nFor the owners, owners’ associations and tenants of such buildings, the question of whether they are insured in the event of fire is understandably of prime significance. Yet the responsibilities of owners, developers, owners’ associations and tenants to take out insurance and their rights and obligations towards each other as well as to third parties with respect to the parts of the building over which they have this responsibility are often poorly understood.\r\n\r\n<strong>Third Party Liability of Property Developers and Owners’ Associations</strong>\r\n\r\nAs a general rule, property developers and owners’ associations remain responsible for all areas of a property over which they maintain control.  Where those areas cause harm to third parties, the property developer or the owner’s association may be liable to the injured party due to their perceived ability to eliminate or minimise the risk of harm.\r\n\r\nTo protect themselves against incurring a legal liability to third parties in those circumstances, the property developer or owner’s association can take out public liability insurance.  This form of insurance will cover the property developer or the owner’s association for liability to pay damages or compensation to persons who have suffered loss as a result of a harm flowing from the acts or omissions of the property developer or the owner’s association.\r\n\r\nHowever, because public liability insurance only covers an insured person for a legal liability to pay damages or compensation to a third party for loss, this form of insurance will usually not cover an insured person unless:\r\n<ul>\r\n 	<li>the liability is the result of a judicial finding or of an arbitral award; or</li>\r\n 	<li>the insured person would have had the liability under the general law rather than under a private agreement or contract.</li>\r\n</ul>\r\nFor a property developer or an owner’s association to incur a liability covered by this form of insurance, they will usually need to be found to be legally at fault.  In the UAE, the hurdle for the finding of legal fault is, compared to western countries, somewhat higher.  The test for causation in particular is considerably more demanding.  For that reason, a third party that has suffered harm as a result of an act or omission of a property developer or an owner’s association cannot be assured of recovery from them.\r\n\r\n<strong>Insurance for Owners and Tenants</strong>\r\n\r\nOwners and tenants of rented properties should always take out insurance covering their respective interests in the property.  The usual form of insurance for this is home and contents insurance.   This form of insurance will typically cover:\r\n<ul>\r\n 	<li>the policyholder’s property and their belongings in the property against accidental damage by risks like fire or flood and against  theft by burglary;</li>\r\n 	<li>the policyholder against liability to third parties, up to a monetary limit set out in the policy, for loss caused by or arising from the policyholder’s own fault;</li>\r\n 	<li>the policyholder for any loss of rent where the policyholder’s property is leased and the loss of rent is due to an insured event.</li>\r\n</ul>\r\nBecause home and contents insurance only provides cover against accidental loss or damage, this form of insurance will usually not cover the policyholder against loss or damage arising from pre-existing defects in the property.  An example of a pre-existing defect in a property would be where the property’s foundations were insufficiently firm and the property sustained structural damage as a result of subsidence.\r\n\r\nWhere the policyholder’s property and/or contents are damaged as a result of fire, the policy should cover the resulting damage even if the property consists of materials that do not comply with building safety standards or are later found to have caused or contributed to the fire.\r\n\r\n<strong>Owners in Jointly Owned Properties</strong>\r\n\r\nIn the case of owners and tenants of jointly owned properties in high-rise apartments in Dubai, the insurance that covers the building and the common areas usually remains in the name of the developer.  Legislation exists in Dubai governing jointly owned property but the authorities are yet to grant licenses to owners’ associations which gives them full legal capacity. For that reason, the responsibility for insuring the common areas of most apartment buildings in Dubai continues to lie with the original developer.   However, this can create problems in the event that the property becomes damaged and the owners suffer loss.\r\n\r\nIn the case of the Tamweel Tower fire, the fact that the property had to be insured by the original developer rather than in the name of the owners’ association meant that the owners’ association was not a party to the contract of insurance and the owners individually did not have standing to recover under the policy.   This contributed to delays in arranging for the building to be reinstated and consequential costs to the owners, much of which will not be recoverable under the insurance that existed over the building.\r\n\r\n<strong>Owners, Owners’ Associations and Developers Claiming Against Builders and Architects  </strong>\r\n\r\nPerhaps the most complex area for all property stakeholders involves cases where rights are sought to be pressed against builders and designers of a residential building for defects.\r\n\r\nArchitects and builders are usually required to take out insurance as part of their obligations under the original contract with the property developer.  The UAE Civil Code (Federal Law No. 15 of 1985) imposes strict liability on architects or engineers for defects that affect, or threaten to affect, the structural integrity of a building that they have designed.  This potential liability applies for 10 years and it cannot be contracted out of.  While there is insurance in the market designed to cover architects and engineers for this kind of liability, there are numerous cases where architects and engineers either fail to take out this insurance or take it out for an insufficient duration.\r\n\r\nA construction contract will also usually require an architect or engineer to take out professional indemnity insurance.  This insurance is designed to cover an architect or engineer for negligent acts or omissions that:\r\n<ul>\r\n 	<li>arise from the discharge of the architect’s or the engineer’s job in designing the building; and</li>\r\n 	<li>cause loss to persons for whom the architect or engineer has a duty of care.</li>\r\n</ul>\r\nThis duty could extend to the owners of apartments in a high-rise building designed by an architect or engineer but that will not always be the case.\r\n\r\nThis form of insurance also has other limitations. First, it will only respond where the architect or engineer has, or would have if sued, a legal liability to make good the act or omission causative of the loss.  Second, the extent to which UAE law provides a remedy for losses flowing from a building or design defect is very limited.  Losses that are considered too remote or that are purely economic (like a property’s diminution in value as a result of a building or design defect) are often not compensable, even though they may have caused real and quantifiable financial loss to the owner of the apartment concerned.  Third, apart from cases based on decennial liability, the availability of a legal remedy for losses caused by building defects is dependent on the finding of legal fault.  This requirement can be quite challenging in the UAE as it requires a clear departure by the architect or engineer from accepted professional standards as well as the materialization of actual physical damage.\r\n\r\nThis means that the prospect of apartment owners successfully recovering against architects or engineers for defects will be very difficult in the absence of actual physical damage.  The same applies for apartment owners seeking to recover against a property developer or an owners’ association.\r\n\r\n<strong>Conclusion </strong>\r\n\r\nSeveral building fires in Dubai have shone a light on the potential fire hazard posed by certain forms of aluminium cladding used to cover the exteriors of many high-rise buildings in the Emirate.\r\n\r\nThe insurance covering most jointly owned high-rise properties remains in the name of the original property developer rather than in the name of an owners’ association.  This is likely to remain the case until such time as owners’ associations are vested with full legal capacity on behalf of the property owners.  This circumstance has the potential to complicate the recovery of insurance proceeds and the repair of the property in the event of significant accidental damage. In addition, the Jointly Owned Property Law (Law No. 27 of 2007 ‘Concerning Jointly Owned Property in the Emirate of Dubai’) and its Directions do not require or permit owners’ associations to take out loss of rent or contents insurance on behalf of their owners and many owners do not take out such insurance. This means that, should a fire occur which damages an owner’s apartment and forces an owner out of the building, the owner will not have any clear right to recover under the insurance policy over the building.\r\n\r\nIdeally, the steps required to make owners’ associations the effective legal entities of the owners in jointly owned buildings ought to be effected as soon as possible.  Once that occurs, insurance policies covering jointly owned buildings that remain in the names of the original property developers can be assigned to the relevant owners’ association.\r\n\r\nIn the meantime, owners in jointly owned buildings would be well advised to consult with the property developers of their building and understand the nature of the insurance arrangements in place.  If the policies do not cover some of the risks that an owner of an apartment may wish to insure (for example, contents insurance or loss of rent), then the owner should contact the developer or the manager of the owners’ association and endeavour to have the policy extended to cover them.  Better yet, individual owners should take out those forms of insurance in their own name.\r\n\r\n&nbsp;'),
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(98171, 5333, 'content', 'March 2016\r\n\r\n<hr />\r\n\r\nIn the current climate it is difficult to avoid concerns about the economics behind the plans. For instance, in the UAE it has been announced that the development of phase 2 of the rail network connecting Abu Dhabi, Dubai and onwards to Oman has been suspended. The knock-on effect as regards Oman is yet to unfold but there may also be a domino effect across the region. However, other projects remain on track and indeed have set records – the Doha metro (now 77% complete in terms of its tunnelling works) had 21 boring machines in operation at one stage.\r\n\r\nThis article examines why rail is critical to the future success of the GCC as its members seek to learn from the experience of other jurisdictions in developing their rail programmes.\r\n\r\n<strong>Railways as Public Goods</strong>\r\n\r\nThe default position for most rail networks is one of public subsidy. Even where attempts have been made to impose some form of competition in the hope of making systems relatively more self-financing (perennially seeking the ultimate goal of a cost reflective tariff, through disaggregating the state utility and carving up the network into a whole new business ecology of track owning companies, track operating companies, passenger rail franchise holders, rolling stock lease companies and the like), the story of subsidy remains key.\r\n\r\nThe issue of subsidy has to be recognized.  Railways are what economists call “public goods”. There is usually a consensus that the public want and need them. In Europe (and elsewhere) that is certainly the case. There is a deep culture of passenger rail in European countries.  Public transport is a factor in everyday life and plays a vital economic role well in excess of any subsidy from which the system benefits. So, to a great extent, the subsidy directly applied to the network has an amplifying but indirect effect throughout the economy.\r\n\r\nLooking further afield, it is arguable that the history of the United States (or at least the massive expansion into the west of the continent) is inextricably bound-up with the expansion of the railway network there, and although the Americans fell out of love with rail during the last century, there is now a marked renaissance in train projects in that part of the world (with all of the attendant benefits in the supply chain). India has a huge network and arguably a strong railway culture, as does China, which has embraced the opportunity of high-speed rail. Compare those cultures with the GCC region where there is (with the exceptions of the historic but now largely defunct Hijaz Railway and the Riyadh-Dammam passenger route) no widespread tradition of rail and many factors which, at first blush, appear to militate against it.\r\n\r\nAs engines of growth and regeneration there are few infrastructure initiatives which have the same impact as a railway network, and they often have other important benefits, including environmental factors such as improved air quality – a particular concern for residents in many GCC cities. Jobs are also important. According to the Oman Daily Observer (27 July 2015), Oman Rail is to employ 40,000 workers on the first phase of the national railway network. Up to 15,000 of those workers could be Omanis. It is envisaged that the railway will create high in-country value (ICV) for Omani nationals through different construction operations related to the rail project. Typical measures creating ICV include the procurement of Omani products and services from Omani subcontractors, the creation of partnerships with Omani subcontractors, and the training and development of an Omani workforce.\r\n\r\nIn Saudi Arabia, education has been put front and centre of the rail programme. The Saudi Railway Polytechnic is one key element in that transformation. Working in partnership with Saudi Railways Company, international education provider TQ Pearson operates the new institution (which commenced training in April 2014). If this kind of approach is replicated across the GCC then it will provide tangible long-term benefits for the region as a whole.\r\n\r\n<strong>Other Benefits</strong>\r\n\r\nAside from the transport benefits of the railways themselves, the scale of property development around new stations and the scope for investment should not be underestimated. A recent example of these benefits can be found in Birmingham, England, where the dilapidated and dark New Street Station (a hub of the UK rail network) has been redeveloped with a massive 435,000 sq ft shopping complex (named ‘Grand Central’) incorporating anchor tenant John Lewis. Contracts have now been exchanged on a 150 year head-lease of the shopping centre for a reported GBP 335 million (PropertyWeek, 22 January 2016) with property company Hammerson in advanced discussions to bring a 50/50 joint venture partner on board for the future ownership of Grand Central.\r\n\r\nRailway stations therefore result in property and retail development opportunities too. Those developments will, in their turn, create more new jobs and growth in the economy. They also allow people more flexibility as to where they live and where they work, delivering net gains in higher paid jobs and leveraging lower housing, education and employment costs.\r\n\r\nIn the GCC region we can look forward to equivalent schemes based around iconic stations such as award winning architect Zaha Hadid’s adventurous design for the King Abdullah Financial District metro station and the Olaya Street blue and green line metro interchange designed by Gerber Architekten in Riyadh. Dubai is also to benefit from a significant extension of its metro in advance of Expo 2020.\r\n\r\nAll of the above will require, among other things, financing and funding arrangements for the construction works; a complex web of EPC contracts (and efficient disputes resolution regimes; franchise concessions in respect of the lines themselves (and their subsequent renewal); rolling stock finance and lease agreements (which will have to dovetail with franchise procurement exercises); economic and safety regulation for the railway network; ticketing regimes integrating peak/off peak; zonal and bus connections; as well as leases for units in associated shopping malls. This all constitutes real economic benefits of the schemes. Because these schemes are in essence brand new businesses. The opportunity for supply chain and logistics providers is also significant, and it will be interesting to see whether and to what extent coordinated responses and approaches develop in this regard across the region.\r\n\r\n<strong>Inter-City Travel</strong>\r\n\r\nAside from the urban metro projects there are also ambitious plans in the GCC region for inter-city travel. The Haramain high-speed line linking Jeddah with the holy cities will add speed and comfort to pligrims’ Hajj experience (the terminal station in Jeddah being similar to the large stations found in Europe, such as Birmingham New Street).\r\n\r\nOn the freight side, the advent of the Saudi land bridge, linking the Gulf with the Red Sea and the North-South line will (it is hoped) ease the passage of freight across the Kingdom, and provide a high quality alternative to traditional road freight. These are globally significant railway projects. They will change the culture of the region and offer a legacy of first-rate employment opportunities for locals and also monumental property development opportunities.\r\n\r\n<strong>Integrated Systems</strong>\r\n\r\nAll of the schemes mentioned above are part of an integrated transport system where connections are relatively easy and the spread of the network takes people where they want to go quickly and cheaply relative to the alternative of driving or flying. There are certainly environmental benefits. But these benefits can only ever be realized if the network is sufficiently wide to optimize people’s choices. That network connectivity also enables genuine measures in traffic calming to be taken (for example, it is doubtful whether London’s congestion charging scheme would have been feasible without its public transport offering a viable alternative). A key element of rail projects is their inter-connectivity with other transport services, such as airports, ports and other local transport services including buses and taxis. This is especially important in the GCC where walking in the heat of summer for even a short period can be difficult.\r\n\r\n<strong>Towards a Culture of Rail</strong>\r\n\r\nOnce the railways have been completed, the real challenge will start – that of developing a culture of rail. Without embracing that cultural change many of the transformational benefits described above risk being lost or dissipated. The GCC has the political will to achieve a real change in how transportation is viewed. In a period of sustained economic turbulence, even if some of the projects stall, there appears to be enough viable projects to ensure that this transformation in the region is secure, and will consolidate and even accelerate once the global and regional economic climates become more stable.'),
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(98156, 5332, 'content', 'March 2016\r\n\r\n<hr />\r\n\r\nThis article considers the case itself, how courts around the world have construed the O.W.Bunker contractual framework differently, the issues caused by this varying judicial interpretation and some of the potential legal solutions suggested in the market to avoid the double payment conundrum in the future.  This article considers matters from a UAE perspective but in order to do so it is necessary to review the approach of the courts on an international basis.\r\n\r\n<strong>The double payment demands</strong>\r\n\r\nOW Bunker &amp; Trading A/S and OW Supply &amp; Trading A/S and its subsidiaries (“OWB”) went into liquidation in November 2014.  As a result, physical suppliers (“PS”) across numerous jurisdictions moved quickly to demand payment directly from shipowner debtors for supply of fuel to their vessels and relied upon numerous causes of action to bring their respective claims.   Ship arrests soon followed when immediate payment was not forthcoming.\r\n\r\nIn parallel the OWB entities in liquidation were not slow to issue payment demands on behalf of the OWB estate, pursuant to the terms of the respective sale contracts.  It soon emerged that OWB  had concluded, one year prior to its collapse, a revolving borrowing base credit facility for a sum of USD 700m from various lenders represented by ING Bank N.V (“ING”) as the security agent. ING purported to have a valid security agreement over the trade receivables due to OWB from the shipowners and accordingly pursued shipowner debtors, often arresting their ships to recover the same debts demanded by PS.\r\n\r\nFor shipowner debtors, the dilemma as to which party to pay for the fuel supply remains.  Most shipowners are willing to settle the dues but, understandably, do not want to pay for the same bunkers twice. As will be noted, the respective courts have sought to deal with this issue through various different applications of legal theory.\r\n\r\n<strong>How have the courts ruled across the world?</strong>\r\n\r\n<em>England </em>\r\n\r\nThe shipowners in (The Res Cogitans) [2015] EWHC 2022 (Comm) argued that the OWB sale contract with the shipowner purported to be a contract for the sale of goods falling under the Sales of Goods Act 1979 (“SOGA”).  In order for a claimant to bring an action for the contract price under SOGA, title in the goods must have passed to the buyer for money consideration.  The owners argued that title could not have passed from OWB to the shipowner for two reasons; firstly the PS still had property over the fuel by way of a retention of title clause and, secondly, because the fuel was mostly consumed prior to payment at the expiration of the 30 day credit period, at which point title in the goods would ordinarily pass.  Since the goods were consumed during the 30 day credit period, there was, owners argued, nothing to pass title in at the expiration of the credit period.\r\n\r\nThe Court of Appeal took the view that the bunker supply contract between OWB and the shipowner was a ‘hybrid’ contract comprising, firstly, a license to consume the bunkers immediately upon delivery without title having to pass, and secondly, a sale contract pertaining to the unconsumed bunkers on board when payment fell due at the expiration of the credit period. With regard to the license, the Court concluded that OWB’s ability to pass title to the owners was irrelevant and that OWB’s claim was a straight debt claim.  However, the agreement to sell the unconsumed fuel at a later time would require the title to pass to the buyers upon payment and so the SOGA would apply to this element of the contract.\r\n\r\nIn our view, the Court of Appeal’s application of legal theory represents quite a divergence from the contractual intentions of the parties.  No doubt those working in the bunkering community would not describe their trade activities as the sale and purchase of licenses to consume fuel immediately and agreements to sell the remaining unconsumed fuel after the credit period expiration.  It appears to be quite a creative decision in this respect and the Supreme Court may yet constue the contractual framework differently when the resultant appeal is heard.\r\n\r\nPending the outcome of the appeal ship ownerscan, reasonably conclude that the SOGA cannot be relied upon to avoid payment to OWB and OWB are deemed entitled to full payment.  However, the decision does not prevent ships from being arrested in different jurisdictions and so the double payment conundrum persists.\r\n\r\n<em>Singapore</em>\r\n\r\nIn Singapore, a consolidated interpleader application was filed by thirteen owners and charterers in Precious Shipping Public Co Ltd v OW Bunker Far East (Singapore) [2015] SGHC 187.  Interpleader relief is designed for situations whereby a third party debtor wishes to pay a debt but is subject to two or more competing claims over the same debt.  The competing claims must be adverse to one another and the court’s decision should extinguish the non-legitimate claim(s) to provide legal certainty on liability.  The third party debtor, as applicant, will pay the debt amount into the court in order that the court may determine entitlement to it.\r\n\r\nIn order for the Singapore High Court to make an order for interpleader relief, the applicant must first adduce evidence that there is prima facie evidence of competing claims.   After assessing the PS’s claims in bailment, retention of title, unjust enrichment, unlawful conversion of property and the option to exercise maritime liens in other jurisdictions, the court held that the PS had no case that could be defined as an adverse competing claim and that the PS was simply seeking to circumvent the insolvency procedure. To rule that the PS had a valid claim would, according to the court, be “unfair” and “unjust”.  Therefore, the interpleader application was dismissed and no order was made.\r\n\r\nThe Singapore Courts appear to have upheld the contractual intentions of the parties in this case by recognising the PS’s potential claim, but limiting it to a liquidation claim against the OWB estate.  Again, the double payment conundrum remains live because vessels who might pay OWB in Singapore may still be arrested by PS in other jurisdictions for the same sum.\r\n\r\n<em>Canada - Canpotex Shipping Services Limited v. Marine Petrobulk Ltd., [2015] FC 1108</em>\r\n\r\nConversely, in September 2015, further to USD 600,000 being deposited by the charterer into court for interpleader relief, the Canadian Federal Court found that the PS was entitled to full payment and that OWB had no claim against the shipowner. Central to the decision was the finding that the PS General Terms and Conditions (“GTCs”) bound both OWB and a charterer by virtue of the valid incorporation of the PS’s GTCs into OWB’s GTCs.  The PS’s GTCs provided for a right of arrest against the shipowner directly in the event of non-payment and had the effect of making the shipowner and OWB jointly and severally liable for the fuel.   The PS’s GTCs were also governed by Canadian law and Canadian law is unequivocal that intermediaries cannot claim against vessels where the intermediary has not paid the supplier for services delivered to the vessel.  Upon OWB’s failure to pay for the fuel, the valid incorporation of the PS’s GTCs into the contract between the shipowner and OWB had the effect of creating a direct contractual right of action against the shipowner by the PS.  Upon payment by the charterer of the contract price, the charterer was released from any further obligation to pay OWB because OWB was held to have breached its contractual obligation to pay for the fuel.\r\n\r\nThe Court’s ruling in this case is refreshingly practical and probably best reflects the contractual and commercial intentions of the parties. However, it is acknowledged that the case is limited because we do not know how the courts would rule if the PS’s GTCs were not incorporated into OWB’s GTCs.\r\n\r\n<em>United Arab Emirates</em>\r\n\r\nUnlike the common law jurisdictions mentioned above, the UAE adopts a civil law legal system.  Under the civil law, the bunker delivery receipt (“BDR”) has historically been recognised as a valid and binding contract on the shipowner in its own right, premised on Articles 135, 137(2) and 154 of the Commercial Maritime Code (Federal Law No. 26/1981 hereinafter the “CMC”) which makes shipowners liable for contracts concluded by the Master on behalf of the vessel.   For many years we have observed courts across the entire Gulf region rule in favour of the PS pursuant to the BDR and there is no reason to anticipate change because the courts in the Gulf, being paper-based, have always viewed the stamping of a BDR as proof of offer and acceptance in the formation of a contract.\r\n\r\nAfter the collapse of OWB, many PS in the Gulf sought to recover unpaid supply dues from shipowners on the premise that the BDR constituted a contract under UAE law.  This was contested by shipowners, OWB and ING because the notion of the BDR is derived from court trends, custom and practice, coupled with an interpretation of provisions of the CMC. We doubt whether the OWB branch in Dubai really was aware during day-to-day practice that a contract arose through stamping and signing of the BDR and it is difficult to measure how many PS were aware of this either.\r\n\r\nAt the end of 2015, the Khorfakkan Court of Appeal affirmed this interpretation of the law by giving credence to a PS claim under the BDR, deeming it to be a valid contract evidenced by the vessel seal and Master’s signature. The Fujairah Court of First Instance recently ruled in a similar manner. Notably in the Khorfakkan case, ING’s claim under the security instrument was rejected by virtue of OWB’s inability to demonstrate its claim over the trade receivables in the first place.  OWB failed at the first hurdle.  However, this decision is subject to appeal to the Court of Cassation and can merely be considered as guidance, not precedent.\r\n\r\nIn our view, the UAE Court’s application of legal theory is, probably, the most divergent from the actual contractual intentions of the parties involved.  The intentions of the parties to establish a third contract between the shipowner and PS by way of BDR is tenuous at best, at least from the shipowners’ perspective.  It is most likely the shipowner believed he was contacting with OWB only.\r\n\r\nOne key issue is that OWB conducted business as full traders and invoiced for the principal sum plus their profit element.  Had they invoiced for a brokerage or agency fee representing their actual mark-up only, then the community could probably have avoided this whole saga.\r\n\r\nLastly, it is noteworthy that most of the claims seen by the court follow from PS arrests whereby the principal sum only was claimed.  In these instances, for the reasons mentioned above, we believe the PS will usually succeed.  However, this does not mean OWB’s claim falls away, it simply means they will be able to claim, independently, for their mark-up only.   Had OWB brought the claims in the first place, perhaps the court would have ordered that the shipowner debtors make split payments accordingly.\r\n\r\n<em>Interpleader relief in the UAE</em>\r\n\r\nThere is no legal provision under UAE law for interpleader relief actions, as seen in Singapore and the Canadian cases above.  This means that shipowners who wish to pay their bunker invoices still have no way to pre-empt arrests and there have been few alternative solutions suggested.\r\n\r\nAlthough it is not possible for the shipowner to avoid arrest in the UAE, the shipowner who has had its vessel arrested can reduce legal expenses by joining the intermediary or PS to the proceedings.  At this stage, the shipowner can request the court to receive the debt amount into court and for the court to decide whether the intermediary or the PS is entitled to it.  The shipowner can then, in practice, reduce its involvement in the case by not attending hearings or making any submissions.  Whilst not an interpleader action, it is perhaps the next best way to compel the intermediary and the PS to litigate and resolve the competing claim.\r\n\r\n<strong>Is it ‘business as usual’ for the UAE bunkering community?</strong>\r\n\r\nYet again, we have observed that no company is too big to fail and the vulnerabilities hidden in long-standing industry practices can be exposed by the failing of one link in the contractual chain.  The market has offered up some potential solutions as outlined below.\r\n\r\nThe OWB saga emphasised the risks involved when ordering bunkers through intermediaries.  Loss prevention circulars have emerged from Protection &amp; Indemnity clubs recommending that shipowners deal directly with PS, thus eradicating any risk of double payment demands.  We consider it likely that shipowners with wider geographical trading limits may be slow to implement such changes because intermediaries often have access to markets that shipowners do not.\r\n\r\nAnother proposal is that shipowners should contract to split payments between the intermediary and PS and only to pay the mark-up and principal sum to the parties respectively.  It would follow that if the shipowner cannot make payment for bunkers, or the intermediary goes into liquidation, the intermediary can only sue in contract for the profit element and not the full sum thus avoiding any risk of paying the principal sum twice.  However, we believe this suggested solution only works legally and does not offer a commercial solution because the intermediary is unlikely to disclose its mark-up and agreeing to such a contractual arrangement would leave it at risk of being cut out of future transactions.\r\n\r\nFinally, one last proposal that has been mooted involves amending the payment provisions in the contracts requiring the intermediary to pay the PS, or the preceding intermediary, before payment becomes due from the shipowner.  In essence, the effect would be to provide the shipowner, as end buyer, the longest credit period and would ensure double payment demands would be avoided.  If there is a longer sale chain then transacting parties would contract on back-to-back terms.  As above, whilst this offers a workable legal solution, we do not consider that it is a commercial one.  The proposal involves the shifting of risk of non-payment away from the PS to the intermediary in the instance that the shipowner defaults on payment.  We do not envisage intermediaries accepting this transfer of risk.\r\n\r\nIn our view, intermediaries and PS could better align themselves in contract on their debt recovery strategies.  For example, parties could agree from the outset that in the event of non-payment, the PS will refrain from pursuing the debtor if the intermediary pursues the recovery on behalf of both entities, sharing the cost of such recovery with the PS.   This would avoid double payment demands upon the shipowner, would facilitate faster recovery and not disrupt the status quo.\r\n\r\nTo conclude, whilst there are some legal solutions on the table, few are commercially viable.\r\n\r\n<strong>Considerations for all</strong>\r\n\r\nThe OWB saga continues and the courts have grappled with the application of legal theory to a a complex commercial structure in courts around the world.  The decisions in England, Singapore, Canada and the UAE are indicative of the courts’ collective failure to produce a globally uniform solution to a global bankruptcy.  This failure is reflective of the intricate differences between the facts in each case and the legal theory applied in each jurisdiction.\r\n\r\nWhat is clear, is that a one-size-fits-all solution is unlikely to be forthcoming and by the nature of the international business of shipowners, their ships are likely to remain at risk of arrest and double payment demands for some time.\r\n\r\nSolutions have been proposed to improve industry practice in order to avoid a similar OWB situation from occurring again, however we have demonstrated how such suggested changes may be commercially inconvenient and improbable.   If intermediaries and PS could better align themselves in their approach to debt recovery then this would certainly represent progress.'),
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(98137, 5331, 'content', 'March 2016\r\n\r\n<hr />\r\n\r\nRecent reports from publicly listed UAE banks reflect that Dubai and the UAE are not immune from this reality with the disclosure of increased loss provisions. Where customers get into difficulty, a bank may need to protect its investment through enforcement action in local courts. Below is an overview of common issues that arise which may impede or delay the enforcement of the two most typical credit support instruments in the Dubai context: the property mortgage and personal guarantee.\r\n\r\n<strong>Property Mortgage </strong>\r\n\r\n<em>1. Enforcement Challenges  </em>\r\n\r\nThe Law Concerning Mortgages in Dubai (Law No. 14 of 2008) (the ‘Dubai Mortgage Law’) prescribes the content of a land mortgage. Without this key information, a mortgage is unlikely to be permitted to be registered by the Dubai Land Department. However, the Dubai Land Department officials are not responsible for ensuring the correctness of all information. If a mortgage deed does not provide for any information identifying the particular facility secured (i.e. it does not identify what the mortgage secures, or more correctly, the debtor’s obligations the mortgage secures), the customer may challenge the bank’s enforcement of the mortgage deed on the basis that:\r\n<ul>\r\n 	<li>the mortgage deed does not expressly refer to a certain facility, and therefore it does not secure the resulting liabilities. However, the bank can argue that all of the finance and security documents, taken as a whole, provide sufficient certainty as to the liabilities secured by the mortgage deed; and</li>\r\n 	<li>where applicable, the mortgage deed was provided to secure a previous facility and therefore the bank cannot enforce the mortgage deed to recover under the current facility. However, the bank’s argument could be that the mortgage deed was given to secure the facilities provided to the customer as a whole and not to limit the bank’s security under each facility.</li>\r\n 	<li>In respect of point (a), the Civil Transactions Law (Federal Law No. 5 of 1985) makes it clear that consideration for a pledge way of security must be an ascertained debt owed or promised, ascertained at the time of the pledge, or specific property which is guaranteed.</li>\r\n</ul>\r\n<em>2.   Enforcement Procedures in Dubai</em>\r\n\r\nThe Dubai Mortgage Law also outlines the procedures for enforcement of a loan secured by a mortgage over land, which are:\r\n<ul>\r\n 	<li>the Bank is required to notify the customer of the default in payment by serving a legal notice through the notary public requiring it to cure the default within thirty days; and</li>\r\n 	<li>in the event that the customer fails to pay in accordance with the notice served, the Bank may submit an application/petition to the execution department of the Dubai Courts seeking enforcement of the mortgage. This application/petition will include details of the loan provided to the customer, copies of the relevant documents and evidence of service of the default notice mentioned above. In accordance with the Dubai Mortgage Law, upon the failure of the customer to pay the overdue amount in response to the Bank’s notice, the execution judge may order an attachment against the mortgaged property so that it can be sold by public auction in accordance with the relevant execution procedures followed by the court.</li>\r\n</ul>\r\nTo obtain a judgment, in a simple case where no dispute is raised by the customer, at present takes approximately two to four months, excluding the public auction process.\r\n\r\n<em>3.  Dubai Mortgage</em>\r\n\r\nUnder the Law Concerning Real Property Registration in the Emirate of Dubai (Law No. 7 of 2006) (the ‘Title Registration Law’), every document creating, transferring or extinguishing property rights has no effect unless the document is registered with the Dubai Land Department.\r\n\r\nAccording to Article 4 of the Title Registration Law, UAE and other GCC nationals and companies wholly owned by such nationals have the right to own any property interest in the Emirate of Dubai, and to have such rights registered at the Dubai Land Department. All nationalities other than UAE or GCC nationals are granted the right to own a freehold interest or a long lease right in designated areas (as approved by the Ruler of Dubai). Article 26 of the Title Registration Law makes clear any disposal made in violation to the provisions of this law is null and void. Hence, any unregistered sale of land, including a purported sale to a non-UAE or non-GCC national outside of the designated areas, will not have protection of the law. As a corollary, a mortgage could not be granted by the purchaser were they to obtain finance for the acquisition (as the land would not be transferable).\r\n\r\n<strong>Personal Guarantee </strong>\r\n\r\n<em>1.  Specifying Guaranteed Obligations</em>\r\n\r\nUnder the Civil Transactions Law, a guarantee (either personal or corporate) is required to clearly state the guaranteed obligation(s). This is usually achieved by mentioning a certain amount of money or referring to a certain facility so the guarantor is aware of what is guaranteed. We have seen instances where the scope of the obligations being guaranteed is unclear in the documentation — this is fertile ground for a challenge to any enforcement of the guarantee by the guarantor.\r\n\r\nGuarantees for ‘all monies’ may not be enforceable in the UAE, as Article 1061 of the Civil Transactions Law requires that guarantees must be issued with respect to a specified debt or a thing certain in amount. ‘All monies’ guarantees are not usual practice but we have seen these in a small number of situations. While there have been judgments in the recent past where the UAE Courts have recognised and enforced all monies guarantees, the application of such judgments is limited and not binding for future situations.\r\n\r\nArticle 1061 of the Civil Transaction Law is extracted below:\r\n\r\n<em>“In order for the suretyship to be valid, the subject matter of the suretyship must be something for which the principal obligor is liable by way of debt or specific property ...”.</em>\r\n\r\n<em>In Dubai Court of Cassation appeal No. 79 of 2008 dated 16 June 2008, the Court reinforced the legal position where it stated:</em>\r\n\r\n‘The guarantee contract shall be void unless it: determines (fixes) the guaranteed amount (debt); or includes the basis on which the amount guaranteed should be calculated; or refers to the credit facility(s) granted to the debtor’.\r\n\r\nConsequently, there is a risk that a guarantee may be found to be unenforceable by the court if it does not refer to the facility or an amount, as it may be found to be uncertain. However, any such claim could be countered by documentary evidence showing that the guarantee secures or intended to secure the relevant facility by referring directly to the security documents listed in the facility itself.\r\n\r\n<em>2.  Time Limitation</em>\r\n\r\nThe general position under the Civil Transactions Law is that legal proceedings against a guarantor (either corporate or personal) must be initiated within a certain period stipulated by law from the date on which the debt falls due, unless otherwise agreed between the parties in the guarantee contract.\r\n\r\nThe Dubai Court of Cassation characterises a contract of guarantee, whether corporate or personal, as a civil activity concluded between ordinary persons and accordingly is subject to the six-month limitation period stipulated within Article 1092 of the Civil Transactions Law.\r\n\r\nThat Article provides that a demand or claim must be originated by the bank against the guarantor within six months from the date on which the debt fell due. Such demand or claim includes a letter, regardless of whether or not it is notarised, issued by the bank to the guarantor requesting repayment of the due outstanding amount.\r\n\r\nDubai Courts also clearly recognise that the limitation in Article 1092 of the Civil Transactions Law can be waived by the parties. For example in Dubai Court of Cassation appeal no. 6 of 2009 dated 24 May 2009 it was found:\r\n\r\n<em>“The guarantor is competent to terminate the guarantee contract, if the creditor did not claim the guarantor the guaranteed amount within six months starting from the date on which the debt is due, unless otherwise agreed between the parties in the guarantee contract”.</em>\r\n\r\n&nbsp;\r\n\r\n<strong>Conclusion</strong>\r\n\r\nWhile not being an exhaustive summary of every obstacle that could be faced by a lender in enforcing a land mortgage or guarantee, this article is illustrative of roadblocks that could be faced in the process. Not every obstacle will impede enforcement, and many issues have ready solutions that can be presented in argument at Court. However, obstacles and roadblocks serve to delay and lessen eventual recovery, sometimes significantly where appeals are required through multiple levels of Court. Ensuring that any uncertainty is avoided or resolved before entering into the enforcement process (which should ideally occur at origination) is the best approach.\r\n\r\n&nbsp;'),
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(98119, 5329, '_yoast_wpseo_metadesc', 'On 9 December 2015, Case No. 304/1993 - the longest-running construction case before the UAE courts - ended after more than 20 years. Al Tamimi & Company successfully defended the First Joined Defendant, a major international engineering and construction company.'),
(98120, 5330, 'content', 'March 2016\r\n\r\n<hr />\r\n\r\nHowever, the question is: will the employer be entitled to the said Delay Damages if the employer terminated the contract with the contractor? If the answer is no, is there any alternative way under the UAE law to assist the employer to claim compensation for the losses resulted from the contractor’s delay?\r\n\r\nIn a case in which Al Tamimi &amp; Company represented the contractor, the Abu Dhabi Court of Cassation held, in Appeal Case 424 &amp; 483 of 2015, that if the employer terminates the contractor before the completion of the works, the employer is not entitled to sue for the Delay Damages stated in the contract. However, the Cassation Court highlighted that the employer, in such circumstances, is entitled to prove and claim for any damage that may have resulted from the contractor’s delay (i.e. claim damages in tort).\r\n\r\n<strong>The facts of the case</strong>\r\n\r\nIn May 2008 a the parties entered into a construction contract based on the FIDIC 1999 (Red Book) to build a mall and a hotel. The project value was around AED 418 million, although it was subsequently amended to AED 355 million. The value of the work done by the contractor, including the additional works, was around AED 258 million. The project was delayed due for several reasons and the employer terminated the contract.\r\n\r\nFollowing the employer’s termination, the contractor filed a case before the Abu Dhabi Court of First Instance to claim unpaid fees.On the other hand, the employer filed a counterclaim, whereby the latter reserved his  right to claim compensation from the contractor due to the damage resulting from the contractor’s delay in the project The employer argued that the contractor’s case was premature. The Court appointed engineering experts to settle the final account between the contractor and the employer.\r\n\r\nThe experts concluded that the contractor was due payments of around AED 70 million. The experts further stated that the employer was entitled to Delay Damages under the contract of an amount of AED 41 million, and thus the net payment due to the contractor was around AED 29 million.\r\n\r\nThe Court of First Instance decided not to accept the contractor’s case, holding with the employer that the claim was premature and dismissed the counterclaim made by the employer.\r\n\r\n<strong>Court of Appeal</strong>\r\n\r\nThe contractor approached Al Tamimi &amp; Co to file an appeal before the Abu Dhabi Appeal Court.\r\n\r\nThe employer also filed an appeal for his counterclaim, claiming compensation from the contractor for damages resulting from the contractor’s delay in completing the project.\r\n\r\nThe Appeal Court appointed a different panel of engineering experts to settle the final account between the contractor and the employer.\r\n\r\nThe experts reached the conclusion that the contractor was due payments of around AED 27 million. However, one of the experts gave a dissenting opinion, concluding that the delay damages should not be deducted from the contractor and thus he recommended that the contractor be to AED 72 million.\r\n\r\nNevertheless, the Court of Appeal upheld the judgment issued by the Court of First Instance that the claim was premature.\r\n\r\n<strong>Court of Cassation</strong>\r\n\r\nThe contractor filed an appeal before the Court of Cassation, arguing again that the case was not premature. Although the Appeal judgment rejected the employer’s counterclaim, the employer did not challenge the judgment before the Cassation Court.\r\n\r\n<strong>As regards the employer’s claim for delay damages</strong>\r\n\r\nthe contractor argued that if the original obligation (i.e. the obligation to execute the project) is terminated, then the other obligations set out in the said contract, including the Delay Damages clause, are also terminated and cannot be applied anymore. Accordingly, the legal basis for claiming compensation, if any, can only be based on tortious liability. Therefore, the employer is not entitled to apply the Delay Damages clause,  having terminated the contract before the completion of the project’s works.\r\n\r\nThe Court of Cassation accepted the contractor’s appeal, and decided to return the case to the Appeal Court to review the dispute. The Appeal Court decided to return the case to the Court of First Instance, since the latter had decided before that the case was premature and so had not reviewed the merits. The contractor objected to this, and the Court of Cassation upheld the objection. In doing so, the Court of Cassation decided, among other things, that the employer is not entitled to apply the Delay Damages clause having terminated the contract before the completion of the project’s works. The Cassation Court further highlighted that the employer was only entitled in such circumstances to claim compensation from the contractor based on the actual damages resulting from the contractor’s delay based on tortious liability. The Court then concluded that, since the employer’s claim had been rejected by the Court of First Instance and the Court of Appeal with no challenge being made by the employee to these judgments, the employer was no longer entitled to claim compensation for the delay (whether based in contract or tort).\r\n\r\n<strong>The importance of the judgment</strong>\r\n\r\nThis Court of Cassation judgment confirmed, among other things, that clauses regarding Delay Damages cannot be invoked after the employer has terminated the contract if the termination took place before the completion of the project. In such circumstances, the employer’s claim for compensation for the contractor’s delay will only be based on tortious liability, whereby the employer will be obliged to prove the following:\r\n<ul>\r\n 	<li>The contractor was solely responsible for the project’s delay.</li>\r\n 	<li>The causal link between the delay and the damages suffered.</li>\r\n 	<li>The quantum of damage resulted from the project’s delay.</li>\r\n</ul>\r\nIt is therefore recommended that employers seek expert legal advice before terminating a contract to determine whether the termination will negatively affect any future claim for damages.'),
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(98101, 5329, 'content', 'March 2016\r\n\r\n<hr />\r\n\r\nAl Tamimi &amp; Company successfully defended   the First Joined Defendant, a major international engineering and construction company. The dispute was in connection with the construction of a sewage system in Abu Dhabi, which was completed in 1983 (‘the Project’). In the years following its completion, substantial defects were discovered in the sewage system. The case was very complex with lengthy facts, and this article will only briefly discuss the main aspects.\r\n\r\nIn 1993 the Plaintiff, a government body in the Emirate of Abu Dhabi, in its capacity as the Project employer, initiated legal proceedings in the Abu Dhabi Court of First Instance against the First Defendant, an international engineering consultancy firm (that acted as the Project’s consultant and engineer), and the Second Defendant, an insurance company. The Plaintiff claimed damages in the amount of approximately US$100,000,000 for the losses it sustained due to the allegedly defective design and supervision of the construction of the Project by the First Defendant (plus interest, loss of profit and all costs incurred by the Plaintiff).\r\n\r\nIn June 1996, the First and Second Defendants brought a subsidiary action against the First Joined Defendant (the main contractor in the construction of the Project) in the same case claiming damages equal to the amount that the First and Second Defendants would be ordered to pay to the Plaintiff should the Plaintiff succeed in its claim. Later the First and Second Defendants also brought subsidiary actions against three other contractors. In March 2001, the Court of First Instance joined the First Joined Defendant and the other contractors as co-defendants in the case following an interlocutory application that was submitted by the Plaintiff requesting that   the First Joined Defendant and the other contractors be made jointly and severally liable with the First and Second Defendants for the entire amount of the damages. As a result,    the First Joined Defendant was faced with a situation in which  it was required to defend two claims in parallel in the same case, one by the First and Second Defendants, and one by the Plaintiff.\r\n\r\nAn international engineering expert was appointed by the court (‘the Court Expert’) in 2001 to provide expert evidence in this case. The Court Expert submitted his report in November 2005 and all of the parties raised various objections with respect to the contents and findings in the Court Expert’s report. The Court Expert later submitted his final supplementary report in 2011, in which he concluded that the First Defendant should be liable for some of the losses sustained by the Plaintiff since the First Defendant was responsible for the design of the sewage pipes and the supervision of the Project works in its capacity as the consultant and engineer with the requisite expertise. The Court Expert also concluded that the  the First Joined Defendant should be partly liable as it was, among other things, responsible for the construction of the Project.\r\n\r\nEver since the claim was brought by the First and Second Defendants against the First Joined Defendant in June 1996,   the First Joined Defendant argued that the claim against it should not be heard and should be dismissed on the basis that the claim was time-barred under Article 883 of the UAE Civil Code. Article 883 provides that “no claim for compensation shall be heard after the expiration of three years from the collapse or the discovery of the defect”. The  First Joined Defendant argued that the Plaintiff and the First and Second Defendants discovered the last defects in the Project in 1991 but the subsidiary action against  the First Joined Defendant in connection with the defect did not commence until 1996, i.e. after the expiration of the 3-year limitation period imposed by Article 883. The    First Joined Defendant adopted also the same legal defence when it was joined to the case as a co-defendant in 2001 at the Plaintiff’s request.\r\n\r\nIn March 2013, the Court of First Instance issued its judgment in case No. 304/1993 with respect to the Plaintiff’s claim and the First and Second Defendant’s subsidiary actions. It dismissed both claims against  the First Joined Defendant on the basis that the  the First Joined Defendant was not joined in the case as a co-defendant until after three years had passed from the discovery of the defect in the Project and, therefore, the claim and the subsidiary action against    the First Joined Defendant was statute barred pursuant to Article 883 of the UAE Civil Code. In addition, the Court of First Instance ruled against the First Defendant and Second Defendant and awarded part of the claimed damages in favour of the Plaintiff. The judgment was then appealed to the Court of Appeal.\r\n\r\nOn 17 March 2015, the Court of Appeal issued its decision and upheld  the First Joined Defendant’s legal defense, affirmed the Court of First Instance’s ruling and rejected the appeals of the Plaintiff and the First and Second Defendants respectively.\r\n\r\nSubsequently, the Plaintiff and the First and Second Defendants each appealed the Court of Appeal’s judgment to the UAE Federal Supreme Court (the Court of Cassation) in Appeals No. 319/2015 and 320/2015.\r\n\r\nFinally, on 9 December 2015, the Court of Cassation issued its judgment in favour of    the First Joined Defendant and rejected both of the foregoing appeals. The following is an extract from the Court of Cassation’s judgment setting out its reasoning:\r\n\r\n“...the collapse in the works of both agreements occurred during the warrantee period and the First Appellant did not file its sub-claim during the three years prescription period (time-limitation), therefore, it shall not be heard. The appealed judgment contained a feasible reply substantiated by the facts established in the papers, especially the submitted expert’s report which contained a sufficient investigation of all disputed technical elements, the terms and amounts of the agreements, the damage resulting from the poor execution of the works, the amounts payable therefore and the responsible party. The judgment was based on valid evidence in relation to the plea raised by both the defendant parties. The reasoning of both the defendants’ appeals relate to the discretion of the Court of Merits [i.e. Court of First Instance] to understand the facts of the claim, assess evidences and documents, and assess the expert’s mission as well as the authority of the court to conclude elements of the contractual obligation to determine whether they are available or not, and to determine whether compensation for damage, if any, is due or not. All these arguments raised by the appellants in the second appeal relate to the judgment issued by the court of first instance, which is not a proper reason for appealing.”\r\n\r\nOverall, there are a few points arising from this case that are worth highlighting:\r\n<ul>\r\n 	<li>The time-bar principle in construction disputes should be considered at the beginning of the dispute and, when relevant, should be raised as a leading defence. With regards to construction-related disputes, the most important (but not the only) time-bar rules are found in Articles 880 and 883 of the UAE Civil Code. For a more detailed review of the foregoing time-bar rules, please refer to the article ‘Time Bars in Articles 880 and 883 of the UAE Civil Code (Regarding Construction Disputes)’, by J. Kudsi, Law Update Issue 269, May 2014, available on the Al Tamimi &amp; Company website.</li>\r\n 	<li>It is for the Court of Merits (i.e. the Court of First Instance) to understand the facts of the dispute, assess the evidence and documents and assess the Court Experts’ reports. The Court of Merits has the authority to ascertain the elements of the contractual obligation to determine whether they are available or not, and to determine whether compensation for damage, if any, is due or not.</li>\r\n 	<li>The main reason for the long delay in this case was due to the First and Second Defendants bringing subsidiary actions against many parties and the Plaintiff joining additional parties as co-defendants to the case at different times. There were a total of eight parties involved in this case. Moreover, there was a delay in finalizing the international Court Expert’s reports. The Court Expert, who was not based in the UAE, attended numerous meetings with the parties of the case and their legal and technical advisors, and interviewed many witnesses, and the reports produced by the Court Expert were subject to many discussions and debates.</li>\r\n 	<li>It is important that parties to a construction dispute instruct their own technical advisor to assist them because the court will appoint its own technical expert and will usually rely on his report when issuing the judgment. A party is better placed to assess and successfully object to the findings of the Court-appointed expert if it has its own expert on hand to offer expert advice.</li>\r\n</ul>'),
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(98026, 5324, 'content_description', 'Major step Towards a Free and Competitive Electricity Market in Egypt'),
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(98044, 5324, '_yoast_wpseo_metadesc', 'Egyptian Electricity Law, issued by law no. 87 for year 2015 last July, (the “Electricity law”) along with its executive regulation, which is expected to be issued before the end of the year, will represent the general legal framework for the electricity sector for decades to come.'),
(98045, 5325, 'content', 'February 2016\r\n\r\n<hr />\r\n\r\nFor the most part, insurance companies generally prefer arbitration over the traditional judicial system. However, some countries, such as Qatar, have statutes that purport to impose some restrictions on insurance companies in inserting arbitration clause in their policies. The principle adopted by the Qatari legislature is that any dispute should be resolved by the courts, and the arbitration is an exceptional way to resolve such disputes.\r\n\r\nA few years ago, a fire broke out in a mall in Doha owned by the claimant resulting in severe damages. The Claimant submitted a claim before the Qatari courts against the insurance company under the insurance policy for the losses suffered, noting that the dispute resolution clause in the insurance policy refers to arbitration and not to the Qatari courts.\r\n\r\nAt the first hearing before the Qatar Court of  First Instance, the defendant pleaded that the case should be dismissed and referred to arbitration, because the insurance policy contained an arbitration clause.  In this particular insurance policy the arbitration clause was only contained in the general terms of the policy.\r\n\r\nAccordingly, the claimant argued that the arbitration clause was not valid, since it should have been included in the specific terms of the insurance policy. Having the arbitration clause in the general terms did not suffice, and therefore the Qatari court should have had jurisdiction regarding this dispute.\r\n\r\nThe claimant cited Articles 775, 801 and 107 of the Qatari Civil Procedure Code in its submissions. Article 775 of the Civil Procedure Code applies to insurance policies and provides that: “it shall not be permissible to challenge the insured neither with the conditions relating to nullity or loss of right unless it was clearly presented, nor the arbitration clause unless it was made in a special agreement independent of the general conditions.”\r\n\r\nHowever, the court of first instance did not accept the claimant’s argument, and held that, even if the arbitration clause was not separately presented in the general insurance policy and, was nevertheless included in the general conditions of the policy, the arbitration clause was still enforceable. Therefore the court of first instance dismissed the case on the basis that the insurance policy included an arbitration clause, notwithstanding that it was set out in the general conditions of the policy.\r\n\r\nThe claimant filed an appeal before the Qatari court of appeal based primarily on Articles 775, 801 and 107 of the Qatari Civil Code, in conjunction with other supporting references from the doctrine and jurisprudences. Respected civil law jurists, such as Sanhouri, are of the view that an arbitration clause in an insurance policy should be set out in the policy in such a way as to obtain special attention from the insured/beneficiary, so as to ensure that the insured/beneficiary is aware of the inclusion of the arbitration clause and therefore such clause should be separated from the insurance policy.\r\n\r\nThe court of appeal rendered a judgment in favour of the claimant and held that the arbitration clause should be contained separately in the insurance policy in order to be enforceable. The arbitration clause has an autonomous nature, and must be clearly apparent and the arbitration clause must be separate from the insurance policy.\r\n\r\nTherefore, if insurance companies want to ensure that an arbitration clause in an insurance policy is enforceable in Qatar, then based on this recent court of appeal judgment it would appear that the most prudent course of action would be for insurance companies to arrange for the insured/beneficiary to sign a separate arbitration agreement alongside the insurance policy; or at least place the arbitration clause as an independent annex to the insurance policy. Otherwise an insurance company runs the risk that the Qatari courts will state that the arbitration clause is not enforceable and will not be valid under Qatari law.\r\n\r\n&nbsp;'),
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(98022, 5324, 'content', 'February 2016\r\n\r\n<hr />\r\n\r\nEgyptian Electricity Law, issued by law no. 87 for year 2015 last July, (the “Electricity law”) along with its executive regulation, which is expected to be issued before the end of the year, will represent the general legal framework for the electricity sector for decades to come. The Electricity Law, a long awaited reform, paved the way to move from a state monopoly into a free market for electricity.\r\n\r\nThe law provided for open market for electricity generation and distribution, while maintaining transmission under state control through the ownership and monopoly of the national electricity transmission grid through the Egyptian Electricity Transmission Company (“EETC”).\r\n\r\nA key ingredient of a free and fair electricity market is independent and neutral transmission network operator, which is essential to avoid conflict of interest between the owner/operator of the network and users of the network, in addition to ensuring  impartial treatment of all players, producers and/or distributors. Hence, the Electricity Law mandated that EETC shall be restructured to become a Transmission System Operator independent from all of the electricity sector related parties within three years. The Ministry of Electricity and Energy has taken steps to achieve this in collaboration with the World Bank.\r\n\r\nThe second pillar of a competitive electricity market is the regulator. The Egyptian Electric Utility and Consumer Protection Regulatory Agency (“EgyptERA”) was founded in the year 2000 by virtue of a presidential decree and has been carrying the regulator rule since that date. Under the Electricity Law EgyptERA has been reorganised as an independent government agency established by law empowered with the necessary powers to regulate, supervise, and develop all aspects of electricity from generation to consumption, through transmission and distribution of electricity. Under the Electricity Law EgyptERA is responsible of ensuring the availability, quality, and stability of electric power supply at suitable prices.\r\n\r\nBig part of EgyptERA’s role is promoting investment and free competition in the electricity sector. To that end, EgyptERA is entrusted with issuing rules and adopting policies that will achieve this goals and empowered to take actions against any market player who is involved in any anti-competitive behaviour.\r\n\r\nIn order for the competitive electricity market to function properly, there must be sufficient, if not surplus, of supply of electric power. In recent years, Egypt has witnessed record shortages of electric power. However, the Ministry of Electricity has adopted an emergency programme for the maintenance and renovation of existing power stations as well as building new stations with an aggressive plan of adding a total of 18,000 megawatts of installed capacity by year 2018 from conventional sources. In parallel, the New and Renewable Energy Authority embarked an ambitious renewable energy programme aiming to generate 20% of electricity from renewable sources by 2020. Under this programme, a Feed-in Tariffs scheme has been introduced by law 203/2014, and round-one of developers has been selected with a total capacity of 4300 megawatts expected to come into service by 2017. In addition to 950 megawatts wind and solar BOO projects that are currently being tendered at different stages.\r\n\r\nBottom line, while there is still a long way to transform electricity sector into a functioning free and competitive market, there some positives to be taken. Egypt has initiated the transformation with a fundamentally sound legal framework and is taking the steps toward restructuring the electricity state-owned enterprises, building capacity of concerned authorities and taking steps to secure reliable and steady supply of electricity.\r\n\r\nA version of this article first appeared in the December 2015 edition of IFLR Magazine International Briefing Egypt.\r\n\r\n&nbsp;'),
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(84149, 4589, 'content_description', 'INTRODUCTION: Al Tamimi & Company has published articles separately about extradition and bounced cheques.  '),
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(97982, 5322, 'pageSummary', 'The regulation of financial services in GCC countries takes different forms. Alone within the GCC Bahrain has opted for the unitary approach.'),
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(97965, 5321, 'content_description', 'The perils of failing to discharge an execution judgment issued by the UAE Labour Court\r\n'),
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(97967, 5321, 'pageSummary', 'The perils of failing to discharge an execution judgment issued by the UAE Labour Court'),
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(97975, 5321, '_yoast_wpseo_metadesc', 'The perils of failing to discharge an execution judgment issued by the UAE Labour Court.'),
(97976, 5322, 'content', 'February 2016\r\n\r\n<hr />\r\n\r\nOne body, in the form of the Central Bank of Bahrain (CBB), regulates both the conduct of financial services business in (or from within) Bahrain as well as the financial institutions that provide those services.\r\n\r\nThe CBB argues that this approach creates a consistent and coherent regulatory model that can be applied across the board and it also provides a straightforward and efficient regulatory framework for financial services firms operating in Bahrain.\r\n\r\nHowever as the following summaries demonstrate, different regulatory approaches are possible. Often - leaving to one side the regulation of international financial centres -- the regulation of capital markets is undertaken by a separate body on the grounds that the ongoing supervision of capital markets is generally distinct from the regulation of financial services. Indeed it could be argued that the CBB tacitly acknowledges this by virtue of the fact that the supervision of Bahrain’s capital markets is undertaken by a dedicated unit within the CBB, namely the Capital Markets Supervision Directorate. Viewed in this light, one perfectly feasible conclusion is that the Bahrain’s unitary approach is, in reality, not so different for the multi-agency approach taken by the other GCC countries.\r\n\r\n<strong>Qatar</strong>\r\n\r\n<strong>The financial regulators in Qatar, outside the Qatar Financial Centre (QFC), are mainly the Qatar Central Bank (QCB) and the Qatar Financial Markets Authority (QFMA) as the onshore regulators and the Qatar Financial Centre Regulatory Authority (QFCRA) in respect of the QFC, a separate financial free zone located in Qatar with its own civil and commercial laws and court system with no geographical boundaries. </strong>\r\n\r\nThe QCB is the primary regulator of financial institutions operating in Qatar, and the QCB Law No 13 of 2012 expanded the QCB’s supervisory powers to cover the QFC financial institutions. Presently there is no practical impact of the expansion of the QCB powers on the QFC financial institutions and the QFC banks remain subject to the supervision of the QFCRA.\r\n\r\nThe Qatar Central Securities Depository (QCSD) was established by the QCB and Qatar Exchange (QE). The QCSD has assumed the duties relating to central clearing, depository and registry activities which were previously undertaken by the QE. The QCSD also provides related services, including registration, acceptance and transfer of government bonds and treasury bills (T-bills). The QCSD offers additional services including DvP, securities lending and borrowing settlement, management and follow-up of limits placed on non-Qatari shareholders, registration and authorisation of exchange-traded funds as well as services in connection with initial public offerings.\r\n\r\nQatar has executed an InterGovernmental Agreement (IGA) with the United States in relation to compliance with the US Foreign Account Tax Compliance Act (FATCA). The QFC was first set up to offer domestic and international firms the opportunity to establish and provide a broad range of financial services related to banking, asset management and insurance businesses. In addition to its financial regulated activities QFC has expanded the scope of its permitted activities to include non-regulated activities that are not “financial services” in nature. The QFC offers its own legal, regulatory, tax and business infrastructure which allows 100 percent foreign ownership, unlimited repatriation of profits and charges a competitive rate of 10 percent corporate tax on locally-sourced profits. Since the QFC is not a separate geographical zone all entities in the QFC operate on a fully-onshore basis with the availability to access the local market and operate from over 50 locations all over Doha with no restrictions on the currency they can trade in.\r\n\r\nRecently Qatar has issued strategic legislation in response to the speed of development in the economy and business. This includes the new Qatar Central Bank Law, the QFMA Law, the Real Estate Development Law and, the most recent, new Companies Law.\r\n\r\n<strong>Kingdom of Saudi Arabia</strong>\r\n\r\n<strong>Financial regulation in the Kingdom of Saudi Arabia (KSA) is primarily carried out by the Saudi Arabian Monetary Agency (SAMA - the Central Bank of KSA) and the Capital Market Authority (CMA). </strong>\r\n\r\nSAMA is the regulatory authority for activities involving the banking and insurance industries while the CMA regulates licensed securities businesses (investment banks).\r\n\r\nAs well as dealing with the banking affairs of the KSA Government, SAMA performs a variety of important functions pursuant to a number of KSA laws and regulations. SAMA is tasked with promoting the growth of the financial system and ensuring its soundness and has a supervisory role over: commercial banks and money exchange dealers; co-operative insurance companies and other professions relating to the insurance sector; finance companies; and credit information companies.As a supplement to laws and regulations, SAMA issues industry circulars from time to time to KSA-licensed banks and insurance companies. These circulars act as formal directives that must be followed and the compliance department of SAMA is very active in reviewing operations of licensed institutions in KSA to ensure consistency and compliance with laws and directives.\r\n\r\nMany of the industry standards promoted by SAMA follow international trends, so SAMA will continue to be very proactive in implementing policies and procedures to address matters such as the eradication of illegal financial transactions – particularly money laundering and terrorism financing.\r\n\r\nImportantly, in 2004 SAMA also began supervising KSA’s only licensed credit bureau known as SIMAH, offering consumer and commercial credit information services to KSA members. In order to access credit information of potential clients (individual or corporate), the requesting entity must be a registered member of SIMAH.\r\n\r\nInvestment banks in KSA are licensed securities businesses (called Authorised Persons) and they may hold one or more of the following five security business licenses issued by the CMA: Arranging; Advising; Managing; Dealing; and/or Custody.\r\n\r\nThe CMA’s primary functions are to regulate and develop the KSA’s capital market by issuing rules and regulations for implementing the provisions of the Capital Market Law. The basic objectives are to create an appropriate investment environment, boost confidence and reinforce transparency and disclosure standards in all listed companies and, moreover, to protect the investors and dealers from illegal acts in the market.\r\n\r\nIn a similar manner to SAMA, the CMA also issues industry circulars from time to time to KS- licensed security businesses. These circulars act as formal directives that must be followed and the compliance department of the CMA is very active in reviewing operations of licensed security businesses in KSA to ensure consistency and compliance with laws and directives.\r\n\r\nAs well as dealing in securities, investment banks are able to manage real estate investment funds and offer financial investment advisory services to clients.\r\n\r\nIn recent years the CMA has introduced initiatives relating to the KSA stock market (Tadawul) in an effort to allow foreign investment in KSA-listed equities. For example, in 2008 equity swaps were made available and in June 2015 the CMA rules that allowed qualified foreign investors to invest directly in Tadawul came into force.\r\n\r\n<strong>United Arab Emirates</strong>\r\n\r\n<strong>The regulatory landscape in the United Arab Emirates (UAE) consists of three principal bodies: the UAE Central Bank (Central Bank) and the Securities and Commodities Authority (SCA) as the onshore regulators and the Dubai International Financial Services Authority (DFSA) in respect of the Dubai International Financial Centre (DIFC), a separate financial free zone located in Dubai with its own civil and commercial laws and court system. The list of regulators will soon be expanded to include the Financial Services Regulatory Authority as regulator for the Abu Dhabi Global Market, a recently-launched financial free zone located in Abu Dhabi similar to the DIFC.</strong>\r\n\r\nThe Central Bank has devolved the securities and markets regulation to SCA as part of the UAE’s efforts to develop a more sophisticated regulatory framework. The Central Bank now oversees banking and financial business. The SCA’s oversight, which was once limited to publicly-listed companies and the two securities exchanges, now also oversees custody, securities brokerage, funds, financial consultancy, research, and since 2015 investment management activities. Both the Central Bank and the SCA have been active in reviewing, amending and implementing changes to their respective regulations.\r\n\r\nThe enactment of the new federal Anti Money-Laundering law, brings the UAE’s position in line with international standards and expands the regulatory and enforcement powers of the Central Bank to impose administrative sanctions and restrict the powers of senior management. The UAE has also agreed with the United States to adopt Model 1B of the InterGovernmental Agreement (IGA) in relation to compliance with the US Foreign Account Tax Compliance Act (FATCA).\r\n\r\nHaving operated now for over 10 years and established critical mass, there have been recent and ongoing amendments to the DFSA’s regulatory regime as the DIFC matures as a jurisdiction and also partly in response to market demand (such as the introduction of qualified investor funds and other amendments). The DFSA has also increasingly been proactive with enforcement actions including the imposition of hefty fines.\r\n\r\nHe was assisted in compiling this article by his colleagues: Sarah El Serafy, Senior Associate Qatar; Ahmed Al Barwani, Head of Office, Oman; Omar Handoush, Senior Associate, Kuwait; Glenn Lovell, Partner, KSA; and Jody Glenn Waugh, Partner, UAE\r\n\r\nA version of this article first appeared in the Autumn 2015 edition of The Bahrain Banker Magazine.\r\n\r\n&nbsp;'),
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(97961, 5321, 'content', 'February 2016\r\n\r\n<hr />\r\n\r\nIn recent years, labour disputes have become somewhat similar to televised court room dramas - highly charged and acrimonious given they often arise out of a breakdown in a previously working relationship. Emotions run high and professionalism is often lost in a war of words before the courts.\r\n\r\nThe UAE Labour Courts follow the same process as other claims filed with the UAE courts, in that there are three stages: Court of First Instance, Court of Appeal and Court of Cassation/Supreme Court.  Once a UAE Labour Court of Appeal issues its judgment and in the event that it is awarding an amount to the employee, that judgment may be enforced/ executed immediately notwithstanding that parties may further appeal the judgment before the Court of Cassation.\r\n\r\nIn order to enforce/execute the judgment an employee must approach the Execution Court and apply for the enforcement of the judgment.  The Execution Court will then serve notice on the employer seeking payment within 15 days from the date of the service of the notice. Historically, it was common practice for an employer to file objections and grievances to unnecessarily delay the payment since this would only be due once those applications had been considered by the courts.\r\n\r\nAs a means to secure the judgment debt the Execution Court has the power to impose certain measures. These include attachment orders on bank accounts, shares, stocks and bonds as well as on any real or tangible assets that the employer may have in the UAE. However, all of the above measures may take many months to finally conclude.\r\n\r\nIn a bid to address this reluctance to satisfy judgments and ensure a speedy resolution of the issues, the Ministry of Labour (‘Ministry”) has introduced added sanctions for any UAE entity failing to discharge a judgment debt within the 15 day deadline.\r\n\r\nMinisterial Resolution No 797 of 2014 (‘the Resolution”), which has been in effect since 1 October 2014, empowers the Ministry to suspend the business license of an entity for non co-operation or payment of a judgment issued by the Labour Courts. Furthermore, it may also order the issuance of an arrest warrant for the General Manager named on the employer’s license and the imposition of a travel ban. Moreover, the Resolution can also have a wider application by not only sanctioning the employer but also to a wider group of associated entities. Individual owners and partners of the defaulting entity may find that other entities, of which they hold a vested interest, are also subject to the Resolution’s sanction. The Ministry has announced that an employer must be given two advanced warnings of the proposed suspension, although the method or manner of communication is not clear or routinely followed. The newly imposed sanction will remain in effect until the Execution Court has received payment of the judgment in full (inclusive of accrued interest, court fees, etc) and requested the Ministry to raise the suspension.\r\n\r\nIncreasingly more and more disgruntled employees are taking advantage of the Resolution and are quick to approach the Execution Court to seek enforcement of a judgment closely followed by an urgent application to freeze the employer’s licence. The Execution Court does not hesitate to suspend the business license of a non compliant employer and we are noting that these suspensions are quickly becoming the norm and may be applied even without the requisite two advanced warnings.\r\n\r\nIn the event an employer fails to satisfy the judgment irrespective of a restriction having been placed on its business license, the Execution Court will proceed to issue an arrest warrant for the General Manager on the employer’s licence. Once arrested, the General Manager remains in custody until such time as the judgment and all associated costs have been satisfied in full and the Execution Court issues a clearance certificate confirming that all amounts due have been fully paid.\r\n\r\nThe procedure to remove the suspension and the arrest warrant is proving to be fairly arduous, time consuming and costly with varying applications necessary to ensure they are lifted correctly.\r\n\r\n<strong>Free Zone Entities </strong>\r\n\r\nAlthough free zone entities are governed by the relevant free zone authority and do not necessarily fall under the remit of the Ministry, they do not have explicit immunity from other UAE government departments. Therefore, there is a risk that the Resolution will empower the Ministry to extend its application to any related entity of the defaulting party irrespective of whether it is based onshore or within a free zone.\r\n\r\n<strong>Conclusion</strong>\r\n\r\nIn addition to the threat of an attachment order and a visit from Court Bailiffs, this new Resolution highlights, to all UAE entities and employers, the importance of prompt payment of judgments within the 15 day deadline from date of notification to ensure business operations are not brought to a sudden halt.'),
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(97894, 5318, 'content', 'February 2016\r\n\r\n<hr />\r\n\r\nWhen it comes to identifying trademarks, there a number of categories to consider. Often, trademarks fall within one of the below categories, fanciful and arbitrary marks being the strongest, suggestive trademarks falling somewhere in the middle, descriptive trademarks being weaker but sometimes protectable, and generic trademarks being unprotectable under the trademark law.\r\n\r\n<strong>Fanciful trademarks </strong>\r\n\r\nA fanciful trademark is made-up, invented for the sole purpose of functioning as a trademark; it can also be referred to a coined term.  Words in such marks are entirely invented and do not refer to anything else. By way of example, a trademark such as Kodak is a good example of a fanciful trademark.\r\n\r\n<strong>Arbitrary Trademarks</strong>\r\n\r\nArbitrary trademarks are words that have a common meaning and are part of everyday language, but the meaning of the words is unrelated to the goods or services offered for sale under the mark. By way of example, the word Apple is common and part of everyday language, clearly describing a fruit in the literal sense; however the word Apple used in connection with computers and communication devices, renders the trademark as an arbitrary one.\r\n\r\n<strong>Suggestive Trademarks </strong>\r\n\r\nSuggestive marks are marks that suggest a quality or characteristic of the goods and services. Despite the fact that suggestive marks are not as strong as fanciful or arbitrary marks, suggestive marks are common due to the fact that, in the mind of consumers, they create a link to a product/services. Suggestive marks are often difficult to distinguish from descriptive marks (described below), since both are intended to refer to the goods and services in question. Suggestive trademarks require some imagination, in that they require a subtle leap in thought and perception, thereby allowing the consumer to reach a conclusion as to the exact nature of the goods/services. An example of a suggestive trademark would be the word Penguin as a brand for refrigerators, or Microsoft which is suggestive of software for microcomputers.\r\n\r\n<strong>Descriptive Trademarks</strong>\r\n\r\nDescriptive trademarks are words that merely describe some portion of the goods or services to be sold under the trademark. Through Court precedents, it has been established that trademarks that simply describe the ingredients, shapes, qualities or characteristics of the goods/services, are identified as descriptive trademarks.  As a rule of thumb, descriptive marks are not inherently distinctive and therefore cannot be protected because they use every day words to describe products and services. By way of example a trader in the business of operating a pizza restaurant, cannot register a trademark called “PIZAZZZ” since it is merely descriptive of the intended goods/services.\r\n\r\nHowever, some trademarks, although being identified as descriptive, can nevertheless be considered as trademark and therefore protectable. In order for a descriptive trademark to be protectable it is required to establish that it has acquired a secondary meaning. Secondary meaning indicates that although the mark is on its face descriptive of the goods or services, consumers recognise the mark as having a source-indicating function. The threshold of recognising a secondary meaning requires that the brand owner establishes widespread, long term and exclusive use. The acquisition of secondary meaning is often proven through the use of consumer surveys that show that consumers recognise the mark as a brand.\r\n\r\n<strong>Generic Trademarks </strong>\r\n\r\nGeneric trademarks are identified as the actual names of the goods/services and therefore are incapable of functioning as a trademark. Unlike descriptive marks, generic trademarks will not be recognized as trademarks even with longstanding and exclusive use, as generic trademarks are considered as part of the public domain and therefore one trader cannot claim exclusivity on such common terms.  As such, the rationale for creating the category of generic marks is that no manufacturer or service provider should be given the exclusive right to use words that generically identify the product/services. By way of example, a trader operating a hair salon cannot seek protection over the name “Hair Salon”.\r\n\r\nIn addition, a valid trademark can become generic over the years if the consuming public misuses the mark sufficiently for the mark to become the generic name for the product. Examples of trademarks that have become generic names for products are Klennex, Aspirin and Jacuzzi.\r\n\r\nTrademarks are an important asset, serving to distinguish a business’ products and services from those of other trademarks. Given the potential value of trademarks to almost any business and the cost of building brand awareness in the marketplace, the selection of an enforceable trademark is crucial.'),
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(97916, 5318, '_yoast_wpseo_metadesc', 'When it comes to developing a brand, whether it is a new business or an existing business looking to roll out new products, service names or slogans, the underlying challenge of selecting a trademark that is both legally protectable and marketable remains.'),
(97917, 5319, 'content', 'February 2016\r\n\r\n<hr />\r\n\r\nThis article discusses the new requirements for licensing as a developer in Abu Dhabi, including the conditions, procedures, deadlines and penalties set out by the Law and its implementing regulations.\r\n\r\n<strong>Deadline </strong>\r\n\r\nDevelopers operating in Abu Dhabi must apply for a licence and register on the Real Estate Development Register at the relevant Municipality no later than 31 March 2016.\r\n\r\n<strong>Penalties</strong>\r\n\r\nThe Law provides that no person may engage in real estate development in Abu Dhabi unless they have been registered in the Real Estate Development Register and licensed as either a master developer or a sub-developer. Developers who fail to apply for a licence and register by 31 March 2016 risk penalties of between AED 100,000 and AED 2,000,000. In addition, the Law provides that developers who are not licensed and registered will not be entitled to any fees, profits or rewards in return for the activities they undertake. If any fees, profits or rewards are received by a developer that is not licensed and registered, those fees, profits or rewards must be returned to the purchaser or, if it is not possible to return them, the developer must suitably compensate the purchaser.\r\n\r\n<strong>Licensing requirements</strong>\r\n\r\nThe registration of developers in the Emirate of Abu Dubai is regulated by the Department of Municipal Affairs (“DMA”). Only companies with real estate development activities permitted by their trade licence and registered with Abu Dhabi Chamber of Commerce and Industry may apply to the DMA for a licence to be recognised as a developer in Abu Dhabi.\r\n\r\nThe following documents must be submitted to the relevant municipality in the Emirate in order to apply to be registered as a developer:\r\n<ul>\r\n 	<li>the prescribed application form</li>\r\n 	<li>the developer’s trade licence or initial approval from the Department of Economic Development for licensing to carry out real estate development projects</li>\r\n 	<li>Abu Dubai Chamber of Commerce and Industry membership certificate</li>\r\n 	<li>directors or board of directors list</li>\r\n 	<li>copy of the developer’s headquarters offices rental agreement or title deed</li>\r\n 	<li>audited financial report</li>\r\n 	<li>details of the developer’s real estate development projects, whether existing or proposed</li>\r\n 	<li>master plans and construction designs of the projects</li>\r\n 	<li>atitle deed of the lands to be developed</li>\r\n 	<li>a project feasibility study issued by an auditor approved by the DMA</li>\r\n 	<li>for master developers, the sale and purchase agreements with their sub-developers</li>\r\n 	<li>for sub-developers, the unit sale and purchase agreement template for each project if the unit sales are made directly by the sub-developer</li>\r\n 	<li>any project marketing agreement with real estate brokers</li>\r\n 	<li>any other documents and information that may be required by the DMA.</li>\r\n</ul>\r\nA licensed developer may open one or more branch offices, in addition to its head office, to carry out any of its licensed activities provided it gives prior notification to the DMA. A developer’s licence will be valid for one year from the date of issue and must be renewed annually.\r\n\r\n<strong>Conclusion</strong>\r\n\r\nAs it could take some time for developers to comply with the requirements for obtaining a licence and registering on the Real Estate Development Register, developers need to act quickly to avoid incurring a penalty after 31 March 2016.'),
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(97867, 5317, 'content', 'February 2016\r\n\r\n<hr />\r\n\r\nIn the present article we will discuss the key elements of the unified GCC trademark law (the “Trademark Law”) and the prospect of it being adopted throughout the GCC.\r\n\r\nIn a nutshell the main focus of the Trademark Law is to create uniformity between the local trademark laws of each of the GCC member states namely, Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates. Whilst the adoption of the Trademark Law will result in a more unified set of regulations for GCC trademark protection, it is important to point out that the Trademark Law will not provide a unified filing system. As such, right holders will still be required to file separately in each applicable GCC country in order to ensure protection and enforcement rights. We explore matters in further detail below.\r\n\r\n<strong>Background </strong>\r\n\r\nThe Trademark Law was initially submitted by the GCC General Secretariat and approved by the GCC Trade Cooperation Committee in 1987. However, the GCC member states have to date only used the law for consultative purposes and there has been no direct application of the law in any of the member states. In 2006 and 2013, further amendments to the Trademark Law were approved by the GCC Supreme Council before being published in the GCC Official Gazette.\r\n\r\nAlthough the Trademark Law has been enacted as law from a GCC perspective, in order for it to be applicable within each GCC member state, the law needs to be (i) approved locally in each sovereign state by a decree or a law, (ii) published in the local official gazette of each member state to become effective, usually after six months from the date of issuance of the implementing regulations.\r\n\r\nTo date the following member states have taken the below actions:\r\n<ul>\r\n 	<li><strong>Saudi Arabia </strong>- Decree No. M/51 dated 26 April 2014 approved the Saudi Council of Ministers decision No. 306 of the same date and the Trademark Law is to be published within 30 days from the date of issuance of the Implementing regulation and will come into force after 90 days of its publication in the official Gazette.</li>\r\n 	<li><strong>Qatar </strong>- Decree No. 7 of 2014 approved the Trademark Law which was published in June 30, 2014.</li>\r\n 	<li><strong>Bahrain</strong> - Decision No. 6 of 2014 approved the Trademark Law which was published in the official Gazette No. 3145 dated February 27, 2014.</li>\r\n 	<li><strong>Kuwait </strong>-  Law No. 13 of 2015 was issued and published in official Gazette No. 1228 dated March 22, 2015</li>\r\n 	<li><strong>Oman/UAE</strong> - At present, neither country have published any legislation with regard to the Trademark Law.  It therefore remains to be seen how or when the Trademark Law will be implemented in each of these member states.</li>\r\n</ul>\r\n<strong>Key Features of the Trademark Law</strong>\r\n\r\n<strong>Trademark Definition and Multi Class Applications </strong>\r\n\r\nIn order to maintain pace with the introduction of new technology which allows right holders to identify their brands through other means than those identified as conventional trademarks, the Trademark Law has broadened its definition of trademarks to include items such as ‘sounds’ and ‘smells’.\r\n\r\nAlthough in some GCC member states such as the UAE, certain unconventional trademarks such as ‘sounds’ can already be registered this is not the case in some other GCC countries such as Saudi Arabia.  Accordingly, the Trademark Law provides right holders with an opportunity to protect their trademarks in a more unified way, and they will no longer face the challenges of differing trademark laws and varying protection awarded to such rights.\r\n\r\nFurthermore, under the Trademark Law, multiclass trademark applications will be allowed. This change of practice is a significant departure from the present practice as it is currently only possible to file applications covering a single class in each of the GCC member states. None of the GCC member states allow for multi-class applications to be filed under their current regional trademark laws.\r\n\r\n<strong>Priority Claims</strong>\r\n\r\nIn another significant change, the Trademark Law (Article 11) provides that an applicant who has applied for a trademark in a country that is a signatory to a multinational treaty to which a GCC state is a party may claim priority within six months of the date of filing the earlier corresponding application.\r\n\r\nIn order to make a valid priority claim, the application must be accompanied by a copy of the earlier application and a statement setting out the filing date, application number and country.\r\n\r\n<strong>‘Famous’ Trademarks </strong>\r\n\r\nIn line with the GCC member states’ obligations under the Paris Convention and the Trade Related Aspects of the Intellectual Property Rights (TRIPS), well known/famous trademarks are protectable in each of the GCC member states.\r\n\r\nThrough the Trademarks Law, famous trademarks are provided a greater ambit of protection. The Trademarks Law prohibits the registration of such marks which constitute a reproduction, imitation or translation of well known marks.  It  also prohibits the registration of a mark with relation to dissimilar goods, whereby consumers may be lead to believe that the goods emanate from the same trader, and which would likely the damage the famous trademark owner’s interests.\r\n\r\nIn addition to broadening the ambit of protection for right holders of famous trademarks, the law also provides clear criteria as to the determination of famous trademarks. To date, the determination of whether a trademark is considered famous or not, is left to each state’s Courts and is reviewed on a case by case basis. This is not an exact science and trademark practitioners often have to refer to previous case laws to identify the factors considered by the Courts in recognizing the “famous” stature of trademarks.  Under the Trademark Law, conditions for a mark to be declared as a well known mark have been clearly stipulated and can be summarized as the following:\r\n<ul>\r\n 	<li>Extent of recognition by consumers resulting from the marketing efforts of the trademark owner;</li>\r\n 	<li>The duration and extent of the registration and use of the mark; and</li>\r\n 	<li>The number of countries where the trademark has been registered or recognized as a well-known mark.<strong> </strong></li>\r\n</ul>\r\n<strong>Trademark Infringement</strong>\r\n\r\nThe GCC member states have well implemented provisions to deal with trademark infringers. Similarly, the Trademark Law addresses the infringement of both registered and unregistered trademarks.  Article 42 of the Trademark Law sets out the maximum penalties available for trademark infringement:\r\n<ul>\r\n 	<li>a fine of between SAR5,000  (approx.  $1,300) and SAR1 million (approx. $260,000) and/or imprisonment for between one month and three years where a person counterfeits a registered trademark in a manner which misleads the public and affixes this mark to its products; and</li>\r\n 	<li>a fine of between SAR1,000 (approx. $260) and SAR100,000 (approximately $26,000) and/or imprisonment for between one month and one year where a person knowingly sells goods which contains a counterfeit or unlawfully affixed trademark.</li>\r\n</ul>\r\nIn cases of repeat offenders, the penalty may not exceed double the maximum limits specified for the offence. In addition, the establishment may be closed for between fifteen days and six months.\r\n\r\nThe potential sanctions under the Trademark Law and particularly the  monetary penalties are a significant increase as compared to the present sanctions available in the individual GCC member states. One explanation for the increase in penalties is that the GCC member states have collectively set such amounts for a deterrent affect so as to curb infringement and counterfeiting activity. By way of example in the UAE, Articles 37 and 38 of the Federal Law No. 37 of 1992 on Trademarks (as amended by Law No. 19 of 2000 and Law No. 8 of 2002) (the “UAE Trademark Law”) provide penalties including imprisonment limited to one year and monetary penalties of AED5,000 (approx. $1360) and not exceeding AED10,000 (approx.$2,722). In comparison the current penalties under the UAE Trademark Law are significantly less than those sanctions set out by the Trademark Law. <strong>Official fees in the GCC - Trademark Offices</strong>\r\n\r\nAlthough the GCC has no unified trademark filing system; Article 50 of the Trademark Law states that implementing regulations shall be put in place to set out the applicable filing charges. To date, the implementing regulations have not yet been released.  Within the GCC there has been considerable increases in the official filing fees within the past year notably within the UAE, Kuwait and prior to that in Qatar and Saudi Arabia. We look forward to a new schedule of charges that will be binding in all GCC member states for charges related to trademark prosecution procedures. It is still unclear which fee model will be adopted and the ongoing uncertainty is unhelpful.\r\n\r\nIn conclusion, the prospect of having in place a unified trademark law in the GCC is broadly good news as it allows right holders to enjoy the same protection across the GCC. Although separate trademark filing will still be required, we consider that managing trademark portfolios in the region should be easier and more accessible given that the methods and maintainance of registrations will be more aligned though the GCC member states.  However, there are also a number of challenges through the introduction of the Trademark Law. In terms of practice and implementing the concepts, some GCC member states may find it difficult to upkeep their obligations as set out in the Trademark Law. One case in point is the concept of famous trademarks. Although most GCC member states have long been part of the Paris Convention and as such developed case law on the subject, Kuwait only adhered to the Paris Convention in 2014.  Accordingly, Kuwait will need to heavily rely on the experiences of the other GCC member states in order to attain the necessary expertise in the subject matter. The reality remains that the level of capacity and expertise vary drastically from one GCC Trademark Office and Court regime to another.\r\n\r\nFurther adding confusion over the matter is the fact that the GCC and, in particular the UAE, has some of the highest official fees in the world when it comes to trademark registration. The question remains that should a unified fee schedule be applied in the GCC member states, the right holders will have to significantly increase their budgets for the GCC region and some right holders may even limit their scope of protection opting to file in the larger markets of UAE and KSA and thereby foregoing the smaller GCC markets.'),
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(97848, 5316, 'content', 'February 2016\r\n\r\n<hr />\r\n<p class=\"MsoNormal\">A key part of the package of proposals is an attempt by the European Commission to change the way aviation agreements with key partner countries are negotiated.</p>\r\n<p class=\"MsoNormal\">In an accompanying fact sheet to its Aviation Strategy, the European Commission specifically targets the Gulf Co-operation Council (GCC) region, and notably UAE and Qatar, and announces that the Commission is seeking a new EU level policy to challenge the region which it “sees as one of the most dynamic and fast growing aviation markets in the world”. The document states that “while the additional connections provided by Gulf airlines are welcome, there are concerns regarding the conditions under which they operate. Comprehensive aviation agreements between the EU and the GCC states would be the right way forward to bridge the interests of both sides by creating conditions that would allow further market developments and growth based on common rules and transparency”.</p>\r\n<p class=\"MsoNormal\">The Convention on International Civil Aviation (1944) “The Chicago Convention” governs international civil aviation and it provides for a system whereby individual States have complete and exclusive sovereignty over their own national airspace. By Article 6 of the Chicago Convention “special permission” may be granted by a State for the operation of scheduled international air services. Such “special permission” is traditionally given in “bilateral air service agreements” between States opening each other’s national airspace to international air traffic.</p>\r\n<p class=\"MsoNormal\">In its Aviation Strategy document, the European Commission acknowledges that traditionally, international air transport has been governed by bilateral air service agreements between States, but it refers to these agreements as “a patchwork of differing market access and rules for airlines... and consequently the EU has developed an external aviation policy aimed at concluding comprehensive aviation agreements and aviation safety agreements between the EU as a whole entity and key aviation partners worldwide”. The European Commission points out that the EU has already concluded comprehensive aviation agreements with the United States and Canada, and is currently finalizing an agreement with Brazil, and has concluded aviation safety agreements with the United States, Canada and Brazil.</p>\r\n<p class=\"MsoNormal\">This attempt by the European Commission to move away from existing bilateral agreements between the Gulf States and individual European countries is a new departure and development. Indeed, one UAE airline issued an immediate response to the European Transport Commissioner’s proposal by saying that “the competition related issues are already covered under existing sovereign bilateral air service agreements, as well as existing EU regulation. Therefore, we find it interesting that rather than use these tools to address specific grievances, the European Commission is instead looking at a new EU level policy or updated instrument. We would also be interested to see what such policy would mean for state supported airlines in Europe, as well as existing anti-trust immunised joint ventures between European and non-European carriers and other “protected” commercial arrangements of this nature”.</p>\r\n<p class=\"MsoNormal\">The European Commission announcement follows on the heels of a challenge commenced in February 2015 by three US airlines, American, United Airlines and Delta, who published a 55 page report alleging, among a series of perceived grievances, that Etihad, Emirates Airlines and Qatar Airways have benefitted from state subsidies, and requesting that US administration officials begin talks with the UAE and Qatar to renegotiate existing international air service agreements.</p>\r\n<p class=\"MsoNormal\">The debate with the US carriers has brought into sharp focus the position of the Gulf Carriers who argue that they have flourished because they are clean-sheet business model businesses based on exemplary customer service, on new aircraft, with international hubs at the crossroads of the world’s main trade routes. Consequently, Gulf Carriers perceive the challenges to existing international arrangements as particularly ill advised.</p>\r\n<p class=\"MsoNormal\">Given the heated nature of the debate surrounding the attempts by the European Commission and the three US carriers to re-negotiate existing arrangements, it is worth stepping back and briefly explaining the historical legal framework under which the Gulf airlines have successfully conducted aviation business.</p>\r\n<p class=\"MsoNormal\">The Chicago Convention provides for the principle that states can impose limitations on flights of foreign aircraft and that each state has complete and exclusive sovereignty over the airspace above its national territory. In essence, national airspace is closed to foreign aircraft unless there is “special permission”. This “non-freedom of the air” can be turned into freedoms of the air pursuant to the terms of bilateral or other international air service agreements which have the effect of opening up the airspace of the parties to the agreement. Essentially a bilateral air service agreement is a contract between states to liberalise aviation services.</p>\r\n<p class=\"MsoNormal\">The Chicago Convention introduced “nine freedoms of the air” for States that have adopted the Convention, and the first “five freedoms of the air” are now recognized by international treaty so that States may enter into bilateral air service agreements that may grant any of the following rights:</p>\r\n\r\n<ul>\r\n 	<li>To fly across the territory of the State without landing</li>\r\n 	<li>To land in either State for non-traffic purposes e.g refuelling/disembarking passengers</li>\r\n 	<li>To land in the territory of the first State and disembark passengers coming from the home State of the airline</li>\r\n 	<li>To land in the territory of the first State and board passengers travelling to the home State of the airline</li>\r\n 	<li> To land in the territory of the first State and board passengers travelling to a third State where the passengers disembark – e.g scheduled flight from United States to UAE can pick up traffic in the U.K and take it all to UAE.</li>\r\n</ul>\r\n<p class=\"MsoNormal\">Since the Chicago Convention came into force, there has been a gradual development in aviation regulation to move from closed to open airspaces. When finalizing bilateral air service agreements, States followed a pattern based on the Bermuda 1 agreement of 1946, which was a treaty originally made between the US and the UK. It is fair to say that the Bermuda 1 regime was a compromise between a more restrictive market view put forward by the UK and a more open market view put forward by the US.</p>\r\n<p class=\"MsoNormal\">Following on from Bermuda 1, bilateral air service agreements between States have been used to designate which airlines may operate agreed services. The agreements generally provide for the designation of routes, ensuring “fair competition” certification of operating certificates, designation of prices and capacity, rules for safety and security, code sharing provisions, noise and emissions and environmental provisions, user charges for air services, taxation, access to airports, dispute settlement, and termination provisions if a State decides to withdraw its rights to fly.</p>\r\n<p class=\"MsoNormal\">The United States began pursuing the policy of negotiating “Open Skies” agreements from 1979 onwards, and it has signed many bilateral air service agreements worldwide to achieve this policy. Most of these existing “Open Skies” bilateral agreements include provision for free market competition and pricing determined by market forces, an equal opportunity to compete and co-operative marketing arrangements, such as code sharing and leasing arrangements with airlines, provisions for dispute settlement, safety and security provisions, together and what are called optional “seventh freedom on cargo rights”, so that the airline of one country can operate cargo services between another country and a third country via flights that are not linked to its homeland.</p>\r\n<p class=\"MsoNormal\">The Gulf state airlines argue that its existing Open Skies and bilateral air service agreements have succeeded and do not require re-negotiation either with the US carriers or with the European Commission.</p>\r\n<p class=\"MsoNormal\">In the context of the Chicago Convention, and aviation regulation generally, the European Union has pursued a policy to liberalise the transport sector both internally within the EU, and externally with countries outside of the EU.</p>\r\n<p class=\"MsoNormal\">Internally within the EU, the EU agreed to liberalise the air transport sector in 1987 and to create a single European aviation market by giving all airlines within the EU in possession of a community license “unrestricted access” to the intra European market. Until 1987, International air transport in Europe was governed by bilateral air service agreements between pairs of European countries which often allowed only one airline from each country to operate services on a limited number of specific routes. Liberalisation Packages were introduced in 1987 and 1990 so that European carriers were granted almost unfettered freedom to fix their own routes, schedules, fares and capacities without any State intervention. This liberalisation and unrestricted access to intra EU markets have facilitated the emergence of low cost carriers, operating a different model to the legacy owned national carriers, with low cost, high capacity flights.</p>\r\n<p class=\"MsoNormal\">The EU’s external aviation policy has also evolved so that the EU has increasingly has sought to enter into treaty negotiations on behalf of its member States. In 2002<a href=\"#_ftn1\">[1]</a>, the European Court of Justice (ECJ) concluded that member States were entitled to negotiate bilateral air service agreements provided that such agreements did not breach EU law. The ECJ confirmed that certain provisions of these agreements did not contravene EU rules, and in particular the provisions regarding the nationality of air carriers and the fares that foreign carriers were entitled to charge on inter-community flights.</p>\r\n<p class=\"MsoNormal\">In parallel with this, the European Commission issued a document<a href=\"#_ftn2\">[2]</a> commenting on the ECJ decision, and seeking a mandate to negotiate with third countries on behalf of member States as a whole. As a result, the EU Council has since given mandates to the European Commission to negotiate Open Aviation Air Agreements, examples of which are the EU-US Agreement on Air Transport (2007and 2010) and the EU-Canada Air Transport Agreement of 2009.</p>\r\n<p class=\"MsoNormal\">The European Commission’s Aviation Strategy for Europe is perhaps a continuation of this process, so that the European Commission is seeking to renegotiate on behalf of the EU as a whole, and potentially it is seeking a mandate to replace existing bilateral air service agreements concluded between EU member States and the Gulf Carriers.</p>\r\n<p class=\"MsoNormal\">It is difficult to predict whether the European Commission will succeed in its aim, or whether the US carriers will succeed in pressing for a re-negotiation of existing arrangements. There are provisions within the European bilateral agreements and the 2002 Open Skies agreement made between the US and the GCC states for dispute resolution, and indeed termination, but at this stage it is fair to say that the attempt by the European Commission to seek to tackle a perceived issue of competition from the Gulf Carriers within its new Aviation Strategy, and the position of the three US carriers, has raised much comment from the aviation industry.</p>\r\n<p class=\"MsoNormal\">Perhaps the best example of this divergence of views is exemplified by a new association of European airlines which was formed in January 2016 under the name Airlines for Europe (A4E). The new association is made up of Ryanair, IAG, (BA, Iberia Veuling, Aer Lingus), Easyjet, Air France-KLM and Lufthansa. Whilst the association’s stated intention is to provide a unity of approach, where possible, within the European aviation industry, A4E made it clear that its inaugural press conference in January 2016 that one area where the association will “agree to disagree” is the attempt by the European Commission to change existing arrangements with the Gulf carriers.</p>\r\nIt is evident that the present system under which Gulf Carriers conduct aviation business is being challenged by the European Commission in that it is seeking a mandate to negotiate a new comprehensive aviation agreement on behalf of the EU as a whole. The possibility of this, coupled with the possibility of the US administration re-negotiating existing bilateral air service agreements again if the US carriers’ arguments succeed, is an important issue for the forthcoming year. Nevertheless, it is hoped that Gulf carriers will continue to flourish as they have done so within the framework of international aviation law for the foreseeable future.\r\n<div>\r\n\r\n<hr size=\"1\" />\r\n\r\n<div>\r\n<p class=\"MsoFootnoteText\"><a href=\"#_ftnref1\">[1]</a> European Court of Justice Judgment, 5<sup>th</sup> November 2002. Cases C-466, 467, 468, 469, 471, 472, 475 and 476/98: Commission v United Kingdom, Denmark, Sweden, Finland, Belgium, Luxembourg, Austria, Germany.</p>\r\n\r\n</div>\r\n<div>\r\n<p class=\"MsoFootnoteText\"><a href=\"#_ftnref2\">[2]</a> COM (2002) 649 Final: Communication from the Commission on the Consequences of the Court Judgment of 5<sup>th</sup> November 2002 for European and Air Transport Policy.</p>\r\n\r\n</div>\r\n</div>'),
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(97817, 5314, 'content', 'February 2016\r\n\r\n<hr />\r\n\r\nMany years ago, a production facility was undertaking a rebuild and upgrade of a studio. They hired a contractor, who put in a subcontractor, who then got a subcontractor, who put in place a subcontractor, who hired a team of young freelancers to undertake the work. Unfortunately there was a serious accident involving one of the freelancers and suddenly the production facility was faced with many layers of contracts, none of which had been reviewed by a lawyer. What also became clear was that none of the subcontractors had contracts with each other that reflected the terms that were in place between the client and the contractor itself. The production facility ended up being held fully liable for the accident.\r\n\r\nThe media and events industry rely heavily on subcontractors to provide services to their clients. Whilst accidents are uncommon, properly passing liability down the chain (and back up again in some cases) remains important for all aspects of the contractual relationship. In this article, we will review those areas which should be carefully reviewed as well as looking at the possible legal ramifications of signing subcontractor agreements without checking them.\r\n\r\n<strong>The Scenario</strong>\r\n\r\nTo assist in explaining the importance of contractual relationships in the media and events industry, let’s consider the following, very normal, scenario.\r\n\r\nA client, Acme Retail, is working with their advertising agency, The Agency. Acme Retail and The Agency have carefully reviewed their contract terms before they are signed at the highest level, each aware that they are in a day-to-day relationship that is very important to both. Acme Retail asks The Agency to develop, deliver and produce a short live musical event to promote its brand. They also want the event to be filmed so that it could be used in digital media, with the eventual goal of it becoming viral content. The Agency gives the task of delivering the event to an events company, Events R Us, who then subcontract the filming activities to production company, Film Inc. Film Inc subcontracted the post production to an edit house, Edit.Com.\r\n\r\nContractually, Acme Retail has an annual contract with The Agency to be their creative agent and oversee production of content. The Agency signs a short form agreement that is supplied by Events R Us which they use for all their live corporate events. Film Inc supplies a purchase order to Events R Us and there is no contract at all with Edit.Com.\r\n\r\n<strong>What could go wrong? </strong>\r\n\r\n<strong>Intellectual Property Ownership</strong>\r\n\r\nIn the media and events industry, focusing as it does on creativity and buzz, it is easy to forget that underpinning the creation of materials is the legal concept of copyright. In the UAE, as with most places globally, copyright vests in the person that creates the material. Additionally, in line with the Berne Convention, which underpins most copyrights systems globally, an assignment of copyright will not be valid unless it is in writing. In short, if there is no written contract, then the person that created the works still owns them.\r\n\r\nIt is easy to see in the above scenario that there might be a problem. It is common in agency contracts for the client to demand that all materials created under the contract are wholly owned by them so that they can be used in perpetuity globally and in all media. So The Agency must deliver all rights to Acme Retail. Unfortunately, as it has contracted with Events R Us on a standard form events contract and it is not common for events to be filmed, it contains no clauses regarding copyright. But as they have no contract at all with Film Inc, then we know that copyright in the film created of the event will remain with Film Inc. Acme Retail does not own the film.\r\n\r\nBut Acme Retail thinks it does. It moves the film on-line and it becomes a sensation, winning awards and acquiring 2 million views in a short time.\r\n\r\nThe music that was used at the event is still contained in the film - it was shot live and is an important part of the event. As there are no contracts, there is no clear line of responsibility about the clearance of the music. Record companies will definitely seek damages for the infringing use of their material and will likely seek them from the brand. Acme Retail received a notice regarding the infringing use of the music. It looks to The Agency as there is generally a very clear indemnity clause in the agency contract. With no clear contract noting the liability for clearing music between The Agency and Events R Us, The Agency will most likely end up paying the damages.  All The Agency had to do was ensure that the indemnity contained within its contract with Acme Retail was mirrored in the subcontractor relationships. It should also, at every stage, ensure that all subcontractors under Events R Us sign a contract with a similar clause.\r\n\r\nThis not only protects itself against potential liability but ensures that Acme Retail does not receive legal notices. It also saves its reputation in the market place.\r\n\r\n<strong>Talent</strong>\r\n\r\nAs we noted above, Events R Us provided its own basic event contract to The Agency which was signed without being reviewed. It contained the dates, the venue and a synopsis of the services and provided for payment.\r\n\r\nEvents R Us then hired two dozen dancers to perform at the event. Each performer signed a one page release about performing which, again, included terms about dates, venue and payment. So what happens when the performers see themselves on an on-line campaign? After all, they were only booked for a live performance.\r\n\r\nIf Events R Us did not acquire a broad range of rights from the performers, then the performers have a right to seek additional fees from Events R Us. In fact, we have seen this happen many times in the region and the result is always the same – extra money must be paid to the performers. Sometimes a performer did not consent to being filmed at all but, more commonly, performers agree to be filmed to appear in (say) a billboard campaign for six months but then see themselves two years later in a magazine.\r\n\r\nOf course, in the contractual matter raised above, Events R Us is not in a strong position to claim the extra payments from anyone contractually. It can hardly pass liability to Film Inc, which did not arrange the performers. There is no question that both Film Inc and Edit.Com could have requested copies of the performers’ agreements but, as they have no contractual liability for the clearance of rights, they might simply ignore the matter as being someone else’s problem.\r\n\r\nAcme Retail, now pushing this content across to television advertising, will likely remain oblivious to the further payments being negotiated with performers for the content.\r\n\r\n<strong>Payment Dates</strong>\r\n\r\nThe vast majority of contractual disputes come back to payment, and the media and events industry is no exception. And in our scenario above, we do have to feel sorry for Edit.Com, who sits at the bottom of the chain and needs to be paid.\r\n\r\nThe usual response to lack of payment is to withhold the materials to be delivered. Edit.Co will probably do that. This places Film Inc in a difficult position. It has a purchase order and quite a significant number of emails agreeing to a delivery date but nothing ties delivery to payment. The fee is probably noted on the purchase order as being ‘payable on delivery’. Most smaller production companies in the region do not have the cashflow to pay Edit.Com to release the materials but Edit.Com knows that if it releases the materials, it has no way of securing its payment.\r\n\r\nPayment schedules are incredibly important in documentation. They should line up perfectly from Acme Retail across each contract and eventually to Edit.Com. Failure to do this can compromise deliverables and this can be exacerbated if any contract contains penalties for failure to deliver on key dates. These must also be passed down verbatim in order to avoid one entity being financially punished for the slow delivery of another.\r\n\r\n<strong>Liability</strong>\r\n\r\nIt is often the case that certain terms that have been agreed in the client agreement are omitted in subcontractor agreements. For example, Acme Retail may have included a cap on liability in their contract with The Agency. This is not of course reflected anywhere else in the documents relating to the event.\r\n\r\nThis may not be relevant as, in most cases, Acme Retail will not be providing services for the event. But let’s imagine that they are actually arranging a branded car to be part of the event. Events R Us obviously secure the venue under a standard venue contract – this will have no cap on liability. Then their marketing manager drives the branded car from the venue, crashing it into the DJ booth and causing severe damage to the electrical system.\r\n\r\nAcme Retail is contractually liable (other legal obligations aside) to the value of the cap. However Events R Us, as the signatory to the contract with the Venue, are liable for the full amount of the damage. A cap on liability is never a preferred position, but if you have one then it should always be passed down to subcontractors (including, in this case, the venue) to ensure you do not end up with liability.\r\n\r\n<strong>Conclusion</strong>\r\n\r\nFrom a practical perspective, allowing a subcontractor to commence work before the terms of the supply are properly finalised means that they can assess the work and realize that they need higher fees, meaning either a late re-negotiation or the replacement of a subcontractor midway through the project (neither of which is commercially satisfactory). But this issue becomes very difficult legally when the key commercial terms are not passed down into to subcontractors.\r\n\r\nFundamentally, any ambiguity in a commercial relationship provides an excellent basis for misunderstandings, arguments and eventually a legal action. The situation is no different in the media and events industry. Prepare your contracts well, pass on key liabilities to the appropriate subcontractors and ensure that, if anything does go wrong, you are not the one left opening your piggy bank.\r\n\r\nAl Tamimi &amp; Company’s Technology, Media &amp; Telecommunications team regularly advises clients in respect of contracts in the media and events industry.\r\n\r\nFor further information, please contact Fiona Robertson, Senior Associate, Technology, Media &amp; Telecommunications (f.robertson@tamimi.com).'),
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(97831, 5315, 'content', 'February 2016\r\n\r\n<hr />\r\n\r\n<strong>Liability for out-of-jurisdiction  healthcare advice </strong>\r\n\r\nAn important issue that all parties to a telemedicine arrangement need to understand is how medical liability is determined, both between providers within the region, and between providers where one is local and the other is from outside of the region. There is inevitably some uncertainty over which party will be left holding the proverbial ‘baby.’ In the UAE the position is governed by a suite of Federal and local Emirate laws. Federal Law No. (10) 2008 concerning Medical Liability and the Cabinet Decision No. (33) of 2009 are the governing medical liability laws in the UAE (together, ‘Liability Law’). The Liability Law pertains to practitioners within the UAE. This law does not address liability as it relates to foreign practitioners engaged in activities with local facilities. In general, UAE laws would not have jurisdiction over foreign providers except insofar as they are parties to a contract governed by UAE law.\r\n\r\nIn terms of individual healthcare practitioner liability, all healthcare providers in the UAE are subject to the Liability Law. Failing to observe the law or committing a medical error would expose the practitioner to the risk of a civil claim for damages. A medical error under the Liability Law, Article 14, is an ‘error which is due to ignorance of technical matters which every practitioner of the\r\n[p]rofession is supposed to be familiar with, or to negligence or lack of due care.’\r\n\r\nRegulations such as the Dubai Health Authority’s (‘DHA’) Hospital Regulation and Day Surgical Center Regulation indicate that while clinical services provided by an external contractor are permitted (such as radiology, laboratory, pathology and allied health) the contracting DHA licensed healthcare facility retains the fundamental responsibility for quality. Given that the DHA places this burden on the contracting facility, even when out-of-jurisdiction contracts are not specifically contemplated, in circumstances where healthcare services are performed by out-of-jurisdiction providers, such as in tele-radiology services using foreign providers, we expect that the facility or a named practitioner at that facility could be named as a party to civil (i.e. tortuous) proceedings brought before the UAE courts in the event of a malpractice case resulting from the errors of a foreign provider. We expect that such a case would centre around (i) evidence of negligence with regard to the services provided, and (ii) the potential failure of the local facility to perform proper due diligence in contracting with the third party or (iii) proper quality regulation and oversight of the third party.\r\n\r\nThe question of whether the out-of- jurisdiction provider can be drawn-in to the proceedings will depend on the facts. Then, if a local provider is found to be liable, the commercial contract with the out-of-jurisdiction provider may then govern whether any indemnity or claw-back provision applies.\r\n\r\nThe Health Authority - Abu Dhabi (‘HAAD’) has implemented similar standards governing how liability is managed in a telemedicine arrangement. HAAD regulations place liability on the originating HAAD-licensed healthcare facility for the clinical and medical services provided through telemedicine. Medical and legal risk exposure can be reduced by implementing facility telemedicine policies and guidelines, including continual training and licensing requirements, and proactive monitoring of staff performance.\r\n\r\n<strong>Data protection issues</strong>\r\n\r\nIn the event of a data breach, the key issues are (i) what are the legally required mechanisms for reporting and rectifying the breach and (ii) to what extent does the provider have liability for the release of confidential information.\r\n\r\nThe use of telemedicine services, especially those which require personal health information to be transmitted electronically out-of-jurisdiction, increase the risk of a security breach and loss of confidential patient data. Digital health records can be valuable to criminals. Medical identity theft, the fraudulent use of someone’s personal identity to obtain medical services, prescription drugs or devices, are a few examples of the potential damage.\r\n\r\nIn Abu Dhabi, the management of data is governed by a very chunky Data Standard. Accordingly, compliance with these requirements require both the local licensed healthcare provider and the foreign service provider to implement IT systems to meet this standard as a minimum. This ensures a robust regulatory environment along with basic data protection and confidentiality standards, together with a process for reporting and remedying breaches, as well as provider liability to patients in the event of a breach.\r\n\r\nSecuring the data network, from both outsider threats and from a business continuity perspective, is of paramount importance. Advances in telemedicine and eHealth across the region will be determined by regulators developing efficient policies, developing appropriate data protection laws, and ensuring that legal and regulatory constraints do not impede innovation.\r\n\r\n<strong>The advertising of services from out-of-jurisdiction </strong>\r\n\r\nHealth service advertising is regulated in two main ways, primarily under the aegis of the Ministry of Health of each Gulf country, which typically have oversight powers over all health-related matters in their jurisdiction, and secondarily by other regulators, such as the Ministry of Information in the Kingdom of Saudi Arabia (‘KSA’), which regulates all publications in KSA with specific oversight and licensing powers as regards to publicity, advertising and public relations.\r\n\r\nA healthcare provider wishing to target patients within a Gulf country from outside the jurisdiction in order to advertise their services and attract patients to travel outside the jurisdiction for treatment, or for telemedicine consultations, needs to be aware of the restrictions in the countries in which advertisements are likely to be viewed. The question of whether a provider would be deemed to be caught by the laws of a particular country will depend on many factors, such as the classification of advertising, social media, print media, magazines and commercials, coupled with the extent to which it is targeted at a certain country or region.\r\n\r\nWhilst a high-profile advertising campaign may extend the potential pool of patients, thought should be given as to how to ensure payment for services delivered. Some providers are using such advertising to target only high net-worth individuals and insured patients who will pay themselves then seek reimbursement from their insurer. Thought should be given to addressing advertising, licensing, permit, and regulatory issues, as applicable.\r\n\r\n<strong>Insurance reimbursement </strong>\r\n\r\nThe opportunity to grow telemedicine services as a tangible alternative to traditional face-to-face consultations relies heavily upon there being a reliable route to obtaining reimbursement. Typically, healthcare providers in the region have arrangements in place with governments or insurers for reimbursement of services. The various payment codes set up for this must include payment for telemedicine in all of its various formats. Progress on this has been made in the UAE with many insurers now recognising the benefits of telemedicine as a preventative medicine tool. However, as the overall cost of healthcare provision escalates, insurers are looking for opportunities to cut costs and are pruning certain benefits out of the reimbursement scheme. Such cut backs are currently on the radar of the government of Abu Dhabi for certain telemedicine services, which are at risk of being withdrawn. The reasons for this are currently unclear but must be viewed as a set-back that we hope will not contaminate other Emirates of the UAE or regional thinking for these benefits.\r\n\r\n<strong>The urgent need for clarity and consistency </strong>\r\n\r\nThere remains a significant gap between the traditional laws that govern the establishment and ‘setup’ of a healthcare business, on the one hand, and the telemedicine laws on the other. For example, a local healthcare provider must demonstrate that it has the requisite number of employed radiologists and radiographers etc. at its facility, but if it later adopts telemedicine services and outsources radiology services via a telemedicine provider, there is no relaxation of the rules with regard to the number of on-site employed personnel. This situation clearly impacts upon the question of whether the outsourcing of those services is a cost-effective option. As this issue is becoming increasing more common and as outsourcing via telemedicine services grows in popularity, local health authorities should be consulted about outsourcing plans and their approval sought to enable a downscaling of requirement for on-site support.\r\n\r\n<strong>Conclusion </strong>\r\n\r\nWhat is urgently needed is a consistent regional approach to regulation governing the use of telemedicine services based upon internationally recognised standards. For the Gulf countries, this means a whole-scale re-think of how telemedicine will impact upon the existing set-up of healthcare facilities to enable a smooth transition over to telemedicine outsourcing on a larger scale. As things currently stand, the fact that the region lacks leadership on this point should not be seen as a barrier to entry. The Gulf countries are keen to embrace telemedicine as the weapon of choice that will meet the future needs of the region.\r\n\r\nThis article was originally published in eHealth Law &amp; Policy – November 2015.  http://www.e-comlaw.com/ehealth-law-and-policy/\r\n\r\n&nbsp;'),
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(97798, 5313, 'content', 'February 2016\r\n\r\n<hr />\r\n\r\n<strong>Introduction </strong>\r\n\r\nAbu Dhabi Global Market, the recently-created commercial free zone in the heart of the UAE’s capital city, issued a modern UNCITRAL-based arbitration law on 30 December 2015, pursuant to the “Arbitration Regulations 2015”. The Regulations govern all arbitrations seated in Abu Dhabi Global Market, as well as the enforcement of all arbitral awards in the jurisdiction.  This article gives some background to the Regulations, discusses their focus and approach, and highlights some notable features.\r\n\r\n<strong>Abu Dhabi Global Market</strong>\r\n\r\nAbu Dhabi Global Market (ADGM) is an international financial centre and free zone for local, regional and international companies, which is headquartered on Al Maryah Island in Abu Dhabi. ADGM, which commenced operations in 2014, is overseen by three independent authorities: the Registration Authority, the Financial Services Regulatory Authority and the ADGM Courts.\r\n\r\nIn addition, a wide ranging set of well-established English statutes on civil matters are also applicable in ADGM.  ADGM is thus the first jurisdiction in the Middle East to directly apply English common law.\r\n\r\nThe ADGM Board of Directors (ADGM Board) is empowered to enact ADGM laws and legislation.\r\n\r\n<strong>The Arbitration Regulations </strong>\r\n\r\nFollowing a consultation process, in which Al Tamimi &amp; Company participated, the ADGM Board decided to enact comprehensive Regulations to govern arbitration and the enforcement of arbitral awards within ADGM in furtherance of its objective to offer market participants a worldclass legal system and regulatory regime.\r\n\r\nIn a break from its general approach of adopting English law, the Arbitration Regulations enacted by ADGM does not follow the English law in this area, but instead closely follow the UNCITRAL Model Law. In doing so the ADGM has enacted a modern law reflecting the most widely acknowledged best practice in international arbitration, which will encourage the wide use of ADGM as a seat of arbitration in the region.\r\n\r\nA pervasive pro-arbitration approach has been taken in the Regulations: there is limited scope for court intervention in the arbitral process; tribunals have the power to consider and decide disputes concerning their jurisdiction; and the grounds for challenging an arbitral award are limited to narrow circumstances with no review of the merits of the dispute.  The Regulations are also intended to ensure that tribunals constituted within a ADGM are independent of, and impartial as between, the parties, must respect due process and must ensure equal treatment of the parties.\r\n\r\n<strong>Enhancements made to the Model Law</strong>\r\n\r\nThe Board has implemented a series of modifications and enhancements to the UNCITRAL Model Law to reflect the most modern and progressive arbitration practice internationally, which it believes will appeal to end users of ADGM arbitration and the regional legal community.  Significant modifications and enhancements include:\r\n\r\n<strong>Enhanced confidentiality and privacy</strong>\r\n\r\nGiven the nature of the business that will be conducted in ADGM and the prevailing culture of discretion in the region, the Model law has been amended as follows:\r\n<ul>\r\n 	<li>The award and any information relating to the arbitral proceedings are confidential and may not be disclosed to a third party, save for certain limited circumstances.</li>\r\n 	<li>All arbitration-related proceedings in the Court are to be heard in closed court.</li>\r\n</ul>\r\n<strong>Joinder of third parties </strong>\r\n\r\nThe Regulations provide that the ADGM Court or the arbitral institution administering the arbitration (if there is one) can join a third party to the arbitration even if that third party is not a party to the arbitration agreement and other parties do not consent. The criteria, similar to that found in the LCIA Rules, is that (i) the request must be made by a party to the arbitral proceedings; (ii) the third party must consent in writing to the joinder; and (iii) it is in the interests of justice to allow the joinder and does not prejudice any of the parties.\r\n\r\n<strong>Waiver of right to bring an action for setting aside</strong>\r\n\r\nThe Regulations provide that the parties may, by an express statement in the arbitration agreement or by a subsequent written agreement, waive fully the right to bring an action for setting aside, or to limit it to certain grounds. While the foregoing provision is intended to make the award completely final and “unappealable”, the award may nonetheless still be denied recognition and enforcement (if the award is to be enforced in the ADGM).\r\n\r\nIn addition to the foregoing, the Regulations contain comprehensive and helpful provisions on numerous issues relating to the conduct of arbitration proceedings, including a wide range of available remedies to assist the parties and the process generally.\r\n\r\n<strong>Conclusion</strong><strong> </strong>\r\n\r\nThe enactment of the Regulations is another important milestone for ADGM: its birth as a fully-fledged arbitral seat. It is a further indication that ADGM is committed to providing clear, transparent and robust rules and regulations to an international “best practice” standard. ADGM has taken the lead in enacting one of the most modern and progressive arbitration laws in the Middle East. The Regulations may serve as a bellwether for other initiatives, including the long-awaited enactment of a UAE federal arbitration law.'),
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(97775, 5312, 'content', 'February 2016\r\n\r\n<hr />\r\n\r\nThis stems primarily from the fact that the standard forms of contract of the Federation International des Ingenieurs-Conseils (‘FIDIC’) are the predominant forms used in the region, FIDIC’s means of formal dispute resolution is by way of (ICC) arbitration.\r\n\r\nThere are clear benefits to arbitration (e.g. the parties can decide on the seat, applicable rules, the tribunal and the arbitral process allows for a detailed analysis of claims and defences), but those involved in the process will be familiar with its current misgivings.\r\n\r\nSome say that arbitration takes too long and costs too much and even after an award has been issued there remains an uncertainty of how the local courts will act in terms of enforcement. For example, concerns about the Dubai Courts is making the ‘offshore’ Dubai International Financial Centre an increasingly more attractive potential seat and is now seen as a serious alternative to ‘onshore’ Dubai. Whilst their arguments may be legally sound, it is not unknown for a losing party to invoke technical legal arguments to challenge an arbitral award in an attempt to further delay its ultimate liability to make payment.\r\n\r\nThe above misgivings of arbitration are not unique to the region or the construction industry; indeed, these complaints are shared with the international arbitration community for both general commercial and investor state arbitrations.\r\n\r\nThose familiar with statutory adjudication in the UK will recall that prior to the enactment of the Housing Grants, Construction and Regeneration Act 1996, domestic arbitration in the UK was suffering with the same complaints. Around that time the construction industry in the UK was in need of a credible form of alternative dispute resolution and it came along in the guise of statutory adjudication. Whilst contractual adjudication already existed in the UK, it needed the intervention of statute to provide the traction to take off. Its success is now well versed, so much so that its model was subsequently mirrored in Australia (1999), New Zealand (2002) and Singapore (2004). It may be said that statutory adjudication has become a short-form quasi-arbitration process, save that, amongst other things, unlike an arbitration award, an adjudication decision is only temporarily binding.\r\n\r\nWith the above in mind, should the region’s construction industry be looking for an alternative means of resolving its disputes? The answer must be a resounding yes. According to FIDIC, internationally, contractual adjudication (in the guise of a Dispute Adjudication Board (‘DAB’)) works extremely well. However, there appears to be a genuine reluctance in the region to use DABs. Our experience is that the DAB provisions of most of the ‘new’ FIDIC contracts we encounter are either struck out or simply ignored. Leaving aside the fact that the benefits of DABs to projects and their participants are being lost, there is also a risk that construction professionals and the region’s industry are falling behind international standard practice for dispute resolution.\r\n\r\nThis article seeks to provide a general overview of what the DAB process is, how the concept originated, how it works and highlight some of the benefits of the process.\r\n\r\n<strong>What are DABs and what was their genesis?</strong>\r\n\r\nSimply stated, DABs are a form of alternative dispute resolution (‘ADR’). More specifically, DABs can be said to fall under the generic category of adjudication. ADR includes:\r\n<ul>\r\n 	<li><strong>Mediation: </strong>the parties agree to have a third party attempt to facilitate a settlement;</li>\r\n 	<li><strong>Conciliation:</strong> often used interchangeably in the region with mediation, but in normal construction parlance it is generally taken to mean where the facilitator ends up issuing a recommendation if there is no settlement;</li>\r\n 	<li><strong>Mini-Trial:</strong> both parties present their cases in a summary form to the senior management of both organizations with an independent third party acting as referee;</li>\r\n 	<li><strong>Med-Arb:</strong> an individual first acts as a mediator and if a settlement is not achieved at he then goes on to sit as arbitrator (this may give rise to legal issues for the individual acting in both roles);</li>\r\n 	<li><strong>Early Neutral Evaluation: </strong>the parties submit their respective cases to a neutral third party (e.g. a QC or judge) who then provides his opinion on the matter;</li>\r\n 	<li><strong>Expert Determination: </strong>the parties agree to submit their (technical or valuation) dispute to a third party who then issues a binding determination; and</li>\r\n 	<li><strong>Adjudication:</strong> contractual or statutory adjudication (including DAB or Dispute Review Boards (‘DRBs’)), the parties agree or are obliged to submit their respective claims to a third party who then makes a decision which is temporarily binding.</li>\r\n</ul>\r\nA benefit of ADR can be succinctly stated as being a means of resolving disputes by avoiding the cost, time and inflexibility of litigation or arbitration.\r\n\r\nADR should be less costly because there should not be the same level of involvement of lawyers and experts. The cost of arbitrators, institutions and tribunal secretaries can be avoided. It also avoids the waste of a party’s valuable management time otherwise spent dealing with his continuous involvement in a dispute over many months, if not years, in the litigation or arbitration process. Speedy resolution of a dispute allows the managers to spend their time performing their primary day-to-day business duties rather than getting involved in ancillary dispute management.\r\n\r\nAnother benefit of ADR is that, if used properly, it should lead to the quicker resolution of a dispute. Mediations are often conducted in a single day, statutory adjudication in the UK requires a decision within 28 days and a DAB is required to render a decision within 84 days.\r\n\r\nBecause ADR is flexible and not as adversarial as litigation or arbitration, the parties should be able to agree upon the process for themselves, which should lead to maintaining working and commercial relationships.\r\n\r\nThe early involvement (and possible decision) of an independent third party allows the parties to seriously consider their respective positions before embarking on a possible lengthy and costly process of formal dispute resolution via the courts or arbitration.\r\n\r\nThose familiar with the history of FIDIC’s dispute provisions will be aware that when it published its 1st Edition (1957) a dispute was, in the first instance, to be referred to the Engineer for his decision and any dissatisfied party had to wait until the works were completed before it could start an ad hoc arbitration. The FIDIC 2nd Edition (1969) moved from an ad hoc arbitration to an ICC arbitration (which still remains the position today), whilst the 3rd Edition (1977) allowed for an arbitration to be started before the works had been completed. The FIDIC 4th (1987), colloquially known as the ‘Red Book’, introduced the requirement for a 56 day amicable settlement period before starting an arbitration.\r\n\r\nThe genesis of DABs can be said to be the use of DRBs on large civil engineering projects in the USA in the 1960s. The primary difference between a DRB and a DAB is that the former makes a recommendation which can become binding whilst the latter issues a decision which is immediately binding, albeit temporarily. In short, therefore, a DRB is advisory; whereas, a DAB is adjudicatory.\r\n\r\nSubsequently, in the 1980s the World Bank included the use of DRBs in its standard conditions for contracts above a certain value. FIDIC first included for a DAB in its 1985 ‘Orange Book’.\r\n\r\nWhen the ‘new’ FIDIC contracts first came on the scene in 1999 they included somewhat radical changes to the dispute provisions of the previous FIDIC standard forms, which until 1999 had pretty much mirrored the dispute provisions of the English ICE forms of contract. Despite these ‘new’ forms now being over 15 years old, we still regularly encounter the ‘Red Book’, the ‘Orange Book’ and, to a lesser extent, the FIDIC 3rd Edition.\r\n\r\nOne of the most fundamental changes in the ‘new’ FIDIC contracts was the mandatory obligation in Clause 20 to refer a dispute to a DAB before going to arbitration. As mentioned above, in the previous FIDIC contracts (save for the ‘Orange Book’ (and Section A of the 1996 Supplement to the ‘Red Book’ which provided an option to use a DAB)), a dispute had to be referred to the Engineer for his decision before it could be referred to arbitration. When drafting its new suite of contracts FIDIC took on board the concerns raised by the contractors that the previous Engineer decision process was not working.\r\n\r\nAs an aside, in 2004 the ICC introduced its new Dispute Board Rules, which included for both DRBs and DABs and also a hybrid between the two known as a Combined Dispute Board (‘CDB’).\r\n\r\n<strong>How does a DAB work?</strong>\r\n\r\nFIDIC provides for two different types of DAB: a standing DAB (Red, Pink and Gold Books) and an ad hoc DAB (Yellow and Silver Books).\r\n\r\nWith a standing DAB, the DAB is named in the contract and appointed at the outset. In this way the DAB will be involved in a project from its start. The DAB will make regular site visits, contemporaneously read important communications, become familiar with the parties and key individuals and deal with issues as and when they arise. A standing DAB may be called upon to issue an opinion on a matter and will issue a report after each site visit.\r\n\r\nWith an ad hoc DAB, the DAB will be appointed only after a dispute has arisen and will deal with the dispute accordingly.\r\n\r\nIf there is to be a three member DAB each party will appoint its own DAB member and the third member (chairman) will be agreed upon. The FIDIC contracts provide a mechanism in case there is a deadlock in the DAB’s appointment process. Just like arbitration, the parties should give careful consideration as to who they will nominate as their chosen DAB member and should have regard to the following when making that choice:\r\n<ul>\r\n 	<li>Independence</li>\r\n 	<li>Impartiality</li>\r\n 	<li>Qualifications</li>\r\n 	<li>Experience</li>\r\n 	<li>Availability</li>\r\n</ul>\r\nDepending on whether a standing or ad hoc DAB is used, the DAB members will enter into a DAB agreement with the contracting parties either at the start of the project or when the dispute arises.\r\n\r\nAs for remuneration, the way in which the DAB is paid depends on whether it is a standing or ad hoc.\r\n\r\nA standing DAB will be paid a monthly retainer, a daily fee for site visits and/or dealing with a dispute, and also its reasonable expenses. Whilst the DAB’s fee will be shared equally between the parties, the DAB will invoice the Contractor who will make payment and then seek 50% recovery by way of the interim payment certificate process. Payment is due to the standing DAB within 56 days of its invoice.\r\n\r\nAn ad hoc DAB will be paid for its daily fee and reasonable expenses. It will not receive a monthly retainer because it only gets appointed after a dispute has arisen. The ad hoc DAB can request an advance of up to 25% of its estimated daily fees and can expect payment within 28 days of its invoice.\r\n\r\nGenerally, the process will start when the chairman receives the referral (however, the time starts from the date of response in the Gold Book (note that the 84 days will be extended to 105 days if no response is served), or the date when the 25% advance is paid in the case of an ad hoc DAB.\r\n\r\nWhichever start date applies, the DAB will usually have 84 days in which to make its decision. Taking into account the usual referral, response, reply, rejoinder, reading time, preparation for and attending meetings, preparation and writing of a decision, this 84 day period will quickly evaporate. Indeed, it would not be unusual for the DAB to request at the very outset that this 84 day period be extended. It would be a brave party to object to the request for such an extension by the decision maker.\r\n\r\nOnce faced with a referral the DAB will (or should) quickly determine the procedural steps to be implemented. Helpfully, the FIDIC Guide provides a format for a DAB process along the following lines:\r\n<ul>\r\n 	<li>Referral</li>\r\n 	<li>Response</li>\r\n 	<li>Reply</li>\r\n 	<li>Rejoinder</li>\r\n 	<li>Hearing</li>\r\n 	<li>Claimant’s case</li>\r\n 	<li>Respondent’s case</li>\r\n 	<li>Claimant’s response</li>\r\n 	<li>Respondent’s response</li>\r\n 	<li>DAB questions</li>\r\n</ul>\r\nThe DAB is free to act in an inquisitorial manner and can decide who will attend the meetings. Therefore, provided that the DAB acts fairly and impartially, it can pretty much decide for itself how it wishes the process to flow. Another important issue is that the DAB is empowered to decide on its own jurisdiction (in arbitration the ability of a tribunal to decide upon its own jurisdiction is known as the Kompetenz - Kompetenz principle).\r\n\r\nAs mentioned above, the DAB is usually obliged to issue its decision within 84 days. This time period must be strictly adhered to, as must the other formalities expressly provided in Clause 20.\r\n\r\nIf a party is unhappy with the DAB’s decision then it must issue a notice of dissatisfaction within 28 days of receiving the decision.\r\n\r\nIf a decision is acted upon then there are no further issues. If the decision is not complied with then steps will have to be taken by the successful party to enforce the decision.\r\n\r\nWhilst there are provisions provided within the FIDIC conditions to assist the successful party in terms of enforcing a decision, some legal commentators identified a lacuna in Sub-Clause 20.7 in that it failed to deal with how to enforce a DAB decision which had been challenged in the 28 day period (this problem did not apply to the Gold Book). Those familiar with the recent Persero cases will be aware of the problems caused by this lacuna. Consequently, in 2013 FIDIC issued a Guidance Memorandum (2013) recommending that future users of the ‘new’ FIDIC contracts amend the existing Sub-Clause 20.7.\r\n\r\nNotwithstanding that the most recent Persero case ([2015] SGCA 30) resulted in a majority judgment to enforce the DAB decision, it will be interesting to see if the points promulgated in the dissenting judgment will be developed further in other legal jurisdictions if and when enforcement proceedings are brought there, especially if the instant FIDIC contract has not been amended in the manner suggested above.\r\n\r\nWhilst there are provisions in the laws of the UAE that could possibly be relied upon in the local courts in an attempt to directly enforce a DAB decision, it remains to be seen how receptive these courts will be when faced with an application to enforce a DAB decision in the manner prescribed by FIDIC and the Persero cases, i.e. an interim arbitral award regarding the DAB decision, whilst the main arbitral proceedings relating to the underlying dispute and subsequent challenge to the DAB decision remain undecided. What is clear, however, is that just like their brethren common law courts, the local courts are likely to uphold FIDIC’s pre-conditions to arbitrate if, that is, the DAB provision has not been struck out.\r\n\r\n<strong>The benefits of using Dispute Adjudication Boards</strong>\r\n\r\n<strong>So what are the benefits of using a DAB?</strong>\r\n\r\nIf a standing DAB is used (which is the preferred option of the many legal commentators on the subject) then the DAB members become fully familiar with issues that have the potential to manifest themselves into disputes. They can, therefore, take measures early on in attempt to nip these potential disputes in the bud, i.e. this can be seen to be proactive dispute avoidance as opposed to reactive dispute resolution. Indeed, having a standing DAB in place is probably the only method of ADR which is in place before a dispute arises.\r\n\r\nThe DAB members will visit site and also review key correspondence. The DAB will become familiar with the main individuals involved on the project and, importantly, identify personality issues/clashes which can itself often lead to disputes.\r\n\r\nIt also allows the parties to have an independent third party involved and observe the actions of others, which should provide confidence that both parties will adhere to their obligations from the outset and behave properly, knowing that their respective actions are being constantly observed and monitored.\r\n\r\nClause 20 provides that the DAB is to make its decision within 84 days. Compare this with the usual 18 – 24 months to get an arbitration award in construction arbitrations.\r\n\r\nThe DAB controls the process. There should not be the need for extensive use of lawyers, experts and witnesses, therefore, the costs should be significantly reduced compared to litigation or arbitration.\r\n\r\nIf there is to be a meeting, as opposed to a formal hearing, then it will often take place on site, which can eliminate the costs for a venue which are incurred in arbitration.\r\n\r\nImportantly, because of the flexibility of the process and because it should operate quickly and cost effectively, there should be a greater opportunity to maintain working and commercial relationships.\r\n\r\n<strong>Summary</strong>\r\n\r\nBoth regionally and internationally, the reputation and image of arbitration is suffering. There are complaints (possibly justifiable in some cases) that it takes too long and costs too much.\r\n\r\nTherefore, those involved in disputes in the region’s construction industry may wish to consider alternative methods of dispute resolution.\r\n\r\nThere are reports from both FIDIC and legal commentators alike that standing DABs often lead to the speedy resolution of disputes without the need to resort to arbitration.\r\n\r\nIt is suggested that, if used properly, standing DABs can add value to a project in terms of real life dispute avoidance. Factoring in the cost of a DAB at the outset should be seen as a proactive step towards dispute avoidance, rather than the alternative negative step of waiting for an issue to manifest itself into a fully blown dispute necessitating formal, costly and lengthy arbitration proceedings.\r\n\r\nIt remains the case that DABs are not being used in the region to the extent they are in other parts of the world. Whilst there is no clear reason for this lack of uptake, it may be that employers continue to dictate the allocation of risk in contract negotiations, which includes the risk associated with dispute resolution provisions, and they may be concerned that DABs could issue adverse decisions in terms of time and/or money. There may also be a perception that the additional up-front costs of a standing DAB are not warranted as part of the overall project cost. Finally, even if a DAB decision is rendered and subsequently challenged, given it would not be final and binding, and leaving aside possible contractual ways for its enforcement, there remains an uncertainty of how such a decision would be dealt with by the local court leading to ancillary litigation and wasted time and costs.\r\n\r\nIn light of the above, it appears that a cultural shift in the mindset of employers is required and, possibly like the UK before it, maybe statutory intervention with a subsequent groundswell of judgments from the local courts if DABs are to gain any traction in the region.'),
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