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(93953, 5103, 'content', 'March 2015\r\n\r\n<hr />\r\n\r\nThis resolution allows foreign nationals and companies owned by foreign nationals to own usufruct rights over vacant plots of land for a period of 100 years in Sharjah, and to register such usufruct right with the Sharjah Real Estate Registration Department (“SRERD”). The New Resolution also permits foreign developers to register projects and sell usufruct rights to investors subject to obtaining a special approval from the Ruler of Sharjah.\r\n\r\n<strong>Rules of Ownership in Sharjah</strong>\r\n\r\nBy way of background, Article 4 of Sharjah Law No. 5 of 2010 (the “Registration Law”) restricts the ownership of real property rights in the Emirate of Sharjah to UAE and GCC nationals, and companies fully owned by UAE and GCC nationals, or a combination of both.\r\n\r\nThe text of Article 4 of the Registration Law states that:\r\n\r\n“The right to own Real Properties in the Emirate shall be restricted to nationals of the State, nationals of the Cooperation Council for the Arab States of the Gulf, and the companies and organizations wholly owned by any of the foregoing. Notwithstanding, the right to own Real Properties in the Emirate may be granted as follows: (a) Ownership with the consent of the Ruler and upon the conditions prescribed by the Ruler, and (b) By inheritance bequeath under decree of distribution or waiver from the owner to one of his first-degree relatives, according to what is prescribed in the Executive Regulations of this Law.”\r\n\r\nThus, Article 4 above clarified that the position till date was that foreign nationals could only be granted ownership of real property rights by prior consent of the Ruler and subject to satisfaction of conditions prescribed by the Ruler. In general, we are aware that the Ruler has granted exemption to several foreigners subject to satisfaction of certain requirements and payment of prescribed fees.\r\n\r\n<strong>Usufruct Licensing Under the New Resolution – Rejoice for Foreign Developers</strong>\r\n\r\nUsufruct is a real property right whereby the usufructuary enjoys the use and utilizes another person’s property without the disposition, alteration or destruction of the property itself.\r\n\r\nThe New Resolution permits the sale of usufruct rights through a usufruct system managed by SRERD. Under the usufruct system, whilst developers and real estate property owners from UAE nationals, GCC nationals, companies and institutions fully owned by them, are eligible to obtain such license, it also provides that foreign nationals and companies owned by foreign nationals may obtain such usufruct license to sell real estate in certain pre-approved areas in Sharjah, subject to prior consent of the Ruler.\r\n\r\nThis right of usufruct license by foreigners is viewed as a new and welcomed development in Sharjah, one that will promote foreign investment in the Emirate.\r\n\r\n<strong>Requirements for Obtaining the Usufruct License</strong>\r\n\r\nArticle 3 of the New Resolution lays down the requirements for the grant of usufruct license to developers. It should be noted that foreign developers pre-approved by the Ruler may be subject to further additional conditions.\r\n\r\nThe requirements are as follows:\r\n<ul>\r\n 	<li>The usufruct period shall be for a maximum period of (100) hundred years.</li>\r\n 	<li>The project plot shall be owned on a freehold basis by the licensed developer.</li>\r\n 	<li>The licensed developer must register the project with SRERD prior to marketing or selling any usufruct rights over the vacant plots in accordance with the usufruct system.</li>\r\n 	<li>The licensed developer shall furnish to SRERD a bank guarantee from a UAE bank equal to 20% of value of the project prior to the sales of usufruct rights over vacant plots in accordance with the usufruct system.</li>\r\n 	<li>The licensed developer will be required to sign the SRERD commitment form which lays down the rules and conditions for selling the usufruct rights.</li>\r\n</ul>\r\nIn our opinion, the above requirements set by Article 3 are to safeguard the investors in such projects, and to ensure that the licensed developer is capable and financially efficient to deliver the project.\r\n\r\n<strong>Ownership of usufruct right by Foreign Investors </strong>\r\n\r\nThe earlier position was that foreign nationals or companies owned by foreign nationals were not permitted to own real estate in Sharjah. With the introduction of the New Resolution, whilst foreign nationals are not permitted to obtain freehold ownership of real estate in Sharjah (unless special exemption is obtained from the Ruler) they will now be permitted to purchase real estate pursuant to the grant of a usufruct property right for a maximum period of 100 years.\r\n\r\nArticle 6 of the New Resolution states that foreign nationals will be permitted to own a usufruct right over vacant land in Sharjah subject to the following preconditions, namely:\r\n<ul>\r\n 	<li>For foreign natural persons, such persons must hold a valid residency in UAE; and</li>\r\n 	<li>For foreign corporate entities, such entities must hold a valid commercial license in the UAE.</li>\r\n</ul>\r\nFurthermore, foreign investors under the New Resolution shall have the right to assign the usufruct right to a third party provided that such assignment does not exceed the original usufruct period registered at SRERD and subject to prior approval from SRERD.\r\n\r\n<strong>Implementation of the Usufruct</strong>\r\n\r\nArticle 9 of the New Resolution determines the usufruct title owner’s rights, and states as follows:\r\n\r\n“(a) The usufructuary shall be entitled to use and utilize the property subject matter of usufruct and annexes thereto like the way of owner’s utilization of his property, provided that he shall not violate conditions of the usufruct contract, and (b) the usufructuary shall be entitled to dispose of his usufruct right in all kinds of disposal without contradiction with the purpose allocated for the property subject matter of usufruct and annexes thereto, provided that the disposal may not exceed the usufruct period after approval of the Department.”\r\n\r\nThe usufructuary shall be entitled to all natural, industrial and civil benefits of the property subject to the usufruct, namely:\r\n<ul>\r\n 	<li>To personally enjoy the property without any limitations,</li>\r\n 	<li>To lease the property to any third party and to assign his usufructory rights over the real estate property to third parties. However, the assignment to the usufructory rights shall terminate upon the termination of the assigned usufruct right; and</li>\r\n 	<li>To make useful improvements or expenses for further benefits as the usufructuary deems fit (but without the right to radically change the structure or destroy it).</li>\r\n</ul>\r\nFinally, Article 10 of the New Resolution sets out the obligations of the usufructuary, summarized as follows:\r\n<ul>\r\n 	<li>Upon the expiry of the usufruct lease, the usufruct right will terminate and the foreign investor is to reinstate the property back to the original condition prior to the usufruct commencement, unless agreed otherwise by the usufruct parties.</li>\r\n 	<li>Foreign investors are restricted from disposing of the ownership of the property unless approved by SRERD, provided that the assignment of the usufruct right does not exceed the original usufruct period.</li>\r\n 	<li>Foreign investors are permitted to make any substantial or structural amendments to the property subject to the prior consent of the developer and the competent authorities.</li>\r\n</ul>\r\nArticle 7 of the Resolution provides that upon termination of the usufruct right, the licensed developer shall be entitled to recover the property, annexes and structures built on the land purchased by the usufructuary during the lease term.\r\n\r\n<strong>Is it Usufruct or Musataha? </strong>\r\n\r\nUsufruct is defined as the right to use and utilize a vacant plot, or a building on its present form, without having the right to dispose, reconstruct or demolish the existing building subject the 100 years lease. Whereas, the New Resolution allows the sale of property on a usufruct basis to foreign nationals with the right to construct over the property. In our opinion, the investor is effectively obtaining a Musataha right, Musataha refers to a right in rem conferring upon the owner thereof the right to build a building or to plant on the land of another. Strictly speaking, such arrangement is recognized at law as a Musataha rather than a usufruct right.\r\n\r\n<strong>Conclusion</strong>\r\n\r\nThe New Resolution was issued to augment investment in Sharjah, by offering foreign nationals the opportunity to obtain usufruct rights which can extend up to 100 years. The Property Department at Al Tamimi &amp; Company has worked on the first project which implemented the new usufruct system, which is located in a designated area in Sharjah, and assisted the developer with the drafting of the sale and purchase agreements for the sale of usufruct rights within the project. We are expecting supplementary resolutions and decrees to be issued, identifying the investment areas, and provide further rules in real property ownership for foreign nationals to encourage foreign investors to invest in the real estate market of Sharjah. Should you wish to further discuss the contents of this article, please feel free to contact any member of the Property Department.'),
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(93957, 5103, 'content_description', 'On 16 November 2014, H.H. Sultan bin Mohammed Al Qasimi, the Crown Prince in the Emirate of Sharjah, issued Executive Council Resolution No. 26 of 2014 Concerning the Usufruct of Real Estate Properties in the Emirate of Sharjah (the “New Resolution”). '),
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(93959, 5103, 'pageSummary', 'On 16 November 2014, H.H. Sultan bin Mohammed Al Qasimi, the Crown Prince in the Emirate of Sharjah, issued Executive Council Resolution No. 26 of 2014 Concerning the Usufruct of Real Estate Properties in the Emirate of Sharjah (the “New Resolution”).'),
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(93963, 5103, 'lawUpdateArticleNoWriters_0_lawUpdateAuthorName', 'Abdullah Khaled'),
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(93971, 5103, '_yoast_wpseo_metadesc', 'On 16 November 2014, H.H. Sultan bin Mohammed Al Qasimi, the Crown Prince in the Emirate of Sharjah, issued Executive Council Resolution No. 26 of 2014 Concerning the Usufruct of Real Estate Properties in the Emirate of Sharjah (the “New Resolution”).'),
(93972, 5104, 'content', 'March 2015\r\n\r\n<hr />\r\n\r\n<strong>Introduction</strong>\r\n\r\nThe Law explains the concept of ‘netting’ as a process of terminating, liquidating and/or  accelerating any payment or delivery obligations or entitlements between two parties under one or more qualified financial instruments (as explained below) entered into under a netting agreement or to which a netting agreement applies. This is done by calculating the net balance of close-out values and/or other relevant values in respect of such accelerated and/or terminated payment or delivery obligations or entitlements, either by operation of set-off or otherwise, to form a single value or netted amount payable between the parties. The goal in netting is to eliminate the number of required payments to be made under a series of transactions by offsetting the parties’ respective gains and losses, and provides for the net settlement of all obligations by way of a single currency payment by one party to the other.\r\n\r\nIt is common for jurisdictions with sophisticated financial markets to promulgate specific law to facilitate and provide certainty to netting transactions. The initiative on the part of the DIFC to implement a legal framework for netting is beneficial for banks and financial institutions that already frequently undertake various netting transactions. In the context of credit and operational risks, netting plays a vital role in mitigating the risks in the event of a “close out” (i.e. performance of an obligation following the occurrence of insolvency or an event of default as specified in the relevant agreement or agreements, including automatic termination and netting of all financial transactions between the parties). The DIFC becoming a netting-friendly jurisdiction means less capital exposure on the participants as payment will be calculated on a net basis rather than being grossed up for each individual transaction, and greater enforceability of the collateral arrangement in the event of a close-out. This should lead to an increase of business transactions in the DIFC.\r\n\r\n<strong>Application of the Law</strong>\r\n\r\nThe provisions of the Law apply to any qualified financial instrument, netting agreement or collateral arrangement (including any title transfer collateral arrangement) which is governed by DIFC law or which is entered into by a person incorporated or registered in the DIFC, irrespective of the date on which such qualified financial instrument, netting agreement or collateral arrangement was entered into. This wording suggests that the Law could be applied  retroactively to qualified financial instrument, netting agreement or collateral arrangement entered into prior to enactment of the Law.\r\n\r\nThe new Law sets out the following relevant concepts in relation to netting in the DIFC:\r\n\r\n(A)   Qualified Financial Instrument\r\n\r\nThe Law defines a “qualified financial instrument” as any financial agreement, contract or transaction pursuant to which payments or obligations are to be performed, or titles to certain commodities or assets are to be transferred, for consideration at certain agreed time or within a certain period of time whether or not subject to any condition or contingency, or pursuant to which obligations to make payments or deliveries or title transfer over commodities or assets are to be entered into or incurred.\r\n\r\nThe Law provides a non-exhaustive list of qualified financial instruments that derive value from underlying assets or commodities including, but not limited to, any asset such as currency, equity, index, interest rate, bond or debt security index, property index, and other forms of derivative products. Qualified financial instruments would also cover (without limitation) spot, future, forward or other securities or commodities transaction, commodities contract (i.e. commodities repurchase or reverse repurchase agreement, a commodities lending agreement or a commodities buy/sell back agreement), collateral agreement and/or any agreement, contract or transaction designated as such by the Dubai Financial Services Authority (DFSA), by written and published notice.\r\n\r\nNote that a qualified financial instrument will not include insurance or reinsurance contracts entered into by companies as part of their insurance business.\r\n\r\nIt is also interesting to note that Article 7 of the Law confirms that a qualified financial instrument will not be deemed void or unenforceable by reason of being, or having the characteristics of, a wager, lottery, gambling or gaming contract.  It may be noted that the UAE Penal Code which applies in the DIFC penalises any form of gambling or wagering in the UAE.  The enactment of the Law may alleviate the risk of any netting provision under any qualified financial instrument, netting agreement or collateral arrangement being characterised as gambling or wagering, however, this remains untested at present.\r\n\r\n(B)   Netting Agreement\r\n\r\nFor purposes of the Law, a netting agreement means:\r\n<ul>\r\n 	<li>any agreement between two parties that provides for netting of present or future payment or delivery of obligations or entitlements or obligations to make, receive or require payments or deliveries arising under or in connection with one or more qualified financial instruments entered into by the parties pursuant to a ‘master agreement’;</li>\r\n 	<li>any master agreement between two parties that provides for netting of the amounts due under two or more master netting agreements (i.e. a ‘master-master netting agreement’); and</li>\r\n 	<li>any collateral arrangement related to or forming part of one or more agreements referred to in paragraph (1) and (2) above.</li>\r\n</ul>\r\n(C)      Collateral Arrangement\r\n\r\nThe application of netting in accordance with the Law extends to any margin, collateral or security arrangement or other credit enhancement related to or forming part or a netting agreement or one or more qualified financial instruments entered into by the parties or to which a netting agreement applies, including but not limited to the following:\r\n<ul>\r\n 	<li>pledge, mortgage, charge or any other form of security interest or collateral, whether possessory or non-possessory;</li>\r\n 	<li>title transfer collateral arrangement; and</li>\r\n 	<li>(any guarantee, letter of credit or reimbursement obligation by or to a party in respect of one or more qualified financial instruments.</li>\r\n</ul>\r\nUnder the Law the realisation, appropriation and/or liquidation of collateral under a collateral arrangement shall take effect without any requirement of prior notice and consent between the parties unless otherwise agreed by them, and provided that such realisation, appropriation and/or liquidation of collateral is carried out in a commercially reasonable manner.\r\n\r\n<strong>Enforceability of Netting in Insolvency</strong>\r\n\r\nThe Law provides that it shall prevail in case of any conflict between the provisions of the Law and the DIFC Insolvency Law of 2009 or the Insolvency Regulations (excluding Section 7 (Financial Markets) of the Insolvency Regulations).\r\n\r\nPursuant to the Law the provisions of a netting agreement will be enforceable in accordance with its terms, including against an insolvent party, and where applicable, against a guarantor or any person providing security for the insolvent party. The provisions of a netting agreement will not be stayed, avoided or otherwise limited by:\r\n<ul>\r\n 	<li>the appointment of, or an application for the appointment of, a liquidator, or any action of a liquidator;</li>\r\n 	<li>any provision of law relating to bankruptcy, liquidation (including compulsory winding up proceeding), reorganisation, composition with creditors, receivership, conservatorship or any other insolvency proceeding to which a party to a netting arrangement may be subject; or</li>\r\n 	<li>any other provision of a law that may be applicable to an insolvent party.</li>\r\n</ul>\r\nThe Law confirms the effectiveness and enforceability of a netting agreement following the commencement of insolvency proceedings in relation to a party thereto. Notwithstanding the occurrence of any insolvency proceeding to which a party may be subject, the obligation of that party to make payments or deliveries under a qualified financial instrument, or to a transaction to which a netting agreement applies, will take effect in accordance with the terms thereof.\r\n\r\nThe Law further stipulates that the provisions of a netting agreement will not be affected by any applicable law limiting or prohibiting the exercise of the right to set off or net out obligations or payment of any such netted value between an insolvent party and the non-insolvent party. Therefore the Law permits set off even after one party to a netting agreement has been declared insolvent.\r\n\r\n<strong>Limitation on the powers of a Liquidator</strong>\r\n\r\nThe Law gives further preference to a party to whom payment is due under a netting transaction by limiting the powers of a liquidator in any insolvency proceeding to assume or repudiate contracts, transactions, claims or obligations in such a way that such powers will not prevent the close-out netting process under one or more qualified financial instruments or to which a netting agreement applies. The liquidator’s powers will only apply after the netting agreement has been given effect in accordance with its terms.\r\n\r\nMoreover the Law limits the liquidator’s ability to avoid, or render ineffective, certain payments, obligations or transactions of an insolvent party in the absence of clear and convincing evidence that the insolvent party made such payment, transfer, delivery, substitution or exchange or incurred such obligation or entered into such transaction with actual intent to deprive or defraud any person or other creditors of such insolvent party.\r\n\r\n<strong>Preemption </strong>\r\n\r\nThe Law provides that no stay, injunction, moratorium or similar order or proceeding issued by a court, administrative agency, liquidator or otherwise, shall limit or delay the application or performance of a netting agreement and the transactions contemplated there under or to which an otherwise enforceable netting agreement applies.\r\n\r\n<strong>Conclusion</strong>\r\n\r\nThe Law bolsters the effectiveness of a netting provision in any qualified financial instrument, or netting agreement that includes a collateral arrangement, and recognises the enforceability of such arrangement in the event of insolvency of a party. Its enactment has made DIFC a netting jurisdiction on par with other leading jurisdictions with sophisticated financial markets around the globe. The Law once again reaffirms the status of the DIFC as the leading financial hub in the region and underpins its objective to provide an attractive business environment in the regional financial market.\r\n\r\nCherry Ann Turcal is a member of the Banking and Finance Department in Al Tamimi &amp; Company’s DIFC office.'),
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(93976, 5104, 'content_description', 'On 14 December 2014 the DIFC Law No. 2 of 2014, or the “Netting Law of 2014” (the “Law”), came into force as a law in the Dubai International Financial Centre (“DIFC”) following its enactment on 7 December 2014 by His Highness Mohammed bin Rashid Al Maktoum, Ruler of Dubai.'),
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(93978, 5104, 'pageSummary', 'On 14 December 2014 the DIFC Law No. 2 of 2014, or the “Netting Law of 2014” (the “Law”), came into force as a law in the Dubai International Financial Centre (“DIFC”) following its enactment on 7 December 2014 by His Highness Mohammed bin Rashid Al Maktoum, Ruler of Dubai.'),
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(93994, 5104, '_yoast_wpseo_metadesc', 'On 14 December 2014 the DIFC Law No. 2 of 2014, or the “Netting Law of 2014” (the “Law”), came into force as a law in the Dubai International Financial Centre (“DIFC”) following its enactment on 7 December 2014 by His Highness Mohammed bin Rashid Al Maktoum, Ruler of Dubai.'),
(93995, 5105, 'content', 'March 2015\r\n\r\n<hr />\r\n\r\nThere have also been several drafts available for discussion. One draft came in with aggressive changes whereby the entire law was revamped and a totally new draft was presented. Another draft had major amendments and the third draft had only a facelift to the existing law.\r\n\r\nCurrently the Commercial Companies Law provides all the legal rules for the establishment of commercial companies, public companies (in conjunction with ESCA), and branches of foreign companies (or representative offices) in the UAE.\r\n\r\nWe understand that the new Commercial Companies Law is now in its final stage prior to being enacted by the UAE Federal Government. It looks like the UAE, rather than having to go through the process of revamping the entire law (which would have taken too long to achieve) has settled on amending and adding new provisions. The new law seeks to remedy issues which were problematic in its implementation under the older law, and to introduce new ideas.\r\n\r\nOne of the new ideas that is likely to be introduced by the law is that of allowing one person to own a limited liability company (“LLC”). Currently a minimum of two persons are needed to own an LLC established in the UAE and it has not been possible, other than in some free zones, to establish an LLC owned by one individual or one entity.\r\n\r\nMy understanding is that the UAE National Assembly has raised a few concerns about the existing draft but it is likely that the law will be enacted and if any changes are to be made to the law, it will be made as further amendments in the future. The Federal Government is keen to enact this law to deal with a number of urgent issues that are present in the existing law.\r\n\r\nAs regards the implementation of the law, there will still need to be cooperation between the Ministry of Economy (representing the Federal Government) and the Department of Economic Development in the concerned Emirate.\r\n\r\nHowever, almost the entire responsibility and jurisdiction for licensing and overseeing public companies, and to some extend private joint stock companies, has been given to ESCA. There will only need to be limited cooperation on the subject of trade name approval and activity approval with the Ministry of Economy and the Department of Economic Development in the concerned Emirate.\r\n\r\nA key question which always comes up is whether the UAE will allow foreigners to own more than 49% of a company incorporated in the UAE. This however will remain unchanged. Currently under the UAE Commercial Companies Law a foreigner can only own maximum of 49% of locally incorporated company, apart from companies incorporated in a free zone in which they can own 100%. However, free zone companies cannot trade within the United Arab Emirates and are limited to the areas within the free zone or trading with other countries.\r\n\r\nThere has been discussion on whether to allow foreigners to own a percentage higher than 49%, however the general attitude of the Federal Government towards this is to leave this matter to be regulated by another law - the Investment Law - which is currently being discussed by the Federal Government and is available in draft. The law does however provide an article which entitles the Federal Cabinet Ministers to exempt certain companies from the 51:49 arrangement and so it may be foreigners, in certain circumstances and upon the approval of the Cabinet of Ministers, can be granted the ability to own more than 49%. This can to be done by submitting an application to the Cabinet of Ministers and it is likely that in due course a process will be provided for such applications to be granted or rejected. It is likely permission will only be granted in exceptional limited circumstances.\r\n\r\nThere has not been much change in the setting up of branches of foreign companies or representative offices. Both still require a sponsor, or what they call a local agent, to license foreign companies to be established in the UAE. However the law emphasizes the exclusive jurisdiction of the Ministry of Economy and Commerce at the Federal level for license approval and renewal of branch of foreign companies. Currently most of the branch offices, unless given an exception from the Executive Office, are limited in their activities of promotion and representation, and no trading right is granted to branch offices. It is argued that from the new draft law it may be possible for the Ministry of Economy and the Executive Office at the relevant Emirates to grant certain branch offices the right to trade. This however, is not yet clear and if granted it is likely to be in very limited circumstances.\r\n\r\nThe law has provided more stringent and transparent requirements for accounting, corporate governance and the auditing process. This will apply to all companies, including limited liability companies. It is clear from the law that the legislator is intending to tighten the supervision and the accounting standards of companies throughout the UAE and provide for better corporate governance to an international level.\r\n\r\nOf course, companies and branch of foreign companies continue to benefit from the UAE’s no tax environment, and no tax or extra fees or charges will be levied on local companies or branches of foreign companies.\r\n\r\nThe law is expected to be enacted within the United Arab Emirates shortly and possibly before the summer of 2015. There are no major changes that current operating companies need to comply with or any deadlines to meet. It should prove to be a welcome revision of the UAE Commercial Companies Law.\r\n<div></div>'),
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(93572, 5083, 'content', 'February 2015\r\n\r\n<hr />\r\n<p class=\"MsoNormal\">As with the Dubai International Financial Centre (“<strong>DIFC</strong>”) ADGM will be a special free zone and will operating as a new jurisdiction carved out of the UAE and will not be subject to UAE civil and commercial law. English common law shall apply in and form part of the law of ADGM, with appropriate safeguards in order to ensure that any undesirable evolvement of the common law may be overridden by ADGM. This was not unexpected as it was commonly felt that ADGM would create a familiar legal environment for international banks and financial institutions.</p>\r\n<p class=\"MsoNormal\">From an employment perspective the Regulations closely follow those of the DIFC and as such differ in a number of significant areas from the UAE position (which we refer to as ‘onshore’ in this article).</p>\r\n<p class=\"MsoNormal\"><strong>The Key Points</strong></p>\r\n<p class=\"MsoNormal\"><strong>Overtime.</strong> The Regulations stipulate that the maximum working week is 48 hours “<em>unless the Employer has first obtained the Employee’s consent in writing</em>”. One would anticipate that employers would obtain this consent via the employment contract signed at the commencement of the relationship when the employee is unlikely to challenge it. There is no provision for overtime payment for hours worked in excess of 48 hours.</p>\r\n<p class=\"MsoNormal\"><strong>Annual leave.</strong> Employees are entitled to 20 working days annual leave (as opposed to 22 working days onshore) and are allowed to carry forward up to 20 working days into the next calendar year.</p>\r\n<p class=\"MsoNormal\"><strong>Maternity Leave</strong>. Employees are entitled to a minimum maternity leave of 65 working days of which the first 33 days are fully paid and the balance is paid at 50% normal rate. This contrasts with the onshore provision which is 45 calendar days paid maternity leave (which equates to 32 working days for those on a 5 day week).</p>\r\n<p class=\"MsoNormal\"><strong>Sick Leave.</strong> The very generous DIFC sick leave provisions are replicated in ADGM. An employee is entitled to 60 working days paid sick leave in any 12 month period. This contrasts with the onshore position where an employee is entitled to 90 calendar days sick leave (equating to 66 working days on a 5 day week basis) of which only one third is paid.</p>\r\n<p class=\"MsoNormal\"><strong>Discrimination.</strong> The Regulations prohibit an employer from discriminating against an employee on the grounds of sex, marital status, race, nationality, religion and mental/physical disability. However, in its draft form, the Regulations do not set out the remedies or potential penalties for acting in breach of these provisions or indeed any other provisions within the Regulations. ADGM has invited comments in relation to the best approach to deal with this aspect so presumably in its final form the Regulations will contain further detail.</p>\r\n<p class=\"MsoNormal\"><strong>Data Protection</strong>. There are minimal data protection requirements imposed on employers to ensure that employees’ data is (i) processed fairly, lawfully and securely, (ii) obtained and processed only for specified and lawful purposes, (iii) not excessive, (iv) accurate, and (v) not kept longer than necessary.</p>\r\n<p class=\"MsoNormal\"><strong>Probation period</strong>. An employer may place an employee on an initial probation period of 3 months which is extendable by another 3 months. This differs slightly from the onshore position (one period up to 6 months) and DIFC (which is silent on the issue of probationary periods albeit that they are routinely used).</p>\r\n<p class=\"MsoNormal\"><strong>Paternity Leave.</strong> For the first time in the UAE private sector, paternity leave of 5 working days is provided to employees in ADGM.</p>\r\n<p class=\"MsoNormal\"><strong>Right to a written contract.</strong> Employees may only be employed pursuant to a written contract which must be in English and signed by both parties. The contract must contain certain fundamental pieces of information such as salary, term, notice period, job title and so on.</p>\r\n<p class=\"MsoNormal\"><strong>End of service gratuity</strong> is calculated the same way as onshore however there is no reduction in gratuity where an employee with less than 5 years service resigns. Gratuity is not payable in cases of gross misconduct or where the employee elects to take a company pension instead.</p>\r\n<p class=\"MsoNormal\"><strong>Termination</strong></p>\r\n<p class=\"MsoNormal\">Significantly, there is no provision for compensation for unfair dismissal nor is there a requirement for an employer to follow established procedures for implementing dismissals. From an employer’s perspective this is highly attractive in that it obviously reduces liability and due process concerns.</p>\r\n<p class=\"MsoNormal\">Perhaps in an effort to provide a counter-balance for employees the minimum notice periods in ADGM are more generous for longer serving employees than onshore. For employees with 3 months to 5 years service the minimum notice is 30 days and for those with over 5 years service it is 90 days. The onshore equivalent is 30 days.</p>\r\n<p class=\"MsoNormal\">The employer may terminate for cause (without notice and without end of service gratuity) if the employee’s conduct is such that “<em>a reasonable employer would consider immediate termination to be warranted</em>”.</p>\r\n<p class=\"MsoNormal\"><strong>Post Termination Restrictions</strong></p>\r\n<p class=\"MsoNormal\">The effectiveness of post termination restrictions in the UAE has been debated for some time. Non-compete and non-solicitation clauses will potentially have more bite within ADGM in that the equitable remedy of injunctive relief should be available in the ADGM courts.  This will have the effect of potentially blocking a departing employee from securing employment with a competitor within ADGM until such time as the non compete is no longer applicable. It would also be open to an employer to claim damages for breach of these clauses. It will be interesting to see the interplay between the DIFC and ADGM jurisdictions on this front and whether either jurisdiction would enforce the restrictive covenant emanating from the other.</p>\r\n<p class=\"MsoNormal\"><strong>Employment Disputes</strong></p>\r\n<p class=\"MsoNormal\">It is proposed that a dedicated employment tribunal system will be established to deal with all employment cases arising in ADGM with its own discrete procedural rules. This should ensure that those adjudicating on employment disputes are specialised and experienced in that field, resulting in just outcomes and efficient case management which can only benefit employers and employees. The draft procedural rules will be submitted for public consultation in a similar manner to the Regulations. Prior to the establishment of that system the ADGM courts will handle any employment disputes.</p>\r\n<p class=\"MsoNormal\"><strong>Regulatory Transition</strong></p>\r\n<p class=\"MsoNormal\">One aspect of ADGM is the creation of a new jurisdiction but another aspect is the formation of a new regulatory body. Most employers currently based in the geographical area that will become ADGM are subject to the remit of the Ministry of Labour (“<strong>MOL</strong>”). Their employees have labour cards (work permits) and the employer is subject to MOL inspection and oversight. (There are some government owned entities in the area that are not under the remit of the MOL).</p>\r\n<p class=\"MsoNormal\">When the free zone is operational a transition process will occur whereby employers will get licensed by the ADGM free zone authority (“<strong>FZA</strong>”) and the employees will shift from onshore visas to free zone visas. From an employment law perspective this is a termination of one employment and commencement of another. Employers will need to consider how to deal with accrued benefits like end of service gratuity and annual leave. It is expected that most employers will seek to ‘roll over’ these accrued benefits to the new employment, which may be done subject to the correct agreements being in place.</p>\r\n<p class=\"MsoNormal\">Dependent visas will also have to be cancelled and reissued. Currently it is necessary to produce an Abu Dhabi tenancy contract to obtain a dependent visa in Abu Dhabi (but not for the employee’s visa) and it is not clear yet whether this will change under the new regime.</p>\r\n<p class=\"MsoNormal\">From an employer’s perspective the FZA will replace the MOL as the regulatory and oversight body. Generally speaking free zones are considered to be more relaxed about providing permission for hybrid working arrangements and short term working arrangements.</p>\r\n<p class=\"MsoNormal\">Most free zones have a mediation process (with differing levels of formality) that must be exhausted by the parties to an employment dispute before a party can file a case in court and it remains to be seen whether this is followed in ADGM.</p>\r\n<p class=\"MsoNormal\"><strong>UAE nationals</strong></p>\r\n<p class=\"MsoNormal\">There are explicit onshore requirements regarding the termination of UAE national employees- specifically the MOL must be consulted at least 30 days prior to the proposed dismissal of a UAE national and its approval for the dismissal must be obtained. These requirements will not apply in ADGM. The same considerations will apply in respect of nationals and non-nationals.</p>\r\n<p class=\"MsoNormal\"><strong>Emiratisation</strong></p>\r\n<p class=\"MsoNormal\">Certain onshore Ministerial Resolutions stipulate that a percentage (which varies between certain sectors) of a company’s workforce should be UAE nationals. There is presently no such requirement in ADGM.</p>\r\n<p class=\"MsoNormal\"><strong>Conclusion</strong></p>\r\n<p class=\"MsoNormal\">The Regulations are very employer friendly in that there is no provision for unfair dismissal compensation and employers are not required to follow established procedures for implementing dismissals. Furthermore the prospect of obtaining injunctive relief to enforce post termination restrictions is likely to be attractive to employers. The working hour arrangements, which oftentimes can represent a challenge for onshore employers, are also quite flexible.</p>\r\n<p class=\"MsoNormal\">From the employee perspective there are anti-discrimination and data protection provisions as well as more generous sick leave, maternity leave and also, for the first time in the UAE private sector, paternity leave. Furthermore there is no reduced gratuity where the employee resigns.</p>\r\n<p class=\"MsoNormal\">Overall the Regulations are likely to be welcomed by employers and without doubt they send out a powerful message that ADGM is open for business.</p>\r\n<p class=\"MsoNormal\">ADGM has invited comments from interested parties in relation to the Regulations. Al Tamimi &amp; Co held a client workshop to discuss the Regulations with a view to obtaining valuable front line feedback and will be submitting comments to ADGM. Thereafter we expect to see the final regulations published and will be in a position to provide an update at that time.</p>'),
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(100949, 5489, 'content', '<p class=\"p1\">Amongst various responsibilities, the DIFC Commissioner is charged with promoting, amongst data controllers in the DIFC, good practices and observance of the requirements of the DIFC Data Protection Law, and promoting greater awareness and public understanding of data protection. These activities can broadly be understood as the supervisory role of the DIFC Commissioner.</p>\r\n<p class=\"p1\"><span class=\"s1\"> In performing its supervisory role, the DIFC Commissioner balances the need to educate the DIFC community about data protection compliance with the practical reality of limited personnel and resources. Over the last few years, the DIFC Commissioner has performed this aspect of its role by way of various relatively low-profile exercises, including ‘supervisory visits’ and ‘notices to produce’. </span></p>\r\n<p class=\"p1\">The ‘supervisory visit’ scenario typically involves the DIFC Commissioner approaching entities licensed in the DIFC in order to arrange for a meeting at an appointed date. These meetings provide an opportunity for the review of documentation and processes relating to the processing of personal data, and appear more likely to be about ensuring a culture of awareness and compliance than being deeply forensic or judicial in nature.</p>\r\n<p class=\"p1\">The types of topics that the DIFC Commissioner might expect to address during a supervisory visit include:</p>\r\n<p class=\"p2\"></p>\r\n\r\n<ul>\r\n 	<li>a general description of the entity, the number of staff, locations in which it operates, and its area of business;</li>\r\n 	<li>details of the class of personal data the entity processes, the types of data subjects to which such data relates, and the purposes for which it is processed;</li>\r\n 	<li>details of the entity’s data protection policies and procedures (including aspects such as the level of security applied, whether disclosure is consistent with the purpose for which personal data was collected, and whether there are procedures for keeping personal data up-to-date);</li>\r\n 	<li>an explanation of any data protection training given to personnel, along with information on training materials and records of training conducted;</li>\r\n 	<li>details of any periodic reviews and audits of personal data held, to assist in complying with obligations under the DIFC Data Protection Law;</li>\r\n 	<li>details relating to the transfer of personal data to other jurisdictions outside the DIFC, and the grounds upon which such transfers are based; and</li>\r\n 	<li>any other background material that might be appropriate to demonstrate the entity’s compliance with the DIFC Data Protection Law.</li>\r\n</ul>\r\n&nbsp;\r\n<p class=\"p1\"><span class=\"s2\">In contrast to the supervisory visit approach, the ‘notice to produce’ scenario involves the DIFC Commissioner approaching entities licensed in the DIFC and directing them to provide greater detail on the substance of their data processing activities. In the past, this has involved what could broadly be described as a ‘bulk mail out’, whereby a significant number of entities (anecdotal reports indicate more than 100 in February 2016) received such letters, specifying a deadline by which they were required to provide a substantive response. </span></p>\r\n<p class=\"p1\">In both the supervisory visit scenario, and the notice to produce scenario, entities approached by the DIFC Commissioner often wonder why they have been singled out for attention. While we cannot be certain how the DIFC Commissioner identifies appropriate targets, the most obvious explanation appears to be irregularities with the content of the notifications previously filed by such entities with the DIFC Commissioner. (The filing of a notification of personal data processing activities is a requirement of all entities licensed in the DIFC, and this needs to occur at the time of initial licensing and at the time of each subsequent renewal, as well as at any time in the interim when the manner of processing changes from that already notified.)</p>\r\n<p class=\"p1\">Anecdotally, it would seem that the entities that received ‘notices to produce’ were entities that had previously advised the DIFC Commissioner, via their annual data processing notifications, that they were not processing any personal data in the course of their activities. (The likelihood of an entity not processing any personal data is very limited, so a ‘negative’ notification would likely benefit from closer scrutiny.) In the case of entities who were the targets of ‘supervisory visits’ by the DIFC Commissioner, such entities also appear to have had discrepancies in the content of their notifications that resulted in greater scrutiny being applied.</p>\r\n<p class=\"p1\"><span class=\"s2\"> There is a legal obligation on entities licensed in the DIFC to comply with the DIFC Data Protection Law. The ‘risk’ of coming to the attention of the DIFC Commissioner should not be the driver for compliance with the law, but in practical terms the DIFC Commissioner’s supervisory activities may well be a catalyst for many DIFC entities to review their data protection compliance obligations and make sure that everything is in order. The reality is that DIFC data protection notifications are, in many instances, not given appropriate attention and treated simply as a ‘box ticking’ exercise. We are aware of instances where poorly considered notifications have simply been renewed annually without any further thought.</span></p>\r\n<p class=\"p1\">To ensure compliance, we recommend that all entities operating in the DIFC undertake a full audit of their own personal data processing operations so as to ensure that they are compliant with DIFC Data Protection Law requirements, including with regard to the substance of their activities and with regard to the official notification that needs to be filed with the DIFC Commissioner.</p>\r\n<p class=\"p1\">The DIFC Data Protection Law provides for significant penalties for non-compliance. While the DIFC Commissioner appears, to date, to have been generous in focussing on developing a culture of awareness, there can be no guarantees that failure to comply will not result in penalties in appropriate circumstances.</p>\r\n<p class=\"p1\"><span class=\"s2\"> The Abu Dhabi Global Market (“ADGM”) has only recently been established, and the ADGM Data Protection Regulations only came into effect in October 2015. In this context, the ADGM Registrar is still at a very early stage in establishing processes, but in due course we would expect that it will also become active in ensuring that ADGM licensees comply with the data protection obligations imposed on them pursuant to the ADGM Data Protection Regulations.</span></p>\r\n<p class=\"p4\"></p>\r\n<p class=\"p5\">Al Tamimi &amp; Company’s Technology, Media &amp; Telecommunications team regularly advises on data and data protection issues throughout the Middle East, including in the Dubai International Financial Centre, the Abu Dhabi Global Market and Dubai Healthcare City. For further information please contact Nick O’Connell (n.oconnell@tamimi.com) or Sana Saleem (s.saleem@tamimi.com).</p>'),
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(100964, 5490, 'content', '<ul>\r\n 	<li>list a set of new corporate governance rules in accordance with, and to adhere to, the Federal Law No. (2) of 2015 on Commercial Companies (CCL); and</li>\r\n 	<li>repeal the UAE Ministerial Resolution No. (518) of 2009 Concerning Governance Rules and Corporate Discipline Standards (Repealed Governance Rules).</li>\r\n</ul>\r\n<p class=\"p4\">New provisions were also introduced under the New Governance Rules, that did not exist under the Repealed Governance Rules, such as the provisions related to Insiders Register, Confidentiality of Data &amp; Information, Conflict of Interest, Register of Related Parties, General Assembly Meetings, Capital Increase, Dividends Distribution, Investors Relation, and Obligations of the Auditor.</p>\r\n<p class=\"p1\">The purpose of this article is to compare the New and Repealed Governance Rules and highlight some of the provisions that we consider would benefit from clarification from SCA in relation to the following:</p>\r\n<p class=\"p5\"></p>\r\n\r\n<ul>\r\n 	<li>Definitions;</li>\r\n 	<li>Scope of Application and Enforcement; and</li>\r\n 	<li>Parent, Subsidiary and Allied Companies.</li>\r\n</ul>\r\n&nbsp;\r\n<p class=\"p7\">It is worth mentioning that any capitalised terms shall have the same meaning to those mentioned in the New Governance Rules.</p>\r\n<p class=\"p7\"><strong>Definitions</strong></p>\r\n<p class=\"p7\">In addition to the reference of the CCL, the New Governance Rules introduced the following new definitions that were not defined under the Repealed Governance Rules:</p>\r\n<p class=\"p9\"><em>“</em><strong><em>State</em></strong><em>”: The United Arab Emirates</em></p>\r\n<p class=\"p9\"><em> </em><em>“</em><strong><em>Government</em></strong><em>”: The Federal Government or any of UAE’s governments member to the federation in addition to any authority, entity, council, institution, body or public company wholly owned by any of them whether directly or indirectly.</em></p>\r\n<p class=\"p11\"><em>“</em><strong><em>Senior Executive Management</em></strong><em>”: The company’s executive management, including the general manager, executive director, chief executive officer, and managing director authorized by the Board Members to manage the Company, and their delegates.</em></p>\r\n<p class=\"p11\"><em>“</em><strong><em>Deals</em></strong><em>”: Transactions, contracts or agreements entered into by a public joint stock company that is listed in the market and do not fall under the main activity of such company or by way of including preferential terms that are not usually granted by the company to its clients, in addition to any other deals to be specified by SCA from time to time by virtue of a resolution, instruction or circulation issued thereby.</em></p>\r\n<p class=\"p11\"><em>“</em><strong><em>Remuneration</em></strong><em>”: The amounts received by the Company’s staff, employees or Board Members from the Company; i.e. salaries, bonuses, attendance bonus, transportation allowance, or any other allowances, benefits, and the like.</em></p>\r\n<p class=\"p1\">Other definitions had some amendments such as:</p>\r\n<p class=\"p10\"><em>“</em><strong><em>Executive Board Member</em></strong><em>”: Even though it may seem that the difference between the old and new definitions is immaterial, the new definition requires the Board Member to hold a position at the Company and to receive a monthly or annual salary from the Company to be considered as an Executive Board Member while the old definition requires either of them. Practically speaking, a Board Member shall not receive a salary from the Company unless he holds an executive position within the company to manage it.</em></p>\r\n<p class=\"p4\"><em>“</em><strong><em>Independent Board Member</em></strong><em>”: The new definition removed any reference to the disclosure obligations on the relatives of a Board Member towards the Company. The new definition has also referred the conditions under which a Board Member shall not be construed as an Independent Board Member to a separate article (Article 45) in the New Governance Rules while in the Repealed Governance Rules such conditions were listed in the definition itself.</em></p>\r\n<p class=\"p4\"><em>“</em><strong><em>Relatives</em></strong><em>”: The new definition added brothers and sisters to the definition of relatives.</em></p>\r\n<p class=\"p7\">On a further note, the definitions of “Parent Company”, “Subsidiary” and “Allied Company” were significantly amended as illustrated later in this article.</p>\r\n<p class=\"p1\"><span class=\"s2\"> As for the remaining definitions, they either have exactly the same meaning given to the terms defined under the Repealed Governance Rules or the meaning is substantially similar.</span></p>\r\n<p class=\"p8\"><span class=\"s1\"><strong>Scope of Application and Enforcement</strong></span></p>\r\n<p class=\"p7\">The New Governance Rules made it clear under Article 2 that the rules are subject to the provisions of the:</p>\r\n<p class=\"p2\"></p>\r\n\r\n<ul>\r\n 	<li>the CCL;</li>\r\n 	<li>Federal Law No. 10 of 1992 on Evidence in Civil and Commercial Transactions (“Evidence Law”); and</li>\r\n 	<li>Federal Law No. 11 of 1992 on Civil Procedure (“Civil Procedure Law”).</li>\r\n</ul>\r\n&nbsp;\r\n<p class=\"p4\">Although the Repealed Governance Rules are subject to same laws mentioned above by way of default, this was not explicitly mentioned.</p>\r\n<p class=\"p1\">The important difference in the scope of application and enforcement between the two rules is that the Repealed Governance Rules exempt banks and financing, investment, banking and financial intermediation companies that are subject to the control of the UAE Central Bank from the scope of its rules. The New Governance Rules on the other hand made the provisions of Part 1 - Corporate Discipline Standards (Articles 3 to 39) and Part 3 - General Provisions (Articles 53 to 55) applicable to the said companies but exempted them from the provisions of Part 2 - Corporate Governance (Articles 40 to 52).</p>\r\n<p class=\"p1\"><span class=\"s3\"> Exemption of foreign listed companies from the scope of application and enforcement continues to apply in the New Governance Rules.</span></p>\r\n<p class=\"p8\"><span class=\"s4\"><strong>Parent, Subsidiary and Allied Companies</strong></span></p>\r\n<p class=\"p1\"><span class=\"s5\">When comparing the definitions of “Parent Company” under the New and Repealed Governance Rules, it is notable that the new definition uses the term “juristic person” to expand the reach to all types of entities whether it is a company or not. The reason for using such term can be attributed to the fact that parent companies can be located in any jurisdiction worldwide which some of them will allow for different types of entities such as governmental entities or NGOs to carry out commercial activities and incorporate commercial companies permitting them to have control on other companies. It is worth mentioning that the new definition excludes natural persons from the scope of the definition.</span></p>\r\n<p class=\"p1\"><span class=\"s3\"> Another difference is that the old definition defines parent companies as companies that own 50% of another company. This definition raised confusion as to whether or not such shareholding is only limited to direct ownership. Another issue with the old definition is that some companies may own less than 50% of a listed company’s shares and yet have indirect control over that company (for example by getting its Subsidiaries to own shares of the listed company in which it control whereby each Subsidiary will own less than 50% of the controlled company yet together directly/indirectly own more than 50% in aggregate).The new definition resolved this confusion by considering a Parent Company to be the juristic person who have control to pass a resolution in a general assembly.</span></p>\r\n<p class=\"p1\"><span class=\"s5\"> Nevertheless, the new definition is not clear on whether the power to pass the resolution is limited or unlimited; i.e. is it enough in order to be considered as a Parent Company to have the power to pass a resolution in most general assemblies with restriction to some matters (such as liquidation) or it has to be an unlimited power to pass any resolution whatsoever. The articles of association of some companies may stipulate that some matters are reserved and have to be taken unanimously even though one partner may be controlling more than 90% of the shares whilst in other companies you will find that one shareholder will indirectly hold an unlimited power to pass any resolution whatsoever in a general assembly (whether directly or indirectly) even though his/her shareholding can sometimes be less than 50%. Our interpretation is that the new definition considers Parent Companies to be the companies that hold the power to pass a resolution in a general assembly in a majority of the matters discussed as the purpose of the New Governance Rules is to restrict the powers of those who have influence on a publicly listed company.</span></p>\r\n<p class=\"p1\"><span class=\"s5\"> As for “Subsidiary”, the new definition includes the power to appoint the board of directors. Therefore, a company can still be considered to be a subsidiary even it is not more than 50% owned by another company only if the other company has the power, whether directly or indirectly, to appoint all of its board of directors. Furthermore, and even though this is not mentioned in the definition, we believe that “the ownership of more than 50%” can be either direct or indirect since indirect ownership will still grant the owning company the power to act as a shareholder subject to one condition, namely; it must have full control over the company that divrectly own the shares thus enabling the indirect owner to have full powers to appoint the board of directors of the owned company.</span></p>\r\n<p class=\"p1\"><span class=\"s3\"> Regarding the definition of “Allied Company”, we consider that the new definition is a better definition since the terms “cooperation” and “coordination” used under the Repealed Governance Rules does not promote a company to be allied with another company unless one company owns shares of the other. It should be noted that the New Governance Rules defines an “Allied Company” as being “the company owned by another company by more than 25% and less than 50% of its capital”. We consider that restricting the minimum shareholding threshold to more than 25% in order to consider a company as an allied company is valid since 25% or less can be considered to be merely an investment with no actual control over the owned company. </span></p>\r\n<p class=\"p1\"><span class=\"s3\"> However, there is one area of confusion that arises in terms of whether owning just 50% still promotes the owning company to be an allied company or not. The new definition is vague on this point since the wordings consider Allied Companies as companies that are less than 50% owned by another company, while owning more than 50% will consider the owned company to be a Subsidiary. We believe that a company owning 50% of the shares of another company means that the owning company falls under the definition of an ‘Allied Company’ since the owning company has some control over the other company yet such control is not sufficient to pass a resolution at a general assembly meeting.</span></p>\r\n<p class=\"p1\"><span class=\"s3\"> Another question that may rise is whether or not to consider the company that owns only 25% of another company is an ‘Allied Company’ or not. Unfortunately, the current wordings of the new definition excludes such a company from the definition of ‘Allied Companies’ and it cannot be implied that it falls within the scope of such definition.</span></p>\r\n<p class=\"p1\"><span class=\"s3\"> In addition, as mentioned above in the paragraph related to the “Subsidiary”, the ownership can be either direct or indirect since indirect ownership will still grant the owning company the power to act as a shareholder subject to one condition which is to have full control over the company that directly own the shares.</span></p>\r\n<p class=\"p7\"><span class=\"s3\"> </span></p>\r\n<p class=\"p13\"><span class=\"s6\">This article is part one of a series of four articles with the other articles being published in subsequent editions of Law Update.</span></p>'),
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(100934, 5488, 'content', '<p class=\"p1\">The DIFC Electronic Transactions Law is primarily focussed on electronic contracts, electronic records, and electronic signatures. The purpose of the law is expressed as:</p>\r\n<p class=\"p2\"></p>\r\n\r\n<ul>\r\n 	<li>to facilitate electronic transactions in DIFC;</li>\r\n 	<li>to eliminate barriers to electronic transactions resulting from uncertainties over writing and signature requirements;</li>\r\n 	<li>to promote the development of the legal and business infrastructure necessary to implement secure electronic transactions in DIFC; and</li>\r\n 	<li>to help to establish uniformity of rules, regulations and standards in DIFC regarding the authentication and integrity of electronic records.</li>\r\n</ul>\r\n&nbsp;\r\n<p class=\"p4\"><span class=\"s1\">In its July 2016 public consultation paper, the DIFC Authority explained that it wanted to clarify that, from a DIFC law perspective, electronic signatures are enforceable, electronic records are of the same effect as hard copies, and references to writing include writing by electronic means. Agreements made electronically would be as valid as those signed with ‘wet ink’ signatures, and electronic documentation would be treated as equivalent to paper documentation.</span></p>\r\n<p class=\"p1\"><span class=\"s1\"> Electronic dealings, including dealings with the DIFC Authority, are already fairly common in the DIFC. By way of example, much of the DIFC company registration process, and associated licence renewal process, can be done on-line via the DIFC Authority’s portal. The DIFC Authority acknowledges that there is little benefit in insisting on paper when parties are comfortable dealing electronically, and technology can bring with it similar, or greater, certainty than paper and wet ink.</span></p>\r\n<p class=\"p1\"><span class=\"s1\"> With regard to electronic records, the DIFC Electronic Transactions Law provides that where any other DIFC law requires any record to be retained (or provides for certain consequences if it is not retained), that requirement is met by retaining the record electronically if certain conditions are satisfied. These conditions include: that the information contained in such record be preserved and capable of being reproduced in tangible form; that the record to be retained in the format in which it was originally created, generated, sent or received (or in a format that can be demonstrated to accurately replicate the information originally created, generated, sent or received); and that any details relating to the date and time, origin and destination and any sender or receiver be retained. Additionally, the law contemplates situations where authorities within the DIFC may specify compliance with certain other requirements relating to the retention of specific types of electronic records within their own areas of responsibility.</span></p>\r\n<p class=\"p1\"><span class=\"s1\"> In its public consultation paper, the DIFC Authority noted that the draft law does not differentiate between different standards of secure and non-secure electronic signatures. It observed that most international legislation that includes such differentiation tends to attribute a higher evidential weight to electronic signatures that apply specified security procedures implemented by designated third party providers. In taking this approach, the DIFC Authority has avoided unnecessarily complicating the issue and negated the need to become involved in assessing and regulating a ‘higher level’ of electronic signatures. </span></p>\r\n<p class=\"p1\"><span class=\"s1\"> In practical terms, prospective users of electronic signatures will, where circumstances require, be drawn towards electronic signatures that can be shown to utilise a higher level of technical security. Having a legislated certification process for ‘secure electronic signatures’ (as is the approach taken in the UAE Federal Electronic Transactions Law) would not change this. (In our experience, the ‘deemed reliability’ outcome of the approach contained in the UAE Federal Electronic Transactions Law does not have particularly strong appeal in the market, particularly where international technology providers offering electronic signature solutions with a very high level of technical security have been reluctant to have themselves licensed as Certification Service Providers in the UAE.)</span></p>\r\n<p class=\"p1\"><span class=\"s2\"> It should be noted that the DIFC Electronic Transactions Law contains significant exclusions in respect of the use of electronic records, electronic contracts and electronic signatures in the context of powers of attorney, wills and trusts, affidavits or affirmations and sale, purchase or long term lease of real property.</span></p>\r\n<p class=\"p1\"><span class=\"s1\"> The DIFC Electronic Transactions Law is intended to be a framework for the recognition of electronic transactions, so it does not provide for penalties or sanctions. Other laws, such as the UAE Cyber Crimes Law and the UAE Penal Code, provide for penalties in respect of cybercrime type issues that may arise in the context of electronic transactions, and the DIFC Contract Law 2004 provides for remedies in the case of a breach of contract.</span></p>\r\n<p class=\"p5\"><span class=\"s1\"> </span>Al Tamimi &amp; Company’s Technology, Media &amp; Telecommunications team regularly advises on electronic contracting, e-signatures, certification service provider issues, and other e-commerce related issues throughout the Middle East. For further information please contact Nick O’Connell (n.oconnell@tamimi.com) or Sana Saleem (s.saleem@tamimi.com).</p>'),
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(100925, 5487, 'pageSummary', 'The UAE Securities and Commodities Authority (“SCA”) has recently released Chairman Resolution No. 9 R.M. of 2016 (Concerning the Regulation on Mutual Funds) (“New Fund Regulations”). '),
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(100908, 5486, 'content_description', 'In April 2015, FIFA undertook a complete overhaul of the rules governing football agents (now called intermediaries). The FIFA Players’ Agents regulations were replaced with the FIFA Regulations on Working with Intermediaries. '),
(100909, 5486, '_content_description', 'field_59b641c07f473'),
(100910, 5486, 'pageSummary', 'In April 2015, FIFA undertook a complete overhaul of the rules governing football agents (now called intermediaries). The FIFA Players’ Agents regulations were replaced with the FIFA Regulations on Working with Intermediaries. '),
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(100918, 5486, '_yoast_wpseo_metadesc', 'In April 2015, FIFA undertook a complete overhaul of the rules governing football agents (now called intermediaries). The FIFA Players’ Agents regulations were replaced with the FIFA Regulations on Working with Intermediaries.'),
(100919, 5487, 'content', '<p class=\"p1\"><span class=\"s1\">The New Fund Regulations have been long-awaited and have replaced both the Board of Directors Resolution No. 37 of 2012 (Concerning the Regulation of Mutual Funds) (“2012 Fund Regulations”) and the Board of Directors Resolution No. 13 of 2013 (on Amending the Regulation of Investment Funds) (the “Private Placement Exceptions” and together with the 2012 Fund Regulations, the “Former Regulations”). The New Fund Regulations were published in the UAE Federal Gazette dated 31 July 2016 and are currently in force. We note that SCA has also recently circulated certain draft regulations for review and comment which will also be of relevance to fund regulation in the UAE. Accordingly, we note that the New Fund Regulations will need to be read in conjunction with any applicable resolution, regulation, directive or circular issued by SCA from time to time, including those in relation to the arranging and promoting of financial products and securities. </span></p>\r\n<p class=\"p1\">Similar to the 2012 Fund Regulations, the New Fund Regulations include provisions on licensing, management, offer document requirements, subscription, and issuance and listing of fund units. However, the New Fund Regulations also feature some changes to the Former Regulations, including the introduction of provisions for specialized categories of funds, such as umbrella and feeder funds. While the majority of these changes will largely affect UAE domiciled funds, there are new provisions that will also affect foreign funds. This article covers some of the key aspects of the New Fund Regulations.</p>\r\n<p class=\"p2\"><strong>Foreign Funds</strong></p>\r\n<p class=\"p2\">The New Fund Regulations greatly simplify the requirements for the promotion of foreign funds in the UAE. The seven articles (containing twenty-two clauses) under the 2012 Fund Regulation have been pared down to just one article (of five clauses), perhaps reflecting that most foreign funds are currently promoted on a cross-border basis or under the private placement exceptions. Both the 2012 Fund Regulations and the New Fund Regulations only relate to the promotion of a foreign fund in the UAE through a local distributor who has a duty to register the fund with the SCA and comply with certain requirements. The New Fund Regulations essentially pare the requirements down to requiring registration of a foreign fund and annual renewal of registration where a local distributor is used.</p>\r\n<p class=\"p1\"><span class=\"s3\"> That said, promoters of foreign funds should note that the private placement exceptions under the New Fund Regulations have been narrowed in scope. Under the Former Regulations, the 2012 Fund Regulations did not apply in respect of the private promotion of foreign funds targeting:</span></p>\r\n<p class=\"p4\"></p>\r\n\r\n<ul>\r\n 	<li>federal or local government financial portfolios;</li>\r\n 	<li>companies, institutions or entities trading on their own account whose main purpose, or one of their main purposes, is to invest in securities; and</li>\r\n 	<li>investment managers who have a discretionary investment mandate.</li>\r\n</ul>\r\n&nbsp;\r\n<p class=\"p6\">This position has changed as the exception to promotion of foreign funds is now limited only to federal or local government authorities. It is also important to note that where the Former Regulations are silent on reverse solicitation, the New Fund Regulations explicitly provide that the New Fund Regulations shall not apply to reverse solicitations. While the New Fund Regulations do not grant express permission for short marketing visits to the UAE in relation to such reverse solicitations, the current understanding is that such visits will be tolerated. However, care should still be taken over activities while physically in the UAE so as to avoid being deemed to be “conducting business” in the UAE, which would itself require licensing.</p>\r\n<p class=\"p2\"><strong>Legal Form</strong></p>\r\n<p class=\"p2\">The New Fund Regulations have eliminated the ambiguity and uncertainty that has been associated with the legal form of a fund. Under the 2012 Fund Regulations, there are certain provisions which imply that the governance of the fund will be subject to similar rules as a corporate entity (i.e. meetings of unit holders, liquidation etc.). The New Fund Regulations go further and clarify that investment funds are to be treated as corporate persons and this also includes provisions setting out the terms of expiry of such corporate personality. This is further supported by UAE Federal Law No 2 of 2015 (governing commercial companies in the UAE) which, unlike its predecessor, specifically provides for the establishment of investment funds under the rules and regulations of SCA and recognises such funds as a separate legal entity.</p>\r\n<p class=\"p1\">The New Fund Regulations also contain express provisions in relation to the assets of investment funds. In particular, the New Fund Regulations provides that the assets of investment funds will guarantee the rights of the unit owners and that such assets cannot be mortgaged, lent, attached or disposed of for the fulfilment of any obligations to a third party. This coupled with the clarification on the legal form should provide some comfort for investors in such funds as it supports the notion that the assets of such investment funds are separate from the assets of its fund managers. Accordingly, the assets of an investment fund, and the associated rights of unit owners, should not be jeopardised by the insolvency of its fund manager.</p>\r\n<p class=\"p2\"><strong>Regulatory Oversight </strong></p>\r\n<p class=\"p2\">The UAE financial regulatory landscape has undergone some changes since 2010 when the UAE Central Bank (“Central Bank”) and SCA entered into an arrangement to determine the responsibilities of each regulator relating to particular financial activities. The changing dynamics between the Central Bank and SCA were made apparent in the 2012 Fund Regulations which delineated the roles of each regulator and a handover of funds regulation in the UAE from the Central Bank to SCA. However, under the 2012 Fund Regulations the Central Bank continues to play a regulatory role in the oversight and inspection of local funds in relation to their financial position which has not been adopted in the New Fund Regulations. In this regard, the New Fund Regulations appears to reflect the culmination of the changing relationship between the Central Bank and SCA as full responsibility for the control and inspection of funds now rests with SCA.</p>\r\n<p class=\"p2\"><strong>Other Highlights</strong></p>\r\n<p class=\"p2\">The New Fund Regulations introduce the concepts of feeder funds and umbrella funds. Under the New Fund Regulations, a feeder fund is a public investment fund or part of a group of funds for an umbrella fund which invests at least 85% of its assets in the units of a public master fund or foreign public fund and is excluded from investing in negotiable securities and certain other investments determined by SCA. An umbrella fund is also a public investment fund but one whose investment policy is represented in establishing affiliate sub-funds.</p>\r\n<p class=\"p1\">SCA has also released Chairman Resolution No. 10 R.M. of 2016 (Concerning the Fees of Mutual Fund Regulation) (“Fees Resolution”) which is also now in force. The Fees Resolution sets out the fees payable for both registration and licensing of investment funds and for the annual renewal of such registration and licensing.</p>\r\n<p class=\"p2\"><strong>Conclusion</strong></p>\r\n<p class=\"p2\">The New Fund Regulations will certainly have an impact on both the establishment of local investment funds and the marketing and promotion of foreign funds in the UAE. Such institutions will need to re-evaluate their current practices in order to ensure compliance with the New Fund Regulations, noting that the penalties for non-compliance include suspension or cancellation of the relevant license, registration or approval.</p>'),
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(100904, 5486, 'content', '<p class=\"p1\"><span class=\"s1\">FIFA removed a system that was primarily based on the qualification, recognition and registration of a certain limited number of agents and replaced it with a system whereby the barriers to entry were lowered but the scrutiny on specific transactions conducted using intermediaries was increased. The new regulation issued a set of guidelines to be implemented at the national level by football associations across the globe. Whilst these regulations proved controversial at the time, it attempted to bring about a uniform set of minimum standards to be applied across the board, with particular focus on disclosure and transparency in transactions and dealing with conflicts of interest.</span></p>\r\n<p class=\"p2\"><strong>UAE FA Guidelines</strong></p>\r\n<p class=\"p2\">The UAE Football Association (“UAE FA”) adopted the guidelines on 30th June 2015 (“Guidelines”) and a summary of the key points of the Guidelines relating to the UAE are described below:</p>\r\n<p class=\"p2\"><em>Article 1 – Definition of an Intermediary</em></p>\r\n<p class=\"p2\">Article 1 broadly defines an intermediary as a person (natural or corporate) who (i) represents players or clubs in negotiations with the goal of signing an employment contract between them, or (ii) represents clubs in relation to discussions with the goal of entering into transfer or loan agreements.</p>\r\n<p class=\"p1\"><em>Article 2 - Implementation of the Regulation </em></p>\r\n<p class=\"p1\">The Regulations apply to the clubs and players using the intermediary’s services.</p>\r\n<p class=\"p1\"><span class=\"s3\"> Article 2 goes on the state that the implementation of the Regulations or any amendment shall not prejudice the validity of an employment contract or Transfer or Loan agreement. </span></p>\r\n<p class=\"p1\">Generally, in terms of the employment contract, FIFA’s Professional Football Player Contract Minimum Requirements should be taken into account although these are subject to mandatory local law provisions. In relation to player contracts in the UAE, they are in fact subject to UAE Labour Law.</p>\r\n<p class=\"p1\"><em>Article 3 – General Principles</em></p>\r\n<p class=\"p1\">Article 3 of the Regulations sets out general principles which include a requirement that an intermediary must be registered in accordance with the Guidelines and that players and clubs, when choosing their intermediaries must show ‘best effort attempts’, which means that clubs and players must use their best efforts to make sure that the intermediary engaged signs a representation agreement between them.</p>\r\n<p class=\"p2\"><em>Article 4 – Registration of Intermediaries</em></p>\r\n<p class=\"p2\">This article states that the intermediary is required to record every transaction and that the clubs or players using intermediaries must submit the intermediary’s registration and any other documents in relation to every transaction carried out using the intermediary. Therefore, the UAE FA is required to implement a registration system for intermediaries, who must be registered for each transaction that they are involved in. This attempts to allow for increased tracking of intermediary activities.</p>\r\n<p class=\"p1\"><em>Article 5 - Requirements and Conditions for Registration</em></p>\r\n<p class=\"p1\">Even though no formal qualification is now required for an individual to be an intermediary, there are still minimum conditions in force which need to be met before an intermediary can be registered in the UAE and registration would still be subject to the UAE FA’s approval.</p>\r\n<p class=\"p1\">To be registered the applicant must:</p>\r\n<p class=\"p4\"></p>\r\n\r\n<ul>\r\n 	<li>present a Good Conduct Certificate</li>\r\n 	<li>have a license to be an intermediary and must have permanent residence.</li>\r\n 	<li>be a national, except for non-national intermediaries who must be registered with their local federations.</li>\r\n 	<li>have at least 5 years experience in the sport.</li>\r\n 	<li>adhere to signing all document required by these rules</li>\r\n 	<li>not have any affiliation with the national federation or regional federations since this would lead to a conflict of interest.</li>\r\n</ul>\r\n&nbsp;\r\n<p class=\"p1\"><em>Article 6 – Fees</em></p>\r\n<p class=\"p1\">These fees are not set out in FIFAs regulations and are left to national federations to determine.</p>\r\n<p class=\"p1\"><span class=\"s3\"> In relation the UAE, the Regulations deals with fees to be paid to the UAE FA, which states that the intermediary must: </span></p>\r\n\r\n<ul>\r\n 	<li>pay a fee of AED 20,000 annually.</li>\r\n 	<li>pay 5% of their fee for each transaction to the UAE FA if they have a local office, otherwise they must pay 10%.</li>\r\n</ul>\r\n<p class=\"p1\"><em>Article 7 – Conditions of the Agreement</em></p>\r\n<p class=\"p1\"><span class=\"s4\">This article addresses the minimum conditions relating to the scope of the intermediary’s services and which must be included in the representation agreement between the intermediary and the club or player. These conditions include:</span></p>\r\n<p class=\"p5\"></p>\r\n\r\n<ul>\r\n 	<li>setting out the legal nature of parties relationship;</li>\r\n 	<li>setting out details of the contract which, at a minimum must contain the names of the parties, description of the intermediary’s services, the term, fees, general terms for payment, date of the agreement and termination provisions. The agreement must also be properly signed by the parties; and</li>\r\n 	<li>The intermediary must disclose his contract for every transaction.</li>\r\n</ul>\r\n&nbsp;\r\n<p class=\"p1\"><em>Article 8 – Disclosure of Information </em></p>\r\n<p class=\"p1\">In general:</p>\r\n<p class=\"p4\"></p>\r\n\r\n<ul>\r\n 	<li>players and clubs must declare to the UAE FA all details of fees or payments paid or to be paid to the intermediary.</li>\r\n 	<li>players and clubs must, at the request of the UAE FA provide all contracts and agreements signed with the intermediary, for investigation purposes.</li>\r\n 	<li>all contracts stated in paragraph 2 above must be provided together with the employment contract or transfer contract, for the player’s registration.</li>\r\n 	<li>all employment contracts and transfer agreements must contain the name and signature of the intermediary, in addition to a statement if there is no intermediary.</li>\r\n 	<li>The UAE FA shall at the end of May each year via its electronic platform, tally all the names of registered agents and transactions participated in. Then it will announce the total fees and payments made to them.</li>\r\n 	<li>The UAE FA must look into all transactions that are not in adherence with these rules.</li>\r\n</ul>\r\n&nbsp;\r\n<p class=\"p6\">It is interesting to note that there is a requirement that a player and a club using an intermediary report that fact to the UAE FA on a transaction-by-transaction basis, along with all financial details. This attempts to deal with FIFA’s concern regarding transparency of transactions.</p>\r\n<p class=\"p1\">Prior to the implementation of the FIFA rules it was believed that at an international level (not necessarily relating to the UAE), there had long been an under-reporting of agent involvement in international transfers. This has occurred for reasons of confidentiality, to disguise side-agreements and incentives, to avoid administrative compliance, to reduce timelines for deal-making and numerous additional reasons.</p>\r\n<p class=\"p1\"><em>Article 9 – Payments to Intermediaries</em></p>\r\n<p class=\"p1\">This important article deals with intermediaries’ remuneration. The Regulations state that:</p>\r\n<p class=\"p4\"></p>\r\n\r\n<ul>\r\n 	<li>the fee collected by the intermediary for a player or club shall not exceed 3% of the total monthly salary of the player for the entire term of the employment contract.</li>\r\n 	<li>the intermediary’s fee where it represents a club in a transfer or loan shall not exceed 3% of total salary of a player for the entire period of the employment contract.</li>\r\n 	<li>the intermediary who represents a club is entitled to an advance fee prior to completion of the service, which shall be incorporated and taken into account into the total 3% to be collected.</li>\r\n 	<li>the clubs shall not make player transfer payments or loan payments via the intermediaries or to them and must not ask that payments relating to players are made to the intermediary.</li>\r\n 	<li>in accordance with paragraph 6 of Article 9 and subject to Article 10, the intermediary must be paid immediately after the performance of its service.</li>\r\n 	<li>after completion of a contract between the club and player and if incorporated into the terms agreed between the player and its intermediary, a payment may be made via the intermediary.</li>\r\n 	<li>directors/managers are not permitted to receive any payment from the intermediary and any such breach will lead to disciplinary measures.</li>\r\n 	<li>clubs and player shall not pay any fees to the intermediary if the player is incapacitated in some way as per the rules of transfer of players.</li>\r\n</ul>\r\n&nbsp;\r\n<p class=\"p6\"><span class=\"s5\">It is interesting to note that when adopting the FIFA guidelines the UAE FA went a step further in relation to commission fees earned by an intermediary. The FIFA guidelines made a recommendation that fees paid to intermediaries are limited to 3% of the player’s basic gross income or of the transfer compensation. The UAE FA’s Regulations however, made it a mandatory requirement to limit intermediaries to 3% commission on the fixed salary of a player. Compliance with the Regulations is at odds with the previous practice (a default 3% unless otherwise specified in the contract) and a broadly accepted international expectation that agents could anticipate a commission between 5%-10% as well as a percentage of transfer fees. </span></p>\r\n<p class=\"p1\">It is important to note that the FIFA guidelines clearly state that any payments made to intermediaries acting on behalf of minor players are strictly prohibited.</p>\r\n<p class=\"p1\"><em>Article 10: Conflict of Interest</em></p>\r\n<p class=\"p1\">FIFA had a significant concern that on an international basis there were increased conflict of interest issues with player transfers. The UAE Guidelines state that:</p>\r\n<p class=\"p4\"></p>\r\n\r\n<ol>\r\n 	<li>players and clubs must ensure there is no conflict of interest before using an intermediary.</li>\r\n 	<li>there shall be no conflict of interest where an intermediary has beforehand declared his actual or potential conflict, and the other parties have agreed in writing to let him proceed in the negotiations.</li>\r\n 	<li>if the player or club wants to complete a transaction in line with Article 2 above, they must state in writing their consent beforehand and disclose the identity of the party that will be paying the fee to the intermediary. The parties must also inform the UAE FA and submit all written documents during registration in accordance with the Regulations.</li>\r\n</ol>\r\n&nbsp;\r\n<p class=\"p1\"><em>Article 11: Disciplinary Measures</em></p>\r\n<p class=\"p1\">Disciplinary measures can apply to the following offences by an intermediary:</p>\r\n<p class=\"p4\"></p>\r\n\r\n<ul>\r\n 	<li>if any false information is presented to the UAE FA in breach of the Regulations or if there are any breach of the Regulations;</li>\r\n 	<li>breach of obligations under the contract;</li>\r\n 	<li>inducement of a player to end the contract or breach it; and</li>\r\n 	<li>breach of the provisions of the Regulations or articles of association of the UAE FA or regulations of the UAE FA or its circulars, or the non-fulfilment of obligations in relation to decisions made.</li>\r\n</ul>\r\n&nbsp;\r\n<p class=\"p6\">The sanctions against an intermediary include one or a combination of the following:</p>\r\n<p class=\"p4\"></p>\r\n\r\n<ol>\r\n 	<li>written warning;</li>\r\n 	<li>fine of AED 20,000 - AED 100,000;</li>\r\n 	<li>temporary cancellation of a license;</li>\r\n 	<li>permanent cancellation of a license; and</li>\r\n 	<li>ban from participating in any football activity.</li>\r\n</ol>\r\n&nbsp;\r\n<p class=\"p6\">In addition, each player or club in violation of the Regulations will be disciplined in accordance with the Regulations of the UAE FA. The Regulations provide for a committee to be set up to look into any alleged breaches.</p>\r\n<p class=\"p3\"><span class=\"s2\"><strong>Overview</strong></span></p>\r\n<p class=\"p1\">With the Intermediaries Regulations, FIFA has delegated responsibility for managing the regulations and increasing transparency of matters relating to intermediaries to over 200 national associations. FIFA has attempted to implement a uniform set of standards across the different federations, as in the past there were differing standards and qualifications relating to football agents. The range of enthusiasm, resources and motivations for implementing the regulations across those national associations varies widely. While the electronic transfer management system (“TMS”) provides a platform for transparency, only fully declared and disclosed agent activity and documentation is entered and only keen management, oversight and enforcement by national associations can make the system work effectively. By adoption and implementation, the UAE FA has implemented the Regulations but the new system is just a year in process. To date there are only six registered intermediaries on the UAE FA website and the level of reported transfer activity is unclear. It therefore remains to be seen over the next few years how the Regulations are adopted and administered.</p>\r\n<p class=\"p7\">Raj Pahuja (r.pahuja@tamimi.com) is Head of Corporate Commercial in the firm’s Bahrain office (previously working with the firm in the UAE) and a key member of Al Tamimi’s dedicated Sports and Events Management practice. He has previously acted for the Bahrain International Circuit for several years advising on various aspects, including the F1 Grand Prix. Raj has also advised on the inaugural and subsequent Dubai Tours Cycle Race and in relation to a T20 cricket tournament.</p>'),
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(100864, 5484, 'content_description', 'In 2013, the Abu Dhabi Government established the Abu Dhabi Global Market (“ADGM”), an international financial free zone in the heart of the UAE’s capital city. ADGM is comprised of three authorities, including the Abu Dhabi Global Market Courts (“ADGM Courts”). The ADGM Courts have recently commenced operations. The purpose of this article is to briefly introduce readers to the composition, structure and functioning of the ADGM Courts.'),
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(100866, 5484, 'pageSummary', 'In 2013, the Abu Dhabi Government established the Abu Dhabi Global Market (“ADGM”), an international financial free zone in the heart of the UAE’s capital city. ADGM is comprised of three authorities, including the Abu Dhabi Global Market Courts (“ADGM Courts”). The ADGM Courts have recently commenced operations. The purpose of this article is to briefly introduce readers to the composition, structure and functioning of the ADGM Courts.'),
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(100876, 5484, 'lawUpdateArticleNoWriters_0_lawUpdateAuthorName', 'Malak Nasreddine'),
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(212307, 5478, '_yoast_wpseo_metadesc', 'The lack of legislation addressing mixed-use projects (a single project that has both residential units and commercial units) has hampered the progress of such projects.'),
(100885, 5485, 'content', '<p class=\"p1\">Treasury shares are the portion of shares that a company keeps in its own treasury. They may have come from a re-purchase or buyback from shareholders, or they may have never been issued to the public in the first place. Treasury shares do not pay dividends, have no voting rights and should not be included in shares outstanding calculations.</p>\r\n<p class=\"p1\"><span class=\"s1\"> The concept of treasury shares is an accounting concept and the debate over how to treat them goes back for decades. In 1946, the California Law Review published an article by Henry W. Ballantine entitled ‘The Curious Fiction of Treasury Shares’. Ballantine is quoted as saying: ‘<em>Treasury shares are indeed a masterpiece of legal magic, the creation of something out of nothing. They are no longer outstanding shares in the hands of a holder.</em>’</span></p>\r\n<p class=\"p1\"><span class=\"s1\"> Under Decree No. 287 of 2016 Promulgating the Executive Regulation of Law No.1 of 2016 Promulgating the Companies Law (‘Companies Law’), the Kuwaiti legislator has defined treasury shares as: “<em>the shares acquired and resold by the company and used on its issued shares traded in the stock exchange within the limit of the decreed percentage</em>”. However, the Kuwaiti legislator did not address treasury shares in the Companies Law with any deeper or clearer research.</span></p>\r\n<p class=\"p1\"><span class=\"s1\"> In November 2015, the Kuwaiti legislator issued the new executive bylaws by way of Law No. 7 of 2010 Regarding the Establishment of the Capital Markets Authority and Regulating Securities Activities and its Amendments (‘Executive Bylaws’), which define treasury shares as a company’s shares which the issuing company re-purchases or buys back or otherwise makes use of. At this time, the legislator devoted a full chapter clarifying and regulating treasury shares and stipulated that such provisions shall apply to public and closed shareholding companies, except that units subject to the supervision of the Central Bank shall be excluded.</span></p>\r\n<p class=\"p1\"><span class=\"s1\"> The Executive Bylaws limit the use of treasury shares to the following cases: </span></p>\r\n<p class=\"p2\"></p>\r\n\r\n<ul>\r\n 	<li>Maintaining stability of the company’s share price;</li>\r\n 	<li>Reduction of the company’s paid-up capital;</li>\r\n 	<li>Settlement of a company’s account receivables;</li>\r\n 	<li>Repayment of a company’s outstanding debt;</li>\r\n 	<li>Distribution of bonus shares to shareholders without an increase of the capital or the number of shares issued;</li>\r\n 	<li>Swap deals in the event of merger with or an acquisition offer of other companies;</li>\r\n 	<li>Distribution of all or some of the treasury shares to the company’s workers in the context of the employees’ share option plans conditional upon the general assembly’s approval, and in accordance with the regulatory rules approved by the general assembly of the company; and</li>\r\n 	<li>Other cases determined by the Capital Markets Authority (CMA).</li>\r\n</ul>\r\n&nbsp;\r\n<p class=\"p4\"><span class=\"s1\">Furthermore, the Executive Bylaws stipulate that unlisted companies may not dispose of shares in the circumstances set out at (1), (3) and (4) above. </span></p>\r\n<p class=\"p1\"><span class=\"s2\"> One of the most significant issues in this regard is that the percentage of shares owned by the company and its subsidiaries may not exceed 10% of the total of the number of shares issued by the company. Moreover, the Executive Bylaws set out the guidelines, procedures and accounting treatment of treasury shares and provide that the constitutional documents of the company shall state that, at most, 10% of the issued shares of the company may be purchased at their market value and that partners may not purchase or sell the company’s shares unless they obtain the written approval of the CMA, which is given pursuant to an application submitted to the CMA.</span></p>\r\n<p class=\"p1\"><span class=\"s1\"> In addition to the above, the Executive Bylaws include obligations on companies listed with the Kuwait Stock Exchange and stipulate that listed companies may not deal in shares thereof through financial derivatives. Any deals in shares must take place in accordance with the rules applicable on the exchange. Cases specified at (3), (4), (5), (6) and (7) above, and other cases approved by the CMA, shall be excluded. Furthermore, listed companies shall disclose the CMA’s approval for purchasing or selling treasury shares upon issuance and in accordance with the provisions and procedures stated in Module No. 10 (Disclosure and Transparency) of the Executive Bylaws and a listed company shall not deal in shares for 10 business days before disclosing its financial statements (reviewed quarterly financial statement or audited annual financial statements) or any other significant information that may affect the value of the company’s shares.</span></p>\r\n<p class=\"p1\"><span class=\"s1\"> In conclusion, treasury shares do not have voting rights or dividend rights. In addition, a company may only acquire the number of shares which equals or is less than 10% of its issued share capital according to the market value of the company’s shares and it may acquire its shares only if the company’s memorandum and articles of association provide that it may do so. Furthermore, a company wishing to buy or sell treasury shares must seek and obtain the approval of the CMA. It is worth noting that a sale or purchase by the company of its treasury shares can only be effective upon approval by the company’s general assembly and, in the event that the sale of the treasury shares is to particular shareholders, those shareholders are prohibited from participating in any general assembly vote. Finally, it is important to note that all shareholding companies have an obligation to report and disclose treasury shares issues to the CMA. </span></p>'),
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(100859, 5483, '_yoast_wpseo_metadesc', 'This article offers an insight into the reoccurring issues of time, payment, performance bonds and termination which we regularly encounter when arbitrating construction disputes involving the FIDIC Red Book1 in the UAE.'),
(100860, 5484, 'content', '<p class=\"p1\"><strong>Overview</strong></p>\r\n<p class=\"p1\"><strong> </strong>The ADGM Courts are common-law courts, based on the English court system. They form part of both ADGM and the Abu Dhabi judicial system. The Courts adjudicate civil and commercial disputes. The ADGM Courts thus offer a common law system in the midst of a predominantly civil law Middle East region. Moreover, English law will be directly applicable in the ADGM, making the ADGM the first jurisdiction in the Middle East to directly apply English law.</p>\r\n<p class=\"p1\">The ADGM Courts are located in the ADGM Building in Al Maryah Island, Abu Dhabi, although sittings and any other business may be conducted in any place in the world, i.e., hearings are not limited to the ADGM hearing rooms. Hearings may be conducted by video conference and will be available for real time viewing in ADGM Courts’ hearing rooms. This allows ADGM judges to manage cases with greater flexibility, expeditiously, efficiently and economically. ADGM Court hearings are fully open to the public; however, all arbitration-related proceedings are to be heard in closed court (unless all parties agree otherwise, or the Court is satisfied that the proceeding ought to be heard in open court).</p>\r\n<p class=\"p1\">The ADGM Courts are accepting cases electronically since becoming operational. The electronic and physical infrastructures for the conduct and hearing of cases are close to being finalised.</p>\r\n<p class=\"p2\"><strong>ADGM Court Structure</strong></p>\r\n<p class=\"p2\">The ADGM Courts are comprised of a Court of First Instance and a Court of Appeal. The Court of First Instance consists of a Civil Division, Employment Division and Small Claims Division.</p>\r\n<p class=\"p3\"><span class=\"s2\"><strong>Legal Framework</strong></span></p>\r\n<p class=\"p1\">The ADGM Courts’ legal framework comprises the ADGM Courts’ Regulations, a single unified statute, which are complemented by the ADGM Court Rules (“Rules”) and Practice Directions. The Rules comprise the Division and Jurisdiction Rules, ADGM Court Procedure Rules, Certification of Enforcement Agents Rules, Taking Control of Goods and Commercial Rent Arrears Recovery Rules, Judicial Discipline Prescribed Procedure Rules, Judicial Conduct Rules, and Rules of Conduct.</p>\r\n<p class=\"p3\"><span class=\"s2\"><strong>Judges of the ADGM Courts</strong></span></p>\r\n<p class=\"p1\">The Judges of the ADGM Courts are drawn from around the world and led by the Chief Justice of ADGM Courts, Lord Hope of Craighead KT.</p>\r\n<p class=\"p1\">The ADGM Courts Judges are the Right Honourable the Lord Mark Saville of Newdigate PC, the Honourable Kenneth Hayne AC, the Right Honourable Sir Peter Blanchard KNZM, William Stone SBS QC, and the Honourable Lord McGhie (who will preside over the Small Claims Division). The judges have significant experience in England &amp; Wales, Scotland, Australia, New Zealand and Hong Kong. The judges may sit both in the Court of First Instance and the Court of Appeal. They may also act as arbitrators under ADGM’s arbitration framework. ADGM Judges are required to be independent and impartial.</p>\r\n<p class=\"p1\"><span class=\"s4\"> In addition to the foregoing judicial appointments, ADGM has appointed Linda Fitz-Alan as Registrar of the ADGM Courts in 2015. She was previously CEO and Principal Registrar of the Supreme Court of New South Wales. </span></p>\r\n<p class=\"p3\"><span class=\"s2\"><strong>Jurisdiction of the ADGM Courts</strong></span></p>\r\n<p class=\"p1\"><em>Court of First Instance</em></p>\r\n<p class=\"p1\">The Court of First Instance has jurisdiction over matters relating to:</p>\r\n\r\n<ul>\r\n 	<li>Civil or commercial cases and disputes involving</li>\r\n</ul>\r\n&nbsp;\r\n<ul>\r\n 	<li>\r\n<ul>\r\n 	<li>the ADGM;</li>\r\n 	<li>any of ADGM’s Authorities (which are the ADGM Registration Bureau, the Financial Services Regulatory Authority, and the ADGM Courts); or</li>\r\n 	<li>any company or entity which is registered and licensed to operate within the ADGM;</li>\r\n</ul>\r\n</li>\r\n</ul>\r\n&nbsp;\r\n<ul>\r\n 	<li>Lawsuits and civil or commercial disputes arising out of or relating to</li>\r\n</ul>\r\n&nbsp;\r\n<ul>\r\n 	<li>\r\n<ul>\r\n 	<li>a contract or a transaction conducted in whole or in part in the ADGM; or</li>\r\n 	<li>to an incident that occurred in the ADGM;</li>\r\n</ul>\r\n</li>\r\n</ul>\r\n&nbsp;\r\n<ul>\r\n 	<li>Any appeal against a decision or a procedure issued by the ADGM Authorities; and</li>\r\n 	<li>Any request which the ADGM Courts has the jurisdiction to consider under the ADGM Regulations.</li>\r\n</ul>\r\n<p class=\"p7\"><span class=\"s1\">In relation to the matters specified in (1.) and (2.) above, parties may specify in their commercial contracts and transactions that they agree to ‘opt out’ of the ADGM jurisdiction, and instead choose any other jurisdiction or agree to refer their disputes to arbitration. Conversely, parties with no nexus to the ADGM can also ‘opt in’ to the ADGM jurisdiction. </span></p>\r\n<p class=\"p1\"><em>Civil Division</em></p>\r\n<p class=\"p1\">The Civil Division has jurisdiction over cases where the claim exceeds USD100,000. It also hears appeals in relation to judgments of the Small Claims Division and reviews decisions of the ADGM Authorities.</p>\r\n<p class=\"p1\">The Civil Division does not have jurisdiction over any claim or dispute:</p>\r\n<p class=\"p4\"></p>\r\n\r\n<ol>\r\n 	<li>Where the value of the claim or dispute is, or is less than, USD100,000;</li>\r\n 	<li>Arising out of or in connection with family proceedings; and</li>\r\n 	<li>Relating to employment matters.</li>\r\n</ol>\r\n&nbsp;\r\n<p class=\"p1\"><em>Small Claims Division</em></p>\r\n<p class=\"p1\">The Small Claims Division has exclusive jurisdiction over:</p>\r\n\r\n<ul>\r\n 	<li>Claims and disputes with a value of USD100,000 or less;</li>\r\n 	<li>Disputes falling within Employment Division jurisdiction, where all parties have agreed in writing that the relevant claim or dispute is to be heard in or determined by the Small Claims Division.</li>\r\n</ul>\r\n<p class=\"p2\"><em>Employment Division</em></p>\r\n<p class=\"p1\">The Employment Division of the Civil Division has exclusive jurisdiction over claims and disputes:</p>\r\n\r\n<ul>\r\n 	<li>Relating to the enforcement of rights and obligations under the Employment Regulations; and</li>\r\n 	<li>For the enforcement of any claim relating to employment matters other than the enforcement of any right or obligation under the Employment Regulations 2015.</li>\r\n</ul>\r\n<p class=\"p7\">The Employment Division does not have jurisdiction over any claim or dispute relating to the Civil and the Small Claims Divisions.</p>\r\n<p class=\"p2\"><em>Court of Appeal</em></p>\r\n<p class=\"p1\"><span class=\"s5\">The Court of Appeal has jurisdiction (a) to consider appeals made against judgments or decisions issued by the Court of First Instance, and (b) to interpret any articles of the ADGM laws and regulations. There is no automatic right to appeal in respect of judgments issued by the Civil and Employment Divisions. A party must apply for permission to appeal the judgment, either to the Court of First Instance or Court of Appeal. In the case of a judgment issued by the Small Claims Division, an appeal can only be made on a question of law. The Court of Appeal’s judgments are final and may not be appealed. </span></p>\r\n<p class=\"p1\"><strong>Types of cases the ADGM Courts may and may not hear</strong></p>\r\n<p class=\"p2\">The ADGM Courts will hear the following types of cases:</p>\r\n<p class=\"p4\"></p>\r\n\r\n<ul>\r\n 	<li>Commercial and contract disputes;</li>\r\n 	<li>Tort cases;</li>\r\n 	<li>Personal injury cases;</li>\r\n 	<li>Judicial review cases; and</li>\r\n 	<li>Application relating to the recognition and enforcement of arbitral awards.</li>\r\n</ul>\r\n&nbsp;\r\n<p class=\"p7\">The jurisdiction of the ADGM Courts is, of course, not unlimited. ADGM Courts <em>cannot</em> hear:</p>\r\n\r\n<ul>\r\n 	<li>Criminal cases;</li>\r\n 	<li>Family cases (i.e. matters relating to divorce, guardianship, alimony, personal status, and inheritance which are matters governed by Sharia).</li>\r\n</ul>\r\n<p class=\"p3\"><span class=\"s2\"><strong>Relief available to parties</strong></span></p>\r\n<p class=\"p1\">The ADGM Courts may order a range of effective remedies in respect of disputes falling within their jurisdiction:</p>\r\n<p class=\"p4\"></p>\r\n\r\n<ul>\r\n 	<li>The Courts have the power to order injunctions to restrain parties from acting in a position, in relation to which they are not entitled to act. The Court of First Instance may grant specific performance.</li>\r\n 	<li>The Court may award damages in addition to, or in substitution for, an injunction or specific performance.</li>\r\n 	<li>The Courts may appoint a receiver. The power to appoint a receiver by way of equitable execution will operate in relation to all legal estates and interests in real property.</li>\r\n 	<li>The Courts may order debtor-specific remedies. The Court may order goods to be returned to the debtor, or order an enforcement agent to pay damages for loss suffered by the debtor.</li>\r\n 	<li>The Courts have the power to grant relief against forfeiture for non-payment of rent.</li>\r\n 	<li>The Courts can order damages for personal injuries.</li>\r\n 	<li>In judicial review cases, the ADGM Courts may order mandatory, prohibiting or quashing orders, a declaration, or an injunction to restrain parties from acting in offices in which they are not entitled to act. (The Courts can also award damages, restitution or the recovery of a sum due.)</li>\r\n</ul>\r\n&nbsp;\r\n<p class=\"p3\"><span class=\"s2\"><strong>Rights of audience before the ADGM Courts</strong></span></p>\r\n<p class=\"p1\">Any person may have a right of audience and appear before the Small Claims Division of the Court of First Instance, but such appearance is subject to compliance with the rules of conduct of the Courts.</p>\r\n<p class=\"p1\">Otherwise, in order to appear before the ADGM Courts, one must be a lawyer who has been practising for a continuous period of at least 5 years prior to appearing before the Court. Lawyers who have been banned or suspended as a result of disciplinary proceedings do not enjoy a right of audience. ADGM Courts have not instituted a registration system of legal practitioners as a pre-requisite for a right of audience, as is the case for the Dubai International Financial Centre Courts.</p>\r\n<p class=\"p3\"><span class=\"s2\"><strong>Online Services</strong></span></p>\r\n<p class=\"p1\">Parties will be assisted with the ADGM Courts’ electronic services, as soon as the e-services become fully implemented. ADGM Courts will offer a range of electronic services, including e-filing, e-case management and e-trials. ADGM Court e-services will include (a) e-filing for all documents, and the ability to conduct payments online, (b) communication between parties and ADGM Courts, and allowing lawyers to track their cases, and (c) e-trials, with access to electronic documents, audio visual remote connections, real time transcript and research capability.</p>'),
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(100841, 5483, 'content_description', 'This article offers an insight into the reoccurring issues of time, payment, performance bonds and termination which we regularly encounter when arbitrating construction disputes involving the FIDIC Red Book1 in the UAE. '),
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(100797, 5481, 'content_description', 'When it comes to resisting the enforcement of an award in the UAE, a common defence is that the Defendant was not a party to the arbitration agreement because the person who signed on its behalf did not have the required authority to bind the company to arbitration.'),
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(100817, 5481, '_yoast_wpseo_metadesc', 'When it comes to resisting the enforcement of an award in the UAE, a common defence is that the Defendant was not a party to the arbitration agreement because the person who signed on its behalf did not have the required authority to bind the company to arbitration.'),
(100818, 5482, 'content', 'October 2016\r\n\r\n<hr />\r\n<p class=\"p1\">Indeed, in December 2015 the press reported that the Supreme Judicial Council had removed several court experts from its approved experts list due to the delays in cases assigned to them and further, a few have been referred to the Public Prosecution to be questioned in respect of alleged wrongdoing and dereliction of duty.</p>\r\n<p class=\"p1\">This article considers recent litigation which has offered the prospect of quicker access to justice for parties in Qatari litigation disputes.</p>\r\n<p class=\"p1\">Historically, the Qatari courts, when faced with matters of a technical nature or a requirement to deal with voluminous documentation as typically associated with construction disputes, will usually issue a preliminary judgment to appoint an expert to meet the parties, study the subject matter and write a report with their findings. At that stage, the parties have the right to object to the report and the court may send the file back once again to the expert if it finds that the objections raised by the parties need to be addressed. Eventually once the court is satisfied with the final report it will rely heavily upon it in making its determination. Furthermore, even in simple and direct monetary claims, the Qatari courts have tended to refer such cases to an expert.</p>\r\n<p class=\"p1\">This prolonged process takes approximately 6 to 18 months. As a result, it can financially debilitate businesses due to the uncertainty caused by the overhanging litigation.</p>\r\n<p class=\"p1\"><span class=\"s1\"> However, in two recent cases before the civil and commercial court circuits in Qatar’s Court of First Instance, a new and potentially significant approach has developed which has reduced the time taken for the issuance of a judgment. </span></p>\r\n<p class=\"p1\">Both cases involved monetary claims and resulted in the issuance of a judgment within a period of less than four months from the date that the claim was filed. In both cases, the Court reached its decision without the appointment of an expert.</p>\r\n<p class=\"p1\">It is necessary to briefly consider each case in order to further analyse this alternative approach taken by the Qatari Courts.</p>\r\n<p class=\"p1\">The first case involved a subcontractor’s claim for QAR 6 million against a main contractor in respect of unpaid dues arising from the full execution of the contract.</p>\r\n<p class=\"p1\">The Court found in favour of the Claimant (the sub-contractor) on three findings:</p>\r\n\r\n<ul>\r\n 	<li>The document submitted by the Claimant established a contractual relationship between the parties.</li>\r\n 	<li>The Claimant carried out the agreed works as contracted.</li>\r\n 	<li>The Respondent admitted the debt in writing.</li>\r\n</ul>\r\n&nbsp;\r\n<p class=\"p3\"><span class=\"s2\">Further, it should be noted that the Respondent, which had been served duly with the case summons, did not appear to refute the claims. </span></p>\r\n<p class=\"p1\"><span class=\"s3\"> The second case involved a seller’s claim of unpaid instalments (in addition to the remaining purchase price pre-matured due to the buyer’s failure). The Court based its judgment on the following findings:</span></p>\r\n\r\n<ul>\r\n 	<li>The document submitted by the Claimant established the contractual relationship between the parties.</li>\r\n 	<li>The buyer failed to pay his dues and thus a breach of the contract was established.</li>\r\n 	<li>The buyer and guarantor’s failure to appear to refute the claim with a sound defence.</li>\r\n</ul>\r\n&nbsp;\r\n<p class=\"p3\">In summary, these two claims were both monetary claims and similarities were present as noted by the reasons founded upon by the Court in its respective judgments.</p>\r\n<p class=\"p5\"><span class=\"s4\"><strong>What does the future hold?</strong></span></p>\r\n<p class=\"p6\">As set out, for many parties excessive delay is the most worrisome issue in civil and commercial litigation in Qatar with the preliminary appointment of a court appointed expert appointment being highlighted as one, if not the major exacerbating factor.</p>\r\n<p class=\"p1\">The recent case developments give some encouragement to the prospect that the appointment of an expert (and the associated delay) can be avoided at least in some cases.</p>\r\n<p class=\"p1\">In order to try and avoid the appointment of an expert, litigants ought to provide all relevant documentation related to the matter to their lawyers for consideration.</p>\r\n<p class=\"p1\">It goes without saying that the Court is much more likely to fast track a decision without the reliance of a court appointed expert in circumstances where a claim is supported by clear and convincing evidence and observance with the other governing rules and procedures that the Court requires.</p>\r\n<p class=\"p1\"><span class=\"s3\"> Furthermore, it should be borne in mind that even in complex contractual claims, an explicit or implied admission may be considered as conclusive evidence and a determinative factor. In the event of such an admission, the prospect of the judgment being issued without the appointment of an expert will certainly be increased. </span></p>\r\n<p class=\"p1\">Where possible, it is to be hoped that procedural delays will be avoided and that the Qatari Courts will continue to issue judgments without recourse to court appointed experts.</p>\r\n<p class=\"p1\"><span class=\"s3\"> Our Qatari litigation practice at Al Tamimi can assist with all enquires related to these developments. For further information please do get in touch.</span></p>'),
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(100822, 5482, 'content_description', 'In general, cases of a commercial nature lodged at the Qatar civil and commercial Court of First Instance usually take around 1 to 2 years for judgment to be issued. This inefficacy and delay are attributed mainly to court proceedings, and, in particular expert appointment and time spent by the expert to present his report. '),
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(100837, 5483, 'content', 'October 2016\r\n\r\n<hr />\r\n<p class=\"p1\"><strong>Introduction</strong></p>\r\n<p class=\"p2\">Internationally, the FIDIC forms of contract are the most widely used standard forms for construction and engineering projects.<sup>2</sup> Whilst this success can be attributed to a number of factors, the most prominent is down to the support by the World Development Bank.<sup>3</sup></p>\r\n<p class=\"p1\">In terms of FIDIC’s history, the 1st Edition was published in 1957. The FIDIC 1st Edition was based upon the ACE form of contract which was itself based on the ICE 4th Edition (an English civil engineering contract).<sup>4</sup> The FIDIC 2nd Edition was published in 1969. The 3rd Edition was issued in 1977, and the FIDIC 4th Edition was issued in 1987. In 1999 FIDIC published its ‘Rainbow Suite’ of contracts, which included, along with the FIDIC Red Book, the Yellow Book (Design and Build), the Silver Book (EPC) and the Green Book (Short Form). Other forms followed by way of the Red Book Subcontract (2002), the Pink Book (MDB) (2004), the Blue Book (Dredging) 2006 and the Gold Book (DBO) in 2008. In 2000 FIDIC published an extremely useful Contracts Guide.<sup>5</sup></p>\r\n<p class=\"p1\"><span class=\"s2\"> The Rainbow Suite was drafted to create a more balanced allocation of risk between the parties, though, of course, different forms of contract seek to allocate risk in differing proportions, e.g. the Silver Book shifts the majority of risk and responsibility onto the Contractor with little involvement by the Employer during the project execution phase. Users of the Pink Book will be aware of its subtle but important differences with the Red Book (e.g. sub-clauses 2.5, 3.1, 3.5, 4.2, 8.1, 12.3, 15.6, 17.6, 20.1 and 20.6).<sup>6</sup></span></p>\r\n<p class=\"p1\">The FIDIC Red Book comprises a set of General Conditions (with 20 main clauses), Particular Conditions (prepared on a project-by-project basis) and an Appendix to Tender (which includes crucial contract data). Whilst FIDIC contemplates the execution of a formal Contract Agreement, the contract between the parties in the Red Book will actually be made by way of the issue of a Letter of Acceptance. In the Silver Book a contract is concluded by way of execution of a Contract Agreement.</p>\r\n<p class=\"p3\"><span class=\"s1\"><strong>Time</strong></span></p>\r\n<p class=\"p1\">In terms of time, sub-clause 8.2 of the FIDIC Red Book makes it clear that the Contractor must complete the Works by the Time for Completion, the latter being stated in the Appendix to Tender. The Contractor’s progress will be monitored against its baseline programme and any updated/revisions thereto.<sup>7</sup> The Particular Conditions may prescribe the level of detail and format required of the Contractor’s programme. Once it has started the Works the Contractor must then proceed with ‘due expedition and without delay’.<sup>8</sup> As part of its monthly reporting obligations set out in sub-clause 4.21, the Contractor must provide information on all matters likely to affect the progress of the Works so that all concerned parties can identify potential problems and deal with them accordingly.</p>\r\n<p class=\"p1\">If during the course of the Works the Contractor believes that it is entitled to an extension of time for one of the grounds listed in sub-clause 8.4 it is required to make a claim pursuant to sub-clause 20.1 within 28 days of becoming aware of the delay event.<sup>9</sup> To the extent that the Engineer believes that the Contractor’s progress is too slow to meet with the Time for Completion then, pursuant to sub-clause 8.6, the Engineer may issue a notice for the Contractor to speed up its rate of progress. The Contractor should be aware that failing to act upon a sub-clause 8.6 notice could ultimately lead to an Employer termination pursuant to sub-clause 15.2(c)(i).</p>\r\n<p class=\"p1\">Following receipt of a claim for an extension of time the Engineer is required to follow the process prescribed in sub-clauses 20.1 and 3.5 to make a ‘fair’ determination as to the Contractor’s entitlement.<sup>10</sup> To the extent that the Contractor is not awarded an extension of time then it will be liable for delay damages for the late completion of the Works pursuant to sub-clause 8.7. Difficulties often arise when the Contractor believes it has been wrongly denied an extension of time and is subsequently issued with a sub-clause 8.6 notice.</p>\r\n<p class=\"p1\">Ultimately, the Works will be complete when a Taking-Over Certificate has been issued under Clause 10.<sup>11</sup> Determining whether the Works are ready for taking over will be a matter of fact for the Engineer to decide on.<sup>12</sup></p>\r\n<p class=\"p3\"><span class=\"s1\"><strong>Payment</strong></span></p>\r\n<p class=\"p1\">In terms of payment, the FIDIC Red Book is a remeasurable contract. Whilst the payment process is briefly described below, it should be noted that if certain conditions are not met then the process can be derailed.</p>\r\n<p class=\"p1\">The Contractor will submit monthly applications (i.e. statements).<sup>13</sup> The Engineer will, following an evaluation carried out pursuant to sub-clause 12.3, issue an Interim Payment Certificate within 28 days thereof<sup>14</sup> and the Employer should make payment within a further 56 days.<sup>15</sup> Within 84 days of the issuance of the Taking-Over Certificate the Contractor will submit its Statement at Completion<sup>16</sup> and the Engineer will issue a Payment Certificate accordingly. 56 days after receiving the Performance Certificate the Contractor will submit its Application for Final Payment Certificate.<sup>17</sup> To the extent that the Engineer agrees with this Application,<sup>18</sup> the Contractor will issue its Final Statement for the agreed amount along with a written discharge<sup>19</sup> following which the Engineer will issue a Final Payment Certificate. Importantly, if the Employer fails to pay on time against a certified amount then the Contractor will be entitled to finance charges,<sup>20</sup> and possibly to terminate.<sup>21</sup></p>\r\n<p class=\"p1\">Clause 13 defines what will constitute a Variation and also prescribes how a Variation is to be dealt with and valued.</p>\r\n<p class=\"p1\">To the extent that the Contractor believes it is entitled to additional payment (there can sometimes be a dispute as to what is meant by ‘additional’) then it is required to make a claim in accordance with sub-clause 20.1. The time bar provision included within this particular sub-clause has been the subject of numerous articles over the years and its applicability in the UAE remains a hot topic.</p>\r\n<p class=\"p1\">The FIDIC Red Book caters for Provisional Sums, though such work will only be carried out if instructed by the Engineer.<sup>22</sup></p>\r\n<p class=\"p1\">Crucially from the Contractor’s perspective (who may be tendering for large construction or engineering projects), sub-clause 14.2 allows for an Advance Payment to be made. The Contractor will be required to provide a guarantee for this Advanced Payment and the Employer will claw this money back incrementally via interim payment certificates.</p>\r\n<p class=\"p1\">An often overlooked provision of the FIDIC Red Book is the ability of the Contractor to request that the Employer provides reasonable evidence of its financial arrangements. During periods of economic downturn this could be a useful tool for the Contractor. Contractors should be wary of an Employer who wishes to have this sub-clause deleted.</p>\r\n<p class=\"p3\"><span class=\"s1\"><strong>Performance Bonds</strong></span></p>\r\n<p class=\"p1\">Ever since the global financial crisis hit Dubai in late 2008 there has been a propensity for calls to be made against ‘on-demand’ Performance Bonds (‘PB’).</p>\r\n<p class=\"p1\">Sub-clause 4.2 provides (paraphrasing) that a Contractor must provide a PB within 28 days of receiving the Letter of Acceptance, usually for 10% of the Accepted Contract Amount.</p>\r\n<p class=\"p1\"><span class=\"s2\"> Sub-clause 4.2 prescribes the circumstances under which an Employer may make a demand on the PB: (i) a failure by the Contractor to extend the period of validity of the PB; (ii) a failure by the Contractor to pay an amount due to the Employer; (iii) failure by the Contractor to remedy a default; and (iv) where the Employer has grounds to terminate (importantly, the Employer need not actually terminate). </span></p>\r\n<p class=\"p1\">The sub-clause itself is silent as to what form a PB should take and that is a matter of separate negotiation but the FIDIC Red Book does provide a template. The wording of the PB itself needs to be carefully considered because the agreed version may actually contain pre-conditions to making a demand. The FIDIC template includes optional wording that the PB will expire upon the issuance of a Taking-Over Certificate; however, it is quite usual in the UAE for the period of validity of the PB to be extended through to the issuance of a Performance Certificate.<sup>23</sup> Difficulties for the Contractor often arise when a Performance Certificate is never issued or there is no fixed period for the PB.</p>\r\n<p class=\"p1\"><span class=\"s3\"> However, and quite often in the UAE, the Employer often forgets (or ignores) that it has a duty to account for the monies called under a PB. The Employer would do well to remember the penultimate paragraph of sub-clause 4.2 whereby the Employer provides the Contractor with an indemnity for any claim made on the PB which it was not entitled to make. In practice, if the Employer makes a call for the full amount of a PB during the Defects Notification Period when it has already taken over the Works and is operating the same for its intended purpose, the Contractor will often seek to rely on arguments under the UAE Civil Code to challenge the validity of the call, including, amongst other things, that the demand was an unlawful exercise of a contractual right (Article 106) or made contrary to good faith (Article 246(1)). </span></p>\r\n<p class=\"p1\">Given the importance of this issue, the process and implications of making a call on the PB are considered in more detail below.</p>\r\n<p class=\"p1\">Firstly, the Employer will make a demand on the bank which provided the PB. For tactical reasons this demand is often made so that the bank has as little time as possible to inform the Contractor, and at an inconvenient time so that the Contractor struggles to engage lawyers to prevent the bank from paying out on the PB.</p>\r\n<p class=\"p1\">Notwithstanding that a call on the PB has been made and that it should be paid out immediately it can sometimes take up to 2 or 3 weeks for a bank to release the money.</p>\r\n<p class=\"p1\">Once it has been notified by the bank that the Employer has made a call on the PB the Contractor will almost certainly apply for an attachment order (the equivalent of a freezing order injunction).<sup>24</sup> The Contractor’s application is made <em>ex parte</em>. It is quite usual for the attachment to be granted at this first <em>ex parte</em> hearing.<sup>25</sup> Often, the first time the Employer becomes aware of the attachment is when it receives notice that its bank account has been frozen.</p>\r\n<p class=\"p1\">Once the attachment has been granted the Contractor is required to commence proceedings for the main dispute within 8 days of the attachment,<sup>26</sup> and if it does not do so the attachment will be dismissed.<sup>27</sup> However, the commencement of proceedings for the main dispute within this 8 day period can be problematic for the Contractor if the main contract includes for arbitration and there are pre-conditions to commencing arbitration (e.g. a dispute first has to be referred to a Dispute Adjudication Board).</p>\r\n<p class=\"p1\">At the first <em>inter partes</em> court hearing after the Contractor has filed a claim for the main dispute the court will normally join the attachment order proceedings to the main proceedings.</p>\r\n<p class=\"p1\"><span class=\"s4\"> As one would expect, and so as not to undermine the status of bonds in the international banking community, the <em>inter partes</em> court hearing will usually, though not always, result in the lifting of the attachment. The court will generally take the view that the issue of whether the PB was properly called is a matter to be decided as part of the main dispute.</span></p>\r\n<p class=\"p3\"><span class=\"s1\"><strong>Termination</strong></span></p>\r\n<p class=\"p1\">The termination of a construction contract which is subject to the FIDIC Red Book is far from straightforward in the UAE because of the interface between the contractual termination provisions and what local law provides for in respect of termination.</p>\r\n<p class=\"p1\">At the outset, one would do well to remember some important provisions of UAE law. Firstly, Article 2(1) of the UAE Commercial Code provides a hierarchy of laws whereby the contract comes first, followed by the Commercial Code, then custom and practice and then the provisions of the UAE Civil Code. Secondly, Article 31 of the UAE Civil Code provides that a mandatory provision of law will take precedence over any conflicting contractual provision. Therefore, mandatory provisions of UAE law, along with others, need to be carefully considered when contemplating a termination under the provisions of the FIDIC Red Book.</p>\r\n<p class=\"p1\">Clauses 15 and 16 set out the contractual grounds for termination in the event of default by the Contractor or Employer respectively (sub-clause 15.5 allows the Employer to terminate for convenience). In short, provided the relevant grounds exist and, in some instances, the appropriate notices have been issued, the aggrieved party may serve a 14-day notice on the other party to terminate.</p>\r\n<p class=\"p1\"><span class=\"s4\"> That all sounds relatively straightforward. However, the problem lies in how these contractual provisions sit with UAE law.<sup>28</sup> </span></p>\r\n<p class=\"p1\">Article 267 of the UAE Civil Code provides that a contract can only be terminated in one of three ways: (i) by consent; (ii) by order of the court (or tribunal); or (iii) by a provision of law.<sup>29</sup> This last provision is generally taken to mean (in a construction setting) a force majeure type event as prescribed in Article 273 of the UAE Civil Code.<sup>30</sup> It is the first two provisions which create issues in the context of a termination under the FIDIC Red Book.</p>\r\n<p class=\"p1\">The first type of termination, i.e. by consent, sometimes gives rise to the argument that when the parties negotiated and signed the contract they thereby agreed (consented) that either party would be able to terminate the contract if the grounds for termination were met, such that a court order for termination is not needed and termination takes effect immediately. However, the contrary view to this argument is that such agreement can only take place when the termination itself is contemplated. The least risky challenge to a termination by consent is to ensure that the contract expressly includes a provision that a termination can be made without the need for a judicial order, which would make the termination compliant with Article 271 of the UAE Civil Code.</p>\r\n<p class=\"p1\"><span class=\"s2\"> The second way of terminating a contract under UAE law is by way of a court (or tribunal) order pursuant to Article 272 of the UAE Civil Code, but there are pre-conditions to be met if a termination under this provision is to be lawfully effected.<sup>31</sup> Indeed, what will often happen when terminating under the FIDIC Red Book is that the terminating party will seek to rely upon its contractual default and termination notices as Article 272 compliant notices. </span></p>\r\n<p class=\"p1\">One can foresee the potential issues that may arise. On the one hand a party may terminate a contract in real time under FIDIC but, under UAE law, the contract may be said to remain in existence until a court (or tribunal) declares the contract terminated.<sup>32</sup> Some lawyers may argue that the contractual termination under FIDIC gives rise to a ‘determination’, i.e. it is only the primary obligation of performance which has been ended, but the ancillary secondary obligations remain intact. However, a UAE court may well take a more broad-brush approach and simply ask itself whether a party is seeking to argue that a contract has been terminated, yes or no. Furthermore, the local courts have previously decided that upon a termination a party’s ancillary rights (e.g. liquidated damages) fall away, which is inconsistent with the termination provisions of FIDIC.</p>\r\n<p class=\"p1\">Ultimately, no matter what the parties argue or their lawers advice, it will be for a court (or tribunal) to decide whether the termination was lawful.</p>\r\n<p class=\"p3\"><span class=\"s1\"><strong>Summary</strong></span></p>\r\n<p class=\"p1\">The perennial problems surrounding time, payment, performance bonds and termination have carried across from the use of the FIDIC 4th Edition through to FIDIC’s 1999 Rainbow suite and there is no reason to suggest that they will disappear when FIDIC introduces its updated standard form contracts. With this in mind, and given that the UAE’s construction industry has now experienced its first boom-bust cycle, maybe it is time that the industry’s players started looking at more collaborative approaches to contracting and consider using other industry standard forms such as the NEC3.</p>\r\n<p class=\"p2\">Footnotes:</p>\r\n<p class=\"p6\">1<em>Federation International des Ingenieurs-Conseils</em>, Conditions of Contract for Construction for Building and Engineering Works designed by the Employer, 1st Edition (1999)</p>\r\n<p class=\"p6\"><sup>2 </sup>Baker E, Mellors B, Chalmers S, Lavers A, <em>FIDIC Contracts: Law and Practice</em>, Informa (2009) p1</p>\r\n<p class=\"p6\"><sup>3 </sup>Mason J, <em>Construction Law: From Beginner to Practitioner</em>, Routledge (2016) p170</p>\r\n<p class=\"p6\"><sup>4 </sup>Baker E, Mellors B, Chalmers S, Lavers A, <em>FIDIC Contracts: Law and Practice</em>, Informa (2009) p4</p>\r\n<p class=\"p6\"><sup>5 </sup><em>The FIDIC Contracts Guide</em>, FIDIC (2000)</p>\r\n<p class=\"p6\"><sup>6 </sup>The Pink Book is a special version of the Red Book whereby FIDIC conferred a license to amend its General Conditions to suit the MDBs.</p>\r\n<p class=\"p6\"><sup>7 </sup>Sub-clause 8.3 FIDIC Red Book</p>\r\n<p class=\"p6\"><sup>8 </sup>Sub-clause 8.1 FIDIC Red Book</p>\r\n<p class=\"p6\"><sup>9 </sup>In the recent case of <em>Obrasconv. AG for Gibraltar</em> [2014] EWHC 1028 (TCC) the Court considered the issues surrounding a sub-clause 20.1 in some detail.</p>\r\n<p class=\"p6\"><sup>10 </sup>There is some discrepancy as to at what stage the Engineer is to follow sub-clause 3.5 when dealing with a claim under sub-clause 20.1.</p>\r\n<p class=\"p6\"><sup>11 </sup>Note that sub-clause 10.1 allows for a deemed taking-over and sub-clause 10.2 allows for a partial taking-over.</p>\r\n<p class=\"p6\"><sup>12 </sup>Baker E, Mellors B, Chalmers S, Lavers A, <em>FIDIC Contracts: Law and Practice</em>, Informa (2009) p241</p>\r\n<p class=\"p6\"><sup>13 </sup>Sub-clause 14.3 FIDIC Red Book</p>\r\n<p class=\"p6\"><sup>14 </sup>Sub-clause 14.6 FIDIC Red Book</p>\r\n<p class=\"p6\"><sup>15 </sup>Sub-clause 14.7 FIDIC Red Book</p>\r\n<p class=\"p6\"><sup>16 </sup>Sub-clause 14.10 FIDIC Red Book</p>\r\n<p class=\"p6\"><sup>17 </sup>Sub-clause 14.11 FIDIC Red Book</p>\r\n<p class=\"p6\"><sup>18 </sup>The Contractor and Engineer are required to discuss matters to see what can be agreed.If all items cannot be agreed upon then the Engineer should issue an interim payment certificate for those items not in dispute.</p>\r\n<p class=\"p6\"><sup>19 </sup>Sub-clause 14.12 FIDIC Red Book</p>\r\n<p class=\"p6\"><sup>20 </sup>Sub-clause 14.7 FIDIC Red Book</p>\r\n<p class=\"p6\"><sup>21 </sup>Sub-clause 16.2(c) FIDIC Red Book</p>\r\n<p class=\"p6\"><sup>22 </sup>Sub-clause 13.5 FIDIC Red Book</p>\r\n<p class=\"p6\"><sup>23 </sup>Sub-clause 11.9 FIDIC Red Book refers</p>\r\n<p class=\"p6\"><sup>24 </sup>Article 252 of Federal Law No.11 of 1992 (The UAE Civil Procedures Law)</p>\r\n<p class=\"p6\"><sup>25 </sup>Article 259 UAE Civil Procedures Law</p>\r\n<p class=\"p6\"><sup>26 </sup>Article 255(2) UAE Civil Procedures Law</p>\r\n<p class=\"p6\"><sup>27 </sup>Dubai Court of Cassation Judgment 322/94</p>\r\n<p class=\"p6\"><sup>28 </sup>One would do well to remember that the UAE Civil Code was implemented well before the explosion of mega building projects in Dubai and the proliferation of using complex standard form construction contracts.</p>\r\n<p class=\"p6\"><sup>29 </sup>These grounds for termination are somewhat mirrored in Article 892 of the Muqawala provisions of the Civil Code.Whilst not expressly provided for in the UAE Civil Code, there is case law which suggests that an Employer may terminate for convenience but in doing so it will be liable to pay the Contractor for, amongst other things, its loss of profit.</p>\r\n<p class=\"p6\"><sup>30 </sup>This is mirrored by Article 893 of the Muqawala section of the Civil Code</p>\r\n<p class=\"p6\"><sup>31 </sup>This is mirrored by Article 877 of the Muqawala section of the Civil Code</p>\r\n<p class=\"p6\"><sup>32 </sup>Grose M, <em>Construction Law in the United Arab Emirates and the Gulf</em>, Wiley Blackwell (2016) p186</p>'),
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(100793, 5481, 'content', 'October 2016\r\n\r\n<hr />\r\n<p class=\"p1\">This can be a persuasive argument because in the UAE arbitration is seen as an exceptional form of dispute resolution, one that deprives parties of their rights to refer disputes to the national courts. The Courts will therefore need to be satisfied that the company signatory had the required authority when signing to ensure the company consented to arbitration.</p>\r\n<p class=\"p1\">Where a UAE company is subject to a foreign award, a question that often emerges is which law needs to be complied with when determining the authority of the signatory. Is it UAE law (being the law under which the party was formed and exits); the governing law of the agreement; or the law where the arbitration takes place?</p>\r\n<p class=\"p1\">In a recent decision 693/2015 Commercial Appeal, the Dubai Court of Cassation has clarified that it is sufficient that the signatory has the authority to sign under the laws where the arbitration took place. Al Tamimi represented the successful Plaintiffs.</p>\r\n<p class=\"p3\"><span class=\"s1\"><strong>Background</strong></span></p>\r\n<p class=\"p1\">In October 2014, a major shipping line (the “<em>Owners</em>” or “<em>Plaintiffs</em>”), filed a claim for the recognition and enforcement of a foreign arbitral award in the UAE. The award has been issued pursuant to the LMAA rules in London. The party against whom the arbitral award was issued was a commercial company based in the UAE (the “<em>Defendants</em>” or “<em>Charterers’ Guarantor</em>”).</p>\r\n<p class=\"p1\">The facts of the arbitral award are as below:</p>\r\n<p class=\"p1\">The Owners chartered their vessel to ‘X’, with the Defendants countersigning the Charterparty as a Charterers’ Guarantor. X went into compulsory liquidation and failed to pay the hire amount punctually to the Owners. In accordance with the terms of the Charterparty, the matter was referred to arbitration in London.</p>\r\n<p class=\"p1\">By a Second Final Partial Arbitration Award, the arbitrators ordered the Charterers’ Guarantor, as the counter signatory, to pay the Owners an amount of USD 12,221,875.00 plus costs, 5% annual interest from 2011 until complete payment, and arbitration fees.</p>\r\n<p class=\"p3\"><span class=\"s1\"><strong>Dubai Court of First Instance</strong></span></p>\r\n<p class=\"p1\">The Charterers’ Guarantor submitted a reply to challenge the enforcement proceedings, raising, amongst other arguments, the below defences:</p>\r\n\r\n<ul>\r\n 	<li>\r\n<div class=\"p4\"></div></li>\r\n 	<li>The Defendants were not a party to the Charterparty, as their counter-signature was only to authenticate the Charterers’ signature on the Charterparty.</li>\r\n 	<li>The Second Final Arbitral Award should be refused pursuant to Article V (1)(a) of the New York Convention, on the basis that the Defendants were under some incapacity. The person who signed the Charterparty, which contains the arbitration clause, was not authorized on behalf of the Defendants to bind them in arbitration proceedings. As per the UAE laws, which ought to be the applicable law on the Defendants (as it is a UAE entity), only a director of the company or its board can bind the company to an arbitration clause.</li>\r\n 	<li>The Second Final Arbitral Award should be refused pursuant to Article V (1)(c) of the said convention, as the Defendants were not given proper notice of the appointment of the arbitrator and/or of the arbitration proceedings of the Second Final Arbitral Award, hence, they were unable to present their defense.</li>\r\n 	<li>The Second Final Arbitral Award should be considered as null and void, as the Second Arbitral Award dealt with a difference not contemplated by and not falling within the terms of the submission to arbitration, and the arbitral tribunal ended its jurisdiction over this dispute by issuing its First Final Arbitral Award.</li>\r\n</ul>\r\n&nbsp;\r\n<p class=\"p1\">The Plaintiffs argued that:</p>\r\n\r\n<ul>\r\n 	<li>Pursuant to Article 5(1)(a) of the New York Convention, the issue of whether the Defendants were a party to the charterparty or not was an issue that could only be determined by the applicable law to the contract (which was English Law). The tribunal had found that under English law the Defendants were bound by the charterparty and the arbitration clause it contained, and there was no reason to disturb this finding.</li>\r\n 	<li>The issue of whether the person who signed the arbitration agreement was an authorized signatory on behalf of the company or not should not be considered, as the Defendants had previously acknowledged its signature on the arbitration agreement as a countersigning party. In addition, this issue was subject to English law, being the applicable law on the Defendants. Under English Law an arbitration clause can be agreed upon by the representative of the company, its brokers, or by any way of communication.</li>\r\n 	<li>As regards the alleged procedural defects, the Plaintiffs submitted that there was no merit to these allegations as the Defendants had been duly served and had an opportunity to present its case and attend hearings, but had refused to do so.</li>\r\n 	<li>With regard to the allegation that the Second Arbitral Award dealt with a difference not contemplated by and not falling within the terms of the submission to arbitration, the Plaintiffs argued that this defence was not arguable before the Dubai Courts as the Defendants failed to submit a proof of this argument. Furthermore, a mere denial and objection on the arbitral award before the court where it is sought to be recognised should not have any effect as long as Defendants had not obtain a judgment from the competent authority to invalidate the award (in this case the English courts).</li>\r\n</ul>\r\n&nbsp;\r\n<p class=\"p7\">The Court of First Instance decided to dismiss the arguments of the Defendants, and decided to recognise the Second Final Arbitral Award in the UAE. It was satisfied that the award complied with the 1958 New York Convention on the Recognition and Enforcement of Foreign Awards (which the UAE signed in 2006), and was in compliance with local laws and did not contradict or breach UAE public policy.</p>\r\n<p class=\"p3\"><span class=\"s1\"><strong>Dubai Court of Appeal: </strong></span></p>\r\n<p class=\"p1\">The Defendants appealed the Court of First Instance judgment, raising the same arguments. However, the Court of Appeal upheld the arguments made by the Plaintiffs and ordered that the arbitral award be recognised and enforced in the UAE. In a short judgment the Court referred to the New York Convention, acknowledging that it applied directly to the enforcement of foreign arbitral awards, and rejected the arguments made by Defendants.</p>\r\n<p class=\"p3\"><span class=\"s1\"><strong>Dubai Court of Cassation: </strong></span></p>\r\n<p class=\"p1\">The Defendants chose to lodge a further appeal before the Dubai Court of Cassation, and also submitted an application to stay the execution proceedings until a final judgment had been issued by the Dubai Court of Cassation. The application for a stay of execution proceedings was approved by the Dubai Court of Cassation, as it was held that prior to enforcing the award it was necessary that a final court judgment be issued by the Court of Cassation.</p>\r\n<p class=\"p1\">The Defendants appeal was based on two main reasons, namely:</p>\r\n\r\n<ul>\r\n 	<li>The Defendants were not served duly with the arbitration proceedings. Although a special federal decree (no 38 of 2007) had been enacted to regulate the judicial cooperation between the UAE and the UK, the proceedings had not been served through diplomatic channels.</li>\r\n 	<li>The Defendant is an LLC company, based and incorporated under UAE laws. Only its director had the authority to bind the company to an arbitration clause. The director of the company had never signed or agreed to the arbitration clause.</li>\r\n</ul>\r\n<p class=\"p7\">The Dubai Court of Cassation issued its judgment on 10 April 2016, dismissing the appeal and affirming the Court of First Instance and the Court of Appeal judgments, for the following reasons:</p>\r\n\r\n<ul>\r\n 	<li>Article V of the NY Conventions regulates when an foreign award can be refused enforcement, and states that:  <em>“ 1. Recognition and enforcement of the award may be refused, at the request of the party against whom it is invoked, only if that party furnishes to the competent authority where the recognition and enforcement is sought, proof that: (a) The parties to the agreement referred to in article II were, under the law applicable to them, under some incapacity, or …..; or (b) The party against whom the award is invoked was not given proper notice of the appointment of the arbitrator or of the arbitration proceedings or was otherwise unable to present his case; or (c) ….etc.”. </em></li>\r\n 	<li>The advantage of this article is that an arbitral award shall not be dismissed and a party against whom it is invoked shall not challenge the arbitral award, unless he proves to the competent authority where the recognition and enforcement is sought to be recognised that he was under some incapacity pursuant to the law where the arbitral award was issued, or that he was not duly served with the appointment of the arbitrator or the arbitration proceedings which made him unable to present his defense.</li>\r\n 	<li>Upon reviewing the Second Arbitral Award, it is apparent that the tribunal did mention in paragraph 6 of its award that the Defendants denied its responsibility in this claim, as it was not a party to the Charterparty. This meant that the Defendants were aware of the arbitration proceedings and did attend before the tribunal to submit its initial defences.</li>\r\n 	<li>It is apparent to the court upon reviewing the charterparty that the Defendants had signed the charterparty and its company stamp was placed on the charterparty. This meant that they were charterers of the vessel and a party to this agreement.</li>\r\n 	<li>Furthermore, the Defendants did not submit any proof to the UAE courts confirming that they were under some incapacity pursuant to English law, despite being granted this opportunity before the Dubai Court of First Instance the Court of Appeal.</li>\r\n</ul>\r\n&nbsp;\r\n<p class=\"p3\"><span class=\"s1\"><strong>Practice Note:</strong></span></p>\r\n<p class=\"p1\">This case helpfully clarifies at the highest level that a company’s capacity to enter into an arbitration clause shall not be limited to its director, but can also be extended to its employees, agents or brokers as long as this is in compliance with the laws applicable where the arbitration proceedings take place (the seat). This means that even if the signatory may not have been authorised pursuant to UAE law, provided the signatory would have had the authority under the foreign law, that is sufficient.</p>\r\n<p class=\"p1\">This is because the Court interpreted the phrase “the law applicable to them” referred to in article V(1)(a) of the New York Convention, as the laws governing the arbitration proceedings (i.e. the laws of the seat) rather than the laws governing the incorporation of each party.</p>\r\n<p class=\"p1\"><span class=\"s2\"> This is a welcome judgment that demonstrates the Dubai Courts’ supportive attitude towards the enforcement of foreign arbitral awards, and will strengthen the perception of the UAE as a pro-arbitration jurisdiction. </span></p>'),
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(100740, 5477, 'content_description', 'A trade (or industrial) mark is a sign chosen by the merchant or manufacturer to be put on their products to distinguish those products from other similar products. The trademark aims to distinguish the products to attract customers. '),
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(100752, 5477, 'lawUpdateArticleNoWriters_1_lawUpdateAuthorName', 'Maha Ayche'),
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(100761, 5478, 'content', 'September 2016\r\n\r\n<hr />\r\n<p class=\"p1\"><span class=\"s1\">Jordan is becoming a major destination for real estate developers from all over the region. Over the past 10 years, real estate developers from the GCC have entered the market by either acquiring ongoing projects in Amman and Aqaba, or by establishing new projects in the Kingdom. However, the lack of legislation addressing mixed-use projects (a single project that has both residential units and commercial units) has hampered the progress of such projects. </span></p>\r\n<p class=\"p1\">The current legislation regulating the ownership of property in the Kingdom is the Ownership of Apartments and Floors Law No. 25 of 1968 as amended (the “Law”), which lacks the basic essential features for the proper regulation of mixed-use projects. Under the current legislation, every property owner has a vote at the owners’ association, which is established pursuant to the Law. The Law provides that such an association must be established for every building that has more than 4 apartments/stories for the purpose of managing the property (an “Association”). Voting at meetings of an Association is by owners of individual units within the project, with each owner having one vote regardless of the total area he owns.</p>\r\n<p class=\"p1\"><span class=\"s1\">However, these voting rights defy the purpose of having one project managed by one party, essential for such types of projects. The fact that every building has a separate management Association in a mixed-use project is likely to create numerous issues for developers, including making it difficult for the developer to set out a set of unified rules applicable to the entirety of the project. The difficulties are particularly acute in relation to the enforcement of managerial decisions, including the imposition of service charges to be paid by owners, both commercial and residential. </span></p>\r\n<p class=\"p1\"><span class=\"s1\">Another major issue that may arise is the control of an Association in a project comprised of residential units, shopping malls, hotels etc. Every person whose name appears on the title deed has one vote in an Association, regardless of his share in the total area of the project. By way of example, hotels have the same voting rights as a single unit owner. This grants residential owners the controlling stake in an Association, including the right to make decisions related to sub-projects in a mixed-use project.</span></p>\r\n<p class=\"p1\"><span class=\"s1\">Jordan urgently needs to revise its real estate development legislation by adopting regulations similar to those applied in the UAE, which endorse strata and mixed-use concepts that are recognised worldwide.</span></p>'),
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(100727, 5476, 'pageSummary', 'The Saudi Vision 2030 was announced in April 2016 and represents Saudi Arabia’s roadmap to diversify its economy and address the challenges brought by low global energy prices. In June 2016 the National Transformation Program 2020 (“NTP”) was launched by the Saudi Government as part of the implementation of the Saudi Vision 2030 with the aim of meeting interim targets by 2020 through various strategic initiatives across 24 Saudi governmental bodies.'),
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(100735, 5476, '_yoast_wpseo_metadesc', 'Al Tamimi & Company looks at some of The Saudi Vision 2030 opportunities with particular reference to Saudi’s Eastern Province where a significant proportion of the initiatives are focused.'),
(100736, 5477, 'content', 'September 2016\r\n\r\n<hr />\r\n<p class=\"p1\">The trademark may also refer to the country of issue, production source, source of selling, the goods’ quality, category, guarantee, preparation process, or the provision of any service.</p>\r\n<p class=\"p1\"><span class=\"s1\"> In order to register a trademark in Egypt, the word and/or image element will have to fulfill certain criteria.</span></p>\r\n<p class=\"p2\"><span class=\"s2\"><strong>1. Names represented in a distinctive manner:</strong></span></p>\r\n<p class=\"p3\"><span class=\"s1\">It must take a distinctive manner i.e. to be put in a particular form, with certain colors or with a special drawing/design creating certain characteristics to the trademark to differentiate it from other marks.</span></p>\r\n<p class=\"p5\"><span class=\"s2\"><strong>2. Letters and numbers:</strong></span></p>\r\n<p class=\"p3\"><span class=\"s1\">The trademark may take a specific form of letters or numbers to distinguish the products.</span></p>\r\n<p class=\"p5\"><span class=\"s2\"><strong>3. Drawings, pictures and engravings:</strong></span></p>\r\n<p class=\"p3\">The trademark might be a certain symbol that refers to a special form, whether derived from nature as a tree or a flower or a pyramid, or the form of an animal or buildings, ships, cars to distinguish and highlight the property of the products.</p>\r\n<p class=\"p5\"><span class=\"s2\"><strong>4. Covers and shape or color of product/goods:</strong></span></p>\r\n<p class=\"p3\"><span class=\"s1\">The use of a three-dimensional mark has recently spread, especially for the cover of products/goods related to drinks, toys, electrical and electronic appliances. These 3D shapes are often subject to infringement and counterfeiting from their competitors.</span></p>\r\n<p class=\"p6\"><span class=\"s1\">The trademark, in whatever form it is, must identity the product sufficiently to avoid confusion with other marks that are placed on similar products or services. It is also important to have a legitimate trademark which does not violate the law or public order and good morals.</span></p>\r\n<p class=\"p1\"><span class=\"s1\"> Some trademarks are not considered legally protected, such as marks that are devoid of any specific properties or qualities, or photographs of people. Article 67 of the Egyptian Trademark Law gives the following list of marks that cannot be used or protected:</span></p>\r\n\r\n<ul>\r\n 	<li>\r\n<div class=\"p7\"></div></li>\r\n 	<li>Marks devoid of any distinctive character, or composed of signs or statements which only usage grants to the products, or which is the normal picture or image thereof.</li>\r\n 	<li>Any mark which is contrary to public order or morality.</li>\r\n 	<li>Public armorial bearings, flags and other emblems pertaining to the State or any other state, regional or international organizations, as well as any imitations thereof.</li>\r\n 	<li>Marks which are identical with, or similar to, symbols of religious character.</li>\r\n 	<li>Symbols of the Red Cross or Red Crescent, or any other emblem of the same character, as well as any imitations thereof.</li>\r\n 	<li>The portrait of an individual or his armorial bearings, except with his consent.</li>\r\n 	<li>Designations of honorary degrees which the applicant is unable to prove his right thereto.</li>\r\n 	<li>Marks and geographical indications which are likely to mislead or confuse the public or which contain false descriptions as to the origin of products, whether goods or services, or their other qualities, as well as the signs that contain an indication of a fictitious, imitated or forged trade name.</li>\r\n</ul>\r\n&nbsp;\r\n<p class=\"p6\"><span class=\"s1\">It is recommended to conduct a search prior to filing a trademark to check its availability. The search result takes around 4 - 7 working days. This step may avoid the applicant from having his trademark refused if it has been applied for or registered earlier by someone else.</span></p>\r\n<p class=\"p1\"><span class=\"s1\"> Upon availability, the trademark then can be filed with the Trademark Office. </span></p>\r\n<p class=\"p1\"><span class=\"s1\"> To file a trademark, an application should be filed with the applicant’s name, address and nature of business specifying the class with the list of goods/services, with a copy of the trademark. A legalized Power of Attorney should also be submitted. The mark can be applied for in one or more classes. </span></p>\r\n<p class=\"p1\"><span class=\"s1\"> Upon examination, the Registry may apply certain conditions and require the applicant to undertake modifications on the mark in order to define and clarify it so as to avoid confusion with a mark already registered, or a mark for which a registration application has already been filed. Such decision shall, within 30 days of its issue, be communicated to the applicant in writing. The Department may reject the application should the applicant fail, within six months of the notification, to introduce the amendments required.</span></p>\r\n<p class=\"p1\"><span class=\"s1\"> The applicant may appeal the decision of the Department within 30 days from the communication of such a decision. Appeals are considered by a committee composed of three members, one of whom is a member of the Council of State.</span></p>\r\n<p class=\"p1\"><span class=\"s1\"> If the trademark is accepted, the Department shall have the decision published in the Gazette of Trademarks and Industrial Designs. Within 60 days after this, any interested party may submit an application opposing the trademark in writing to the Department. The Department shall then send a copy of the opposition to the applicant, within 30 days from the receipt of such a notification. </span></p>\r\n<p class=\"p1\"><span class=\"s1\"> The applicant then has 30 days to reply, failing which he will be considered to have withdrawn his application. </span></p>\r\n<p class=\"p1\"><span class=\"s1\"> In the absence of any opposition, registration of the mark is then approved by a decision of the Department, which is published in the Trademarks and Industrial Designs Gazette. Registration will take effect from the date of filing the application. The Department will give the owner of the mark a certificate containing the information published in the Gazette, which can serve as proof that the mark has been registered and is protected. </span></p>'),
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(100725, 5476, 'content_description', 'The Saudi Vision 2030 was announced in April 2016 and represents Saudi Arabia’s roadmap to diversify its economy and address the challenges brought by low global energy prices. In June 2016 the National Transformation Program 2020 (“NTP”) was launched by the Saudi Government as part of the implementation of the Saudi Vision 2030 with the aim of meeting interim targets by 2020 through various strategic initiatives across 24 Saudi governmental bodies. '),
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(100687, 5474, 'content_description', 'This article considers the scope of copyright protection in Bahrain. \r\n\r\n'),
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(100689, 5474, 'pageSummary', 'This article considers the scope of copyright protection in Bahrain.'),
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(100701, 5474, '_yoast_wpseo_metadesc', 'The Bahraini Copyright Law no. 22 of 2006 as amended (“Copyright Law”) replaced Law no. 10 of 1993, providing wider protection. This article considers the scope of copyright protection in Bahrain.'),
(100702, 5475, 'content', 'September 2016\r\n\r\n<hr />\r\n<p class=\"p1\">The Competition Law introduced a new regime of jurisprudence to Qatar. It was enacted in response to obligations created by multilateral trade agreements and World Trade Organisation requirements. It applies to all business activities in Qatar within the private sector. However, it does not apply to governmental acts or acts of any entity controlled or supervised by the state.</p>\r\n<p class=\"p1\"><span class=\"s1\"> The Competition Law forbids collusion, mergers and abusive conduct that would result in dominant market positions. It aims to: stabilise domestic markets and achieve social justice by removing any hurdles that restrict businesses from reaching local consumers; and, encouraging competition to assist economic growth and national development aims.</span></p>\r\n<p class=\"p1\"><span class=\"s1\"> Article one states that it applies to both collective activities and unilateral activities in areas of control. Control is defined as ‘the ability of a person or group of persons working together to control the market of products in order to affect prices or quantities without competitors having the ability to limit such effect.’</span></p>\r\n<p class=\"p1\"><span class=\"s1\"> A mandatory notification of mergers creating or likely to create a so-called control situation is provided by Article 10. A merger is an acquisition of rights, assets or shares, or the creation of joint ventures or an amalgamation between two or more corporate entities. The Committee is responsible for receiving Article 10 notifications. It must make a decision on these notifications within 90 days, failing which acceptance of the merger is deemed to have taken place. Details of ways to lodge notifications can be found in the Resolution of the Minister of Economy and Commerce (No. (61) of 2008).</span></p>\r\n<p class=\"p1\"><span class=\"s1\"> Mergers are excluded from the operation of Article 10 where they contribute to economic progress in a manner that compensates for any adverse effect on competition (Article 11). What comprises economic progress is yet to be determined.</span></p>\r\n<p class=\"p1\"><span class=\"s1\"> Any member of the Committee, as well as properly appointed ministerial officials, are responsible for investigating breaches of the Competition Law. To that end, they are empowered to enter business premises and other places where activities are being undertaken and to inspect all books and other documentary records.</span></p>\r\n<p class=\"p1\"><span class=\"s1\"> Under Article 15, the Committee can make stop orders against entities in breach of any collusive or abusive conduct or engaging in any unlawful mergers. </span></p>\r\n<p class=\"p1\"><span class=\"s1\"> Article 17 provides for punitive fines ranging from 100,000 to 5,000,000 Qatari Riyals (approximately $27,000 to $1.4 million). It also grants the court the power to confiscate profits made as a consequence of the unlawful activity. Article 18 provides the same fines are applicable to any individual responsible for the management of an entity found to have committed an infringement provided that the individual had knowledge of and contributed to the infringement. However, it appears that such individuals are entitled to an indemnity for the fine from the corporate entity. The Minister for Economy and Commerce can agree a settlement without penal remedies, provided that the settlement contains a payment of between 100,000 to 5,000,000 Qatari Riyals.</span></p>\r\n<p class=\"p2\"><span class=\"s1\"> </span></p>\r\n<p class=\"p3\"><span class=\"s1\">This article was first published in the July/August 2016 edition of International Financial Law Review magazine. </span></p>'),
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(100706, 5475, 'content_description', 'Qatar’s De-monopolisation and Competition Protection Committee (the Committee) at the Ministry of Economy and Commerce has become much more active of late. Therefore, ten years after its enactment, it is a good time to review the key provisions of the law on the protection of competition and prohibition of monopolistic practices (19 of 2006) (Competition Law).'),
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(100708, 5475, 'pageSummary', 'Qatar’s De-monopolisation and Competition Protection Committee (the Committee) at the Ministry of Economy and Commerce has become much more active of late. Therefore, ten years after its enactment, it is a good time to review the key provisions of the law on the protection of competition and prohibition of monopolistic practices (19 of 2006) (Competition Law).'),
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(100712, 5475, 'lawUpdateArticleNoWriters_0_lawUpdateAuthorName', 'Carlo Procacci'),
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(100716, 5475, 'lawUpdateArticleNoWriters_0_lawUpdateAuthorLocation', 'Doha, Qatar'),
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(100720, 5475, '_yoast_wpseo_metadesc', 'Ten years after its enactment, it is a good time to review the key provisions of the law on the protection of competition and prohibition of monopolistic practices (19 of 2006) (Competition Law).'),
(100721, 5476, 'content', 'September 2016\r\n\r\n<hr />\r\n<p class=\"p1\">The Saudi Vision 2030 and the NTP include a strong emphasis on increased private sector involvement and investment and the privatisation of a large number of Government businesses as well as the development of various industries.</p>\r\n\r\n<table class=\"t1\" cellspacing=\"0\" cellpadding=\"0\">\r\n<tbody>\r\n<tr>\r\n<td class=\"td1\" valign=\"middle\">\r\n<p class=\"p3\"><span class=\"s1\"><strong>Expected Cost of NTP initiatives over 5 years</strong></span></p>\r\n</td>\r\n<td class=\"td1\" valign=\"middle\">\r\n<p class=\"p3\"><span class=\"s1\"><strong>SAR Billion</strong></span></p>\r\n</td>\r\n<td class=\"td1\" valign=\"middle\">\r\n<p class=\"p3\"><span class=\"s1\"><strong>Percentage</strong></span></p>\r\n</td>\r\n</tr>\r\n<tr>\r\n<td class=\"td1\" valign=\"middle\">\r\n<p class=\"p3\"><span class=\"s1\"><strong>Government</strong></span></p>\r\n</td>\r\n<td class=\"td1\" valign=\"middle\">\r\n<p class=\"p4\">268</p>\r\n</td>\r\n<td class=\"td1\" valign=\"middle\">\r\n<p class=\"p4\">60</p>\r\n</td>\r\n</tr>\r\n<tr>\r\n<td class=\"td1\" valign=\"middle\">\r\n<p class=\"p3\"><span class=\"s1\"><strong>Private Sector</strong></span></p>\r\n</td>\r\n<td class=\"td1\" valign=\"middle\">\r\n<p class=\"p4\">179</p>\r\n</td>\r\n<td class=\"td1\" valign=\"middle\">\r\n<p class=\"p4\">40</p>\r\n</td>\r\n</tr>\r\n<tr>\r\n<td class=\"td1\" valign=\"middle\">\r\n<p class=\"p3\"><span class=\"s1\"><strong>Totals</strong></span></p>\r\n</td>\r\n<td class=\"td1\" valign=\"middle\">\r\n<p class=\"p4\">447</p>\r\n</td>\r\n<td class=\"td1\" valign=\"middle\">\r\n<p class=\"p4\">100</p>\r\n</td>\r\n</tr>\r\n</tbody>\r\n</table>\r\n<p class=\"p1\">These plans will result in opportunities throughout Saudi Arabia .This Article looks at some of those opportunities with particular reference to Saudi’s Eastern Province where a significant proportion of the initiatives are focused.</p>\r\n<p class=\"p5\"><span class=\"s2\"><strong>Saudi Vision 2030 and the NTP</strong></span></p>\r\n<p class=\"p1\">The Saudi Vision 2030 sets out a wide range of strategic and economic goals aimed at reducing the dependency on oil production and Government spending. Particular highlights include:</p>\r\n\r\n<ul>\r\n 	<li>Defence Industry - 50% of military equipment spending to be localised by 2030</li>\r\n 	<li>Mining Industry - to be reformed to stimulate massive growth with target of SAR97 billion by 2020 and 90,000 job opportunities</li>\r\n 	<li>Non-Oil Sectors - the development of the non-oil sectors by 2020 with consequent reduced dependence on hydrocarbons</li>\r\n 	<li>Oil and Gas - the continued localisation of the sector from 40% to 75%, development of support sectors, increased gas production with a national gas distribution network</li>\r\n 	<li>Private Sector Investment - increasing the private sector contribution from 40% to 65% of GDP with particular focus on energy, healthcare, housing and municipal services</li>\r\n 	<li>Saudi Aramco IPO - the listing of up to 5% of Saudi Aramco with proceeds of the IPO to go to the Public Investment Fund (“PIF”)</li>\r\n 	<li>Overseas Investment - the PIF to become a global sovereign wealth fund valued at up to US$ 3 trillion</li>\r\n 	<li>Privatisations - a wide range of Government assets to be privatised</li>\r\n 	<li>Renewable Energy Industry - to be developed with private sector participation</li>\r\n 	<li>Retail and Trading Sector - to be developed with a view to creating a million jobs through the easing of foreign investment restrictions</li>\r\n 	<li>Telecommunications Industry - to develop the telecommunications and information technology infrastructure including high speed broadband</li>\r\n 	<li>Transportation - the creation of a regional logistics hub with completed and linked internal and cross border infrastructure</li>\r\n</ul>\r\n<p class=\"p7\">The NTP sets out strategic objectives with interim targets to be achieved by 2020, key performance targets and benchmarks of the 24 Government bodies involved and in each case links them to Vision 2030. The NTP also lists the various initiatives to be undertaken by each Governmental body involved. A total of 534 initiatives were approved for 2016 with a total cost to the Government over the next five years of around SAR 270 billion.</p>\r\n<p class=\"p1\">The NTP is therefore essential reading for international and domestic companies investing and operating in Saudi Arabia.</p>\r\n<p class=\"p1\">As the core area of Saudi Arabia’s petrochemical and industrial production and a key area for transportation and logistics, the Eastern Province of Saudi Arabia is a huge beneficiary of many of the initiatives and projected investments outlined in the NTP. The emphasis on “buying Saudi” and localisation will also have an increasing impact on how foreign investors will need to adapt to operating in Saudi Arabia.</p>\r\n<p class=\"p5\"><span class=\"s2\"><strong>Some key initiatives and 2020 targets in the NTP</strong></span></p>\r\n<p class=\"p1\">There is a wide-ranging list of initiatives and 2020 targets in the NTP. Those which will directly or indirectly impact on the Eastern Province include:</p>\r\n<p class=\"p1\"><em>Energy, Industry and Natural Resources</em> (NTP budget - SAR 2.5 billion)</p>\r\n\r\n<ul>\r\n 	<li>Increasing value of non-oil exports from SAR185 billion to SAR 330 billion (a large part of this is expected to come from mining)</li>\r\n 	<li>Increasing the mining sector contribution to GDP from SAR64 billion to SAR 97 billion</li>\r\n 	<li>Increasing local content in public and private sectors from 36% to 50% with an extra 5% of jobs to be localised in the private sector</li>\r\n 	<li>Increasing private sector involvement in high-potential less-developed regions from 0 to SAR28 billion (e.g. development of mining sector)</li>\r\n</ul>\r\n<p class=\"p7\">In line with the localisation initiatives in the NTP, under its “In Kingdom Total Value Added Programme” announced to suppliers in December 2015, Saudi Aramco aims to double the amount of locally made and supplied goods and energy related services to 70% of its supply chain within five years. This is expected to create 500,000 local jobs.</p>\r\n<p class=\"p1\"><em>Health Sector</em> (NTP Budget - SAR 23 billion)</p>\r\n\r\n<ul>\r\n 	<li>Increasing the private sector contribution to heath care expenditure from 25% to 35%</li>\r\n 	<li>Increasing the localisation of pharmaceutical manufacturing from 20% to 40% of the total market</li>\r\n</ul>\r\nA number of public to private partnerships are expected in the health sector and also the privatisation of one of Saudi’s medical cities.\r\n<p class=\"p1\"><em>Education</em> (NTP budget - SAR 24 billion)</p>\r\n\r\n<ul>\r\n 	<li>Increasing private sector involvement with target of increasing percentage of students in non- Government higher education from 6% to 15%</li>\r\n</ul>\r\nUnder the NTP approximately SAR 3 billion is allocated for developing colleges and institutes in Jubail and Yanbu Industrial Cities.\r\n<p class=\"p1\"><em>Environment, Water and Agriculture</em> (NTP budget - SAR12.9 billion)</p>\r\n\r\n<ul>\r\n 	<li>Desalinated water production involving strategic partnerships to increase from 16% to 52%</li>\r\n 	<li>Treated water production involving strategic partnerships to increase from 0% to 20%</li>\r\n 	<li>Cities covered by water and sewage services supplied by the National Water Company to increase from 42% to 70% with expected collaboration from the private sector</li>\r\n</ul>\r\nThe NTP includes an emphasis on environmental matters and includes a budget of approximately SAR 1.5 billion relating to the protection of the environment in Jubail, Yanbu and Ras Al Khair, which already have a comprehensive local environmental regulatory regime.\r\n<p class=\"p1\"><em>Housing</em> (NTP Budget - SAR 59 billion)</p>\r\n\r\n<ul>\r\n 	<li>Increasing real estate sector contribution to GDP from 5% to 10%</li>\r\n 	<li>Establishment of partnerships with private sector developers to develop Government land for housing projects</li>\r\n 	<li>Establishing fast-track licences and special finance packages to encourage private sector investment in housing projects</li>\r\n</ul>\r\n<p class=\"p7\">Housing is the biggest area of Government expenditure under the NTP. Over SAR5 billion is committed in the NTP for housing development in Eastern Province in addition to very significant budgets for developing residential and community areas and public facilities in Jubail, Yanbu and Ras Al Khair.</p>\r\n<p class=\"p1\"><em>King Abdullah City for Atomic and Renewable Energy (“KACARE”)</em> (NTP budget - SAR 5 billion)</p>\r\n\r\n<ul>\r\n 	<li>Enabling atomic energy to contribute to the national energy mix</li>\r\n 	<li>Enabling renewable energy to contribute to the national energy mix in the amount of 3.45Gw</li>\r\n 	<li>Increasing local content in the industrial and service value chains and expertise in renewable energy sector from 25% to 35% and in the atomic energy sector from 25% to 30%</li>\r\n</ul>\r\n<p class=\"p7\">KACARE is working with the RCJY on a solar energy project with 50MW capacity for Yanbu Industrial City.</p>\r\n<p class=\"p1\"><em>Royal Commission for Jubail and Yanbu (“RCJY”) </em>(NTP budget – SAR 41.5 billion)</p>\r\n\r\n<ul>\r\n 	<li>Attracting diverse and integrative industries with target of increasing number of value added manufacturing and transformation products from 432 to 516</li>\r\n 	<li>Increasing RCJY’s cities industrial production from 252 to 309 million tons</li>\r\n 	<li>Significant increase in new private sector investment from SAR 681 billion to SAR 1065 billion</li>\r\n</ul>\r\n<p class=\"p7\">The RCJY is second only to the Ministry of Housing in its size of budget under the NTP. Significant initiatives include the development of new infrastructure in Yanbu Industrial City (including localising the renewable energy and rubber industries and establishing industrial gas and steam networks), Jubail Industrial City and Ras Al Khair Industrial City.</p>\r\n<p class=\"p1\">One of the biggest elements of the RCJY’s budget under the NTP is for developing value-added manufacturing and transformation products. Currently the limited chemical conversion industrial base in the Eastern Province means that most relevant petrochemical output is used for basic chemicals and polymers and only relatively small amounts of specialty chemicals and end use products are produced. The establishment of a downstream specialty chemicals and end use product sector is seen as critically important in establishing a higher added-value manufacturing industry</p>\r\n<p class=\"p1\"><em>Saudi Arabian General Investment Authority</em> (NTP budget - SAR 1 billion)</p>\r\n\r\n<ul>\r\n 	<li>Increasing direct foreign investment from SAR 30 billion to SAR 70 billion</li>\r\n 	<li>Promoting investment opportunities with a target of SAR 2.3 trillion new investment opportunities</li>\r\n 	<li>Increasing local content from 20% to 40%</li>\r\n 	<li>Reducing time needed for new business licences from 19 days to 1 day</li>\r\n 	<li>Establishing a Government agency to handle mega projects</li>\r\n 	<li>Initiatives include localising several industries (construction materials and equipment, transportation and logistics services) and launching a unified licences service for foreign investors</li>\r\n</ul>\r\n<p class=\"p1\"><em>Technology</em> (NTP Budget - SAR8.3 billion)</p>\r\n\r\n<ul>\r\n 	<li>The localisation and transfer of technology in building and construction, mining and advanced materials, health, energy, information and communication, water, oil and gas and transportation and logistics</li>\r\n</ul>\r\n<p class=\"p7\">In Eastern Province the NTP budgets for a smart city to be established in Yanbu and for the automation of Jubail and Ras Al Khair Industrial Cities.</p>\r\n<p class=\"p2\"><em> </em></p>\r\n<p class=\"p1\"><em>Transportation</em> (NTP budget - SAR 5.5 billion)</p>\r\n\r\n<ul>\r\n 	<li>Increasing private sector contribution in developing and operating ports projects from 30% to 70%</li>\r\n 	<li>Increasing private sector contribution in developing and operating rail projects from 5% to 50%</li>\r\n 	<li>Improving the container capacity of the Dammam to Riyadh rail link</li>\r\n</ul>\r\n<p class=\"p7\"><span class=\"s3\">The General Ports Authority is expected to be on the privatisation list. Initiatives include setting up private sector operation and maintenance concessions, and development of an integrated programme to improve port efficiency, which will be of particular importance to the ports in Eastern Province.</span></p>\r\n<p class=\"p1\">Specific initiatives also include establishing multi-modal logistics hubs in each of Jubail and Yanbu with Yanbu also to have a minerals port.</p>\r\n<p class=\"p5\"><span class=\"s2\"><strong>Investment Opportunities</strong></span></p>\r\n<p class=\"p1\">Developments since the launch of Vision 2030 and the NTP provide strong evidence of the fast pace of change, with both foreign and local investors being involved in significant opportunities in Saudi Arabia and the Governmental authorities (such as the RCJY) being proactive in seeking and promoting initiatives and private sector involvement.</p>\r\n<p class=\"p1\"><span class=\"s3\"> The range of initiatives and opportunities spans social and community related projects (housing, sports centres, public facilities) and the education, healthcare, municipal services, energy, environmental, industrial and manufacturing, oil and gas, technology and transportation sectors.</span></p>\r\n<p class=\"p1\">The conditions allowing 100% foreign-owned trading companies have come into force and although geared at large investments by multi-national companies, several foreign groups have already been approved to establish such entities.</p>\r\n<p class=\"p1\"><span class=\"s3\"> One of these companies is US conglomerate 3M, the largest chemicals manufacturer in the USA, which was granted a 100% trading licence in June 2016. 3M is establishing a facility in Dammam which, when completed, will be the largest manufacturing plant in the MENA region.</span></p>\r\n<p class=\"p1\">The massive projected budget of the RCJY under the NTP and the targets of diversifying into higher added-value and transformation industries with the support services required for greater infrastructure and more workers should result in many opportunities throughout Eastern Province.</p>\r\n<p class=\"p1\">The agreement announced in May 2016 of General Electric’s deal with Saudi Arabian Industrial Investments Company involving an initial US$1.4 billion (with potential increase to US$3 billion) of investment in manufacturing projects evidenced the Government’s commitment to increasing foreign sector investment and promoting the development of local industry.</p>\r\n<p class=\"p1\">Hard on the heels of the NTP launch, Saudi Aramco and Saudi Arabian Basic Industries Company announced that, in support of Vision 2030, they had agreed to establish a joint venture to set up and operate a fully integrated crude oil to chemicals complex in Eastern Province which is expected to lead to the creation of a 100,000 direct and indirect jobs.</p>\r\n<p class=\"p1\">In August 2016 it was reported that in line with Vision 2030 the RCJY had signed 24 contracts with up to 16 private sector investors for the development of commercial centres, hotels, housing, medical clinics and other projects in Jubail and Ras Al Khair Industrial Cities.</p>\r\n<p class=\"p1\">Investments may take the form of joint ventures and/or public private partnerships and given the initiatives in the NTP many opportunities can be expected in the Eastern Province particularly in the energy, education, housing and municipal services, transportation and oil and gas sectors.</p>\r\n<p class=\"p1\">It is also expected that there will be a number of privatisations with related opportunities for foreign and local investors, lenders and advisers.</p>\r\n<p class=\"p1\">Further initiatives in relation to the Saudi Vision 2030 and the NTP are expected and we will issue further updates on significant related developments.</p>\r\n<p class=\"p1\">With the launch of our third Saudi office in Al Khobar, Al Tamimi &amp; Co are perfectly placed to advise on opportunities and issues in Eastern Province and across Saudi Arabia relating to Vision 2030 and the NTP.</p>'),
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(100464, 5463, 'pageSummary', 'Whether it is an airport, industrial facility, power station, hospital, commercial tower, residential project or any other asset, for a project to retain its value, be attractive to its users and function as intended, it must be operated and maintained properly. This is normally done through the appointment of a facility manager under a facility management contract.'),
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(100477, 5464, 'content', 'September 2016\r\n\r\n<hr />\r\n<p class=\"p1\">The slowdown in the UAE economy has resulted in a corresponding slowdown in loan growth for the UAE banks and some debt delinquencies, especially in the SME market, and that has lead in some cases to a drop in bank profits as a result of increased bad debt provisions. While we understand that contractors who were the first to be affected have largely already made arrangements, that still leaves many bank customers who are feeling the stress of making scheduled loan repayments when their own profitability and cashflows are coming under pressure. If it is not sufficient to grant a rescheduling of the debt so that payments are reduced as the tem of the loans are extended, the banks and their customers will have to start considering entering into a more formal restructuring.</p>\r\n<p class=\"p1\">The practice in the UAE has been for consensual restructuring, partly as the current laws are designed for traders rather groups of companies with complex debt structures, and partly by the desire to ensure that these businesses survived as going concerns, even if the bargain stuck through the restructuring does not reflect usual commercial terms. Other reasons for pursuing a consensual process outside of court action are that:</p>\r\n\r\n<ul>\r\n 	<li>the statistics that we have show that for the few formal insolvencies that have taken place, they each take approximately 3.2 years, cost 20% of the assets of the borrower, and return only 29 fils in every dirham;</li>\r\n 	<li>a formal insolvency process or enforcement of security is almost always value destructive to the assets of the borrower; and</li>\r\n 	<li>the insolvency process under UAE law can be unpredictable.</li>\r\n</ul>\r\n&nbsp;\r\n<p class=\"p4\">Many UAE banks learned significant lessons from the 2008/9 financial crisis — these lessons or principles are now being dusted off to be put to use again, which can be seen in the recent “mini insolvency law” announced by the United Arab Emirates Banks Federation.</p>\r\n<p class=\"p1\">The key restructuring lessons are:</p>\r\n\r\n<ul>\r\n 	<li>Financial creditors should work together and not pursue an “every lender for itself” policy. Taking unilateral court action may force other creditors to follow a similar approach so that any advantage of taking early court action is probably negated.</li>\r\n 	<li>A standstill period should be given for a limited period to allow the borrower and lenders a breathing space to reach agreement. Of course, as lenders want to keep the borrower’s feet to the fire, the period tends to be relatively short and extended at the banks’ discretion.</li>\r\n 	<li>In situations where there are multiple lenders, the selection of one or more of those lenders to deal directly with the borrower to coordinate a deal that is acceptable to all lenders.</li>\r\n 	<li>If the borrower wants the protection of the standstill period (and if necessary its extension) they should provide access to all relevant information in order for a proper evaluation to be made of its position.</li>\r\n 	<li>There should be fair treatment of financial creditors with no creditor receiving preferential treatment. This will also mean the ranking of calls on a particular debtor in the group has to be preserved via priority deeds or intercreditor arrangements between the lenders.</li>\r\n 	<li>Provided it does not breach preserving existing priority, the movement of debt around a group to where it was incurred or where it can be repaid, or even the movement out of the group onto shareholders if the evaluation shows shareholders actually utilised the debt rather than the borrower, or have shareholders give security over the assets purchased with that debt.</li>\r\n 	<li>Part of the restructuring process in the UAE has been an untangling of personal assets with those of the borrower’s assets, with assets purchased by shareholders or affiliated companies with the borrowers’ money sometimes transferred back to the borrower to use or sell or at least to be secured in favour of the lenders. Of course, whether or not the shareholders benefitted, banks should always be looking to make sure that the shareholders are contributing to the restructuring by providing guarantees over personal assets or guarantees. Shareholders’ advisors will, of course, seek to limit such guarantees (for example, by demanding that they fall away once borrowing reaches more normal leverages levels).</li>\r\n 	<li>The banks should have their professional advisors provide them with an analysis of the likely position on enforcement of security, guarantees and a formal insolvency process so they understand the alternative outcomes to any offer being made by the borrower. This should involve the banks checking that their securities are properly taken and perfected and their finance documentation is enforceable and complete.</li>\r\n 	<li>Where new security is being offered to replace old security, lenders should consider whether existing security may be confirmed as remaining in place alongside new security until any hardening period is over, at which point the existing security may be discharged and the new security “takes over”.</li>\r\n 	<li>Although lenders may continue to allow the borrower to utilise existing working capital facilities during the standstill period, where there is a need for new working capital, such facilities may need to be given priority over the existing financial debt.</li>\r\n 	<li>Consider using ratchet margins to encourage concentration on the most profitable businesses and sale of other assets to reduce debt burden and hence the margin.</li>\r\n 	<li>Consider corporate governance oversight of the borrower by the lenders, ranging from a management committee of lenders having to agree various material decision, to minimal involvement (such as an observer appointed by the lenders to attend key meetings).</li>\r\n 	<li>Recognise that negative publicity affects a borrower’s ability to continue to operate normally as trade creditors stop providing trade credit and subcontractors ask to be paid upfront, squeezing cashflows. Therefore, the parties should consider appointing a professional to manage press coverage or at least coordinate on positive statements and ensure that confidentiality agreements are in place (although it would be idealistic to think that the existence of confidentiality agreements will guarantee no leaks to the press or adverse publicity).</li>\r\n</ul>\r\n&nbsp;\r\n<p class=\"p4\">The “mini insolvency law” referred to earlier is the United Arab Emirates Banks Federation announcement that they are to suspend action against SME borrowers if they have (i) financial distress and (ii) AED50m or more of debt with two or more banks. Instead they will enter into a 90 day standstill agreement and the bank with the biggest exposure will agree how to manage or restructure the debt with that SME borrower. This is a practical example of some of the above principles being put into action on an industry-led basis for a specific area of distress.</p>\r\n<p class=\"p1\">For each restructuring there will of course be specific points of concern or pressure. The lessons and principles set out in this article may not all be applicable to every situation. However, they do provide a foundation on which creditors can build, working with the borrower to reconstruct a sound and functioning lending relationship.</p>\r\n<p class=\"p7\">* Previously published by Bloomberg Business Week Online on 8 September .2016.</p>'),
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(100458, 5463, 'content', 'September 2016\r\n\r\n<hr />\r\n<p class=\"p1\">Regardless of the type of facility, it is important to ensure that the facilities management contract contains certain key provisions to ensure that the facility management contract properly fulfils its required purpose.</p>\r\n<p class=\"p2\"><span class=\"s1\"> </span></p>\r\n<p class=\"p3\"><span class=\"s2\"><strong>Scope of services and the consequences of breaches</strong></span></p>\r\n<p class=\"p1\"><span class=\"s1\">The primary rule for any facility management contract is that the precise scope of the facilities management services to be performed by the service provider are clearly set out in the facilities management contract (typically in a schedule), together with the relevant Key Performance Indicators (or KPIs) which the service provider is required to achieve. </span></p>\r\n<p class=\"p1\"><span class=\"s1\"> Such KPIs should be SMART – Specific, Measurable, Achievable, Relevant and Time based. They need to be clearly defined as well as capable of being assessed objectively. </span></p>\r\n<p class=\"p1\"><span class=\"s1\"> The service provider is usually required to submit to the employer a ‘work plan’ which demonstrates how the service provider will discharge facilities management services and satisfy (if not exceed) the KPIs. The work plan should be a ‘living document’ and should therefore be subject to periodic review and refinement. </span></p>\r\n<p class=\"p1\"><span class=\"s1\"> The KPIs should address the fundamental requirements of the facilities management services and often focus on such things as availability, response times as well as the overall quality of service. However, the precise scope of these requirements needs to be tailored on a case by case basis. </span></p>\r\n<p class=\"p1\"><span class=\"s1\"> To ensure single point responsibility, it is important that the service provider warrants that it has carried out all reasonable investigations and inspections of the asset and that the asset is capable of being managed to the standards prescribed by the facilities management contract. This will eradicate the risk of the service provider seeking to blame the building contractor for any deficiencies in the facilities management services. </span></p>\r\n<p class=\"p1\"><span class=\"s1\"> From a practical perspective, where the asset is a new building, it may be a good idea to have the service provider inspect the asset prior to Take Over and to attend any tests on completion under the construction contract. You may also consider including in the building contract an obligation on the building contractor to provide the service provider with training for the operation and maintenance of the asset. This will need to be addressed at the earliest stages of a project so that it is possible for the construction contract to include clauses to address these issues. </span></p>\r\n<p class=\"p2\"><span class=\"s1\"> </span></p>\r\n<p class=\"p3\"><span class=\"s2\"><strong>Penalties </strong></span></p>\r\n<p class=\"p1\"><span class=\"s1\">In order to incentivise the service provider to comply with the KPIs, it is usual for financial penalties to be levied if the relevant requirements are not attained while bonuses may be available if KPIs are exceeded (particularly if this will confer a financial benefit upon the employer).</span></p>\r\n<p class=\"p1\"><span class=\"s1\"> Careful thought should be given to any penalty regime, especially from a practical perspective and bearing in mind the specific characteristics of the project. For example, a service interruption which occurs during non peak hours may have far less of an impact than would have been the case had the interruption occurred during peak hours, so the penalty regime should reflect this.</span></p>\r\n<p class=\"p1\"><span class=\"s1\"> Additionally, care must be taken when determining the amount of any penalties (which the employer should be able to recover without any need to establish any loss). A balance must be struck between imposing financial penalties which are significant enough to incentivize the service provider to properly discharge its obligations under the facilities management contract but which are not unduly onerous. Indeed, levying severe penalties can be counterproductive as they can damage commercial relationships and may damage the service provider’s cashflow and therefore its ability to adequately provide the facilities management services. </span></p>\r\n<p class=\"p1\"><span class=\"s1\"> To facilitate the recovery of penalty payments, it would be usual for an employer to insist on having a clear right to set off penalties from subsequent payments to be made to the service provider. The employer may also wish to have the ability to make a call on any performance bond provided by the service provider (particularly if the outstanding penalty exceeds a certain threshold).</span></p>\r\n<p class=\"p2\"><span class=\"s1\"> </span></p>\r\n<p class=\"p3\"><span class=\"s2\"><strong>Termination rights </strong></span></p>\r\n<p class=\"p1\"><span class=\"s1\">While most commercial agreements provide for rights of termination in the event of ‘material’ breaches of contract, what constitutes a material breach can be unclear. In the context of facilities management contracts, this uncertainty can be circumvented by stating that a ground for termination is triggered in the event of specified breaches of the KPI regime. </span></p>\r\n<p class=\"p1\"><span class=\"s1\"> For example, a right of termination may be invoked if the financial penalties levied for failure to satisfy the KPIs exceed a stated threshold as this is indicative of consistent poor performance or if a ‘fundamental’ breach occurs (i.e. if there is a complete outage for a significant but defined period of time). </span></p>\r\n<p class=\"p1\"><span class=\"s1\"> Aside from termination of the facilities management contract pursuant to the KPI regime, facilities management contracts should also contain customary grounds for termination (including in the event of insolvency and breaches of any anti corruption laws), while the employer may also wish to have the flexibility to terminate the facilities management contract at its convenience. </span></p>\r\n<p class=\"p1\"><span class=\"s1\"> Termination for convenience should be considered as the term of facilities management contracts can be relatively long (i.e. 5 years would not be unusual) while commercial circumstances can quickly change. In practice, the employer’s right to terminate a facilities management contract at its convenience may be limited to set times, for example on the third anniversary of the date of the facilities management contract.</span></p>\r\n<p class=\"p1\">Whether or not the service provider will be prepared to agree to a right of termination for convenience will be largely determined by the party’s respective bargaining power as well as the compensation payments to which the service provider will be entitled if the right to terminate for convenience is used. The issue of loss of profit is likely to feature highly in any such negotiations.</p>\r\n<p class=\"p2\"><span class=\"s1\"> </span></p>\r\n<p class=\"p3\"><span class=\"s2\"><strong>Monitoring performance </strong></span></p>\r\n<p class=\"p1\"><span class=\"s1\">Regardless of how well a KPI regime is drafted, the KPI regime will have little practical significance unless the service provider’s performance can be effectively monitored and evaluated. </span></p>\r\n<p class=\"p1\"><span class=\"s1\"> It is therefore vital that the service provider submits regular reports (typically on a monthly basis) to the employer regarding the status of the facilities management services. These reports should include details of (and the reasons for) such things as outages, accidents and complaints.</span></p>\r\n<p class=\"p1\"><span class=\"s1\"> The monthly reports should be complemented by the employer having clearly defined inspection and audit rights (including of the service providers records, which survive termination).</span></p>\r\n<p class=\"p4\"><span class=\"s2\"><strong> </strong></span></p>\r\n<p class=\"p3\"><span class=\"s2\"><strong>Scheduled maintenance </strong></span></p>\r\n<p class=\"p1\"><span class=\"s1\">Wear and tear is fact of life and it is therefore important that any facilities management contract makes adequate provision for scheduled maintenance to take place. This is typically performed pursuant to a maintenance plan which has been pre-agreed by the employer (including in terms of scope and cost). </span></p>\r\n<p class=\"p1\"><span class=\"s1\"> The KPI mechanism needs to take into account the scheduled maintenance plan (which should cause as little disruption as possible) and contains appropriate carve-outs. However, care must be taken to ensure that breaches by the services provider are not incorrectly characterized as scheduled maintenance, thus wrongly absolving the service provider from liability.</span></p>\r\n<p class=\"p1\"><span class=\"s1\"> The facilities management contract should also make it clear whether the employer or the service provider is responsible for procuring spare parts. This is particularly important when any stockpile of spare parts provided by the building contractor has dissipated and spare parts need to be independently procured. It is often felt that the service provider is best placed to accept this responsibility in which case the service provider’s remuneration needs to address this issue. </span></p>\r\n<p class=\"p2\"><span class=\"s1\"> </span></p>\r\n<p class=\"p3\"><span class=\"s2\"><strong>Interface with third parties </strong></span></p>\r\n<p class=\"p1\"><span class=\"s1\">Given that facilities management contracts usually concern operating assets and facilities, it is pivotal that the drafting of the facilities management contract makes it clear that the service provider must not delay, interfere with or disrupt the day to day operations of the asset. How the interaction between the service provider and other contractors on site is managed needs to be considered and documented.</span></p>\r\n<p class=\"p1\"><span class=\"s1\"> If any such clause is to be meaningful, it is important that the service provider is fully aware of the day to day use and operation of the asset and this usually means that the employer is required to disclose relevant third party contacts to the service provider. If the employer is to disclose any third party contracts, the employer should be mindful of any confidentiality provisions as well as the need to delete any commercially sensitive information.</span></p>\r\n<p class=\"p3\"><span class=\"s2\"><strong>Handback procedures</strong></span></p>\r\n<p class=\"p1\"><span class=\"s1\">Employers usually periodically re-tender facilities management contracts, including to ensure that it is obtaining the most competitive rates in the market. It is therefore important that the duration of the term is considered and that the facilities management contract contains a clear handover procedure, which will become operational if the employer decides to change service provider.</span></p>\r\n<p class=\"p1\">The handover procedure should include a programme for the service provider’s transition out of managing the asset. The outgoing service provider may be required to provide its successor with appropriate training as well as a license to use any intellectual property rights to perform the facilities management services going forward.</p>\r\n<p class=\"p1\"><span class=\"s1\"> There should also be an inspection of the asset prior to the expiry or termination of the facilities management contract and the service provider should be required to remedy any defects in the asset which are attributable to the service provider’s breach. The employer should have the right to engage a third party to remedy any such defects (at the cost of the service provider) if the service provider fails to adequately correct such defects. </span></p>\r\n<p class=\"p2\"><span class=\"s1\"> </span></p>\r\n<p class=\"p3\"><span class=\"s2\"><strong>Other provisions</strong></span></p>\r\n<p class=\"p1\"><span class=\"s1\">Although the provisions discussed above form the cornerstone of an effective facilities management contracts, it is important that other fundamental clauses are properly addressed bearing in mind the commercial deal and tailored provisions to comply with the relevant laws of the jurisdiction. These include such things as insurance, force majeure, performance security, payment, subcontracting and clauses addressing the respective liability of the parties.</span></p>'),
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(93300, 5069, 'content', 'February 2015\r\n\r\n<hr />\r\n<p class=\"MsoNormal\">The passing of the New Resolutions should come as no surprise with the need for Dubai to further strengthen its Hospitality sector in anticipation of Expo 2020. The New Resolutions fall within the same vision adopted earlier by Dubai, and which we have previously discussed in a paper entitled “Dubai’s New Hotel Industry Initiatives” (See March 2014 Law Update).</p>\r\n<p class=\"MsoNormal\"><strong>Scope of new resolutions</strong></p>\r\n<p class=\"MsoNormal\">The New Resolutions exclusively target Hotel Establishments and Holiday Homes. As per Resolution 48, a Hotel Establishment includes any hotel, resort, hotel apartments, motel, university accommodation, youth houses, economy hotel, floating hotel and any other constructions as determined by the Department of Tourism and Commerce Marketing (the “DTCM”). Pursuant to Resolution 49, a Holiday Home means any furnished property allocated to the conduct of rental service of holiday homes or the activity of renting the same with the purpose of subleasing it to guests in a regular and continuous manner. Such activity must be conducted in accordance with the conditions and standards approved by the DTCM.</p>\r\n<p class=\"MsoNormal\"><strong>Processing fees</strong></p>\r\n<p class=\"MsoNormal\">From 31 December 2014, Hotel Establishments and Holiday Homes are required to pay fees upon applying for approvals, licenses, classification certificates and other formalities before the DTCM. Both New Resolutions are accompanied by a comprehensive list indicating for each type of application the relevant fee to be collected by the DTCM.</p>\r\n<p class=\"MsoNormal\">With respect to Hotel Establishments, Resolution 48 expressly states that the abovementioned fees shall be collected by the DTCM “without prejudice to any applicable fees of any other governmental entity”. In other words, Hotel Establishments shall remain subject to the licensing requirements of the Department of Economic Development (the “DED”) and as such, shall have to abide by the terms of Resolution No. 13 of 2011 issued on 9 June 2011 which sets out fees and penalties payable in connection with matters of general corporate nature, such as the issuance of commercial license, reservation of trade name and so on.</p>\r\n<p class=\"MsoNormal\"><strong>Fines and additional sanctions</strong></p>\r\n<p class=\"MsoNormal\">The New Resolutions also provide for fines that are variable in accordance with the nature of the violation.</p>\r\n<p class=\"MsoNormal\">In relation to Hotel Establishments, these fines range from AED 500 for failure to notify the DTCM prior to commencing any fundamental repairs in the Hotel Establishment, to AED 50,000 for operating a Hotel Establishment prior to the DTCM issuing (a) the license to conduct activity, (b) the classification, or (c) the approval to receive guests.</p>\r\n<p class=\"MsoNormal\">As for Holiday Homes, the fines range from AED 200 for failure to satisfy the secondary classification requirements as determined by the DTCM, to AED 20,000 for operating a Holiday Home despite the issuance of a decision to close it by the DTCM.</p>\r\n<p class=\"MsoNormal\">The amount of a fine provided under the New Resolutions will be doubled in the event of recurrence of the same violation within one year from the date of the initial violation, provided that the fine shall not exceed AED 500,000 in respect of Hotel Establishments and AED 100,000 in respect of Holiday Homes.</p>\r\n<p class=\"MsoNormal\">Also, both New Resolutions allow the DTCM to take various regulatory measures and actions in addition to the imposition of fines.</p>\r\n<p class=\"MsoNormal\">Pursuant to Article 3 of Resolution 48, the DTC may take one or more of the following additional sanctions against the violating Hotel Establishment:</p>\r\n\r\n<ul>\r\n 	<li>Decrease the class of the Hotel Establishment to a lower class;</li>\r\n 	<li>Close the establishment or any of its facilities for a period not exceeding 6 months;</li>\r\n 	<li>Close any facility in the Hotel Establishment permanently;</li>\r\n 	<li>Close the whole of the Hotel Establishment permanently and cancel its license.</li>\r\n</ul>\r\n<p class=\"MsoNormal\">As for Holiday Homes, pursuant to Article 3 of Resolution 49, the DTCM may take any of the following additional sanctions:</p>\r\n\r\n<ul>\r\n 	<li>Issue a warning against the violating person;</li>\r\n 	<li>Suspend the conduct of activity for a period not exceeding 6 months;</li>\r\n 	<li>Cancel the Holiday Home’s license.</li>\r\n</ul>\r\n<p class=\"MsoNormal\">Both new Resolutions are silent on the circumstances in which the DTCM may enforce these additional sanctions and such additional sanctions are currently at the discretion of the DTCM.</p>\r\n<p class=\"MsoNormal\"><strong>Conclusion</strong></p>\r\n<p class=\"MsoNormal\">The New Resolutions mark a significant addition to the laws and regulations currently applied in the tourism sector of Dubai and reinforce the role of the DTCM as a steadfast regulator of the industry.</p>\r\n<p class=\"MsoNormal\">Should you have any questions in connection with this article or the legal issues it covers, please contact Tara Marlow (<a href=\"mailto:t.marlow@tamimi.com\">t.marlow@tamimi.com</a>), Partner, Regional Head of Hospitality.</p>\r\n\r\n<div></div>'),
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(93314, 5069, '_yoast_wpseo_metadesc', 'On 7 December 2014, the Executive Council of Dubai (“EC”) passed Resolution Nos. 48 and 49 of 2014 (the “New Resolutions”) introducing a new set of fees and fines covering, respectively, Hotel Establishments and Holiday Homes in Dubai.'),
(93315, 5070, 'content', 'February 2015\r\n\r\n<hr />\r\n<p class=\"MsoNormal\">However, the adversarial nature of litigation and arbitration frequently drives these protagonists (i.e. parties) further apart as they compete to win the case. A case won or lost often does not change the mindset of parties who continue to be adversaries and go on fighting in appeal after appeal. Motivated by the high costs, delays, stresses and uncertainties associated with litigation and arbitration, business is increasingly turning to mediation as the first resort.</p>\r\n<p class=\"MsoNormal\">In sports-related disputes, national and international sporting institutions, such as the Court of Arbitration for Sport, are now actively encouraging parties to attempt mediation at the first opportunity.  The World Intellectual Property Organisation, which offers sports-related intellectual property dispute  resolution services (sponsorship, merchandising, broadcasting etc.), also promotes mediation.</p>\r\n<p class=\"MsoNormal\">Nonetheless common misperceptions about mediation persist e.g. that it is a soft option or that it gives the impression that an athlete, coach or business is weak or exposed.  As a result, opportunities to find the most satisfactory deal, while maintaining valuable business relationships, may be missed.</p>\r\n<p class=\"MsoNormal\"><strong>What is Mediation?</strong></p>\r\n<p class=\"MsoNormal\">Mediation is a process by which a neutral person (i.e. not connected to either party to the mediation) assists athletes, team representatives, officials or business people, whose negotiations have reached a deadlock, to resume negotiation and work constructively towards a resolution of their dispute or difference.</p>\r\n<p class=\"MsoNormal\">In stark contrast to litigation and arbitration, which typically try to put the parties into the position they were in before the dispute, mediation endeavours to put as wide a spectrum of solutions as the parties are prepared to consider onto the negotiating table, and, through the process of assisting parties to better understand the other’s underlying legal, commercial and personal interests, and to contribute to future and stronger business ties.</p>\r\n<p class=\"MsoNormal\">Relationship building is particularly important in sport where the athlete-team/coach relationship is an important factor affecting performance. This also is true in business where considerable time and money is spent building relations that ensure the long term success of the business. The detrimental effect on relations are a disincentive to enter into, or an adverse by-product of, litigation or arbitration.</p>\r\n<p class=\"MsoNormal\">Litigation, arbitration and mediation encourage parties to confront each other, however a skilful mediator can minimise any deterioration in relations and assist each protagonist to better communicate the legal, commercial and often personal issues at stake in the negotiation. The dynamic of discussion is primarily focused on assisting each party to generate a variety of options, which best address the interests of the other party and thus, identifies a deal satisfactory to both parties.</p>\r\n<p class=\"MsoNormal\">It is this dynamic, which assists athletes, coaches, officials and businesses to a better understanding of the other’s underlying commercial and personal interests, to tailor future discussions to better meet these interests, where possible, and thus, preserve and strengthen relations.</p>\r\n<p class=\"MsoNormal\">Further, parties are considerably more likely to adhere to mediated agreements, than court or arbitral tribunal imposed outcomes, which are often subject to appeal after appeal.</p>\r\n<p class=\"MsoNormal\"><strong>What types of sports-related issues are suited to mediation?</strong></p>\r\n<p class=\"MsoNormal\">Mediation is not a universally appropriate process. Litigation or arbitration is sometimes a better option. The key to the successful use of mediation is knowing whether and when to use it.</p>\r\n<p class=\"MsoNormal\">Circumstances where mediation may not be appropriate are when:</p>\r\n\r\n<ul>\r\n 	<li>negotiations are continuing and a deadlock has not been reached;</li>\r\n 	<li>there is need for a court protection, particularly in intellectual property cases where a party may need to protect or seize assets, which may otherwise be removed to frustrate any order of a court or arbitral tribunal;</li>\r\n 	<li>there is need for a binding precedent, which is particularly true in doping cases where an organisation will want to set a precedent for deterrent purposes, although sometimes mediation before the hearing may reduce the issues and facilitate a speedy trial; or</li>\r\n 	<li>a party has no genuine interest in settlement. However, care should be taken to avoid assuming that a party is disinterested in settlement.  Most people do not enjoy litigation or arbitration, as it is generally frustrating and stressful, they are only interested in the outcome that litigation or arbitration can produce.  If terms can be identified that satisfy their interests, settlement can be achieved.</li>\r\n</ul>\r\n<p class=\"MsoNormal\">In my experience, mediation is beneficial to most disputes provided that the timing of the intervention is appropriate and parties are properly prepared. This is an area in which lawyers have a key role to play as the better prepared party will typically do better at mediation.</p>\r\n<p class=\"MsoNormal\"><strong>Common concerns about mediation</strong></p>\r\n<p class=\"MsoNormal\">There can be a mistaken perception that mediation is a “soft option”, that a successful business does not require assistance negotiating, or that the inevitable outcome is to “split the difference”.</p>\r\n\r\n<ul>\r\n 	<li><em>Will I give the impression my case is weak?</em>  It is assumed that mediated outcomes involve splitting the difference.  In fact, mediation should give each protagonist a better understanding of the strengths and weaknesses of its case and thus, the best alternative to a negotiated settlement.  In practice, it is uncommon for the parties to settle for less than can be achieved at litigation or arbitration, and often negotiated settlements can be achieved that are better than the range of outcomes that are available through litigation or arbitration.</li>\r\n 	<li><em>Is mediation merely a delaying tactic?</em>  Few parties engage in litigation or arbitration for the sake of it and would prefer to avoid the associated distraction and cost, particularly if acceptable terms can be identified at the mediation. Often outcomes that do not seem  possible prior to the mediation, can be achieved at mediation as parties will gain a better understanding of the legal, commercial and often personal issues at stake.</li>\r\n 	<li><em>Are there real cost savings?</em>  This objection is often raised once a case has gone through the various trial preparation steps e.g. exchanges of statements of case, party statements, etc.  Frequently an opportunity has been missed earlier in the case, when sufficient information was available to permit a realistic assessment of the legal case and thus, some legal costs could have been avoided.  While the timing of mediation is essential, even if mediation is not attempted until shortly before trial the costs of doing so, compare favourably to the costs of trial.</li>\r\n 	<li><em>Will I have to disclose my hand?</em>  First, mediation is a confidential process so any information obtained should not be deployed in litigation or arbitration. Second, parties can leave discussions about the legal issues to the lawyers and focus on the commercial interest so that only the strengths of the case are disclosed.  Third, parties can discuss weaknesses in private with their lawyers and/or the mediator and thus control the flow of information. If there is consensus in private that an acknowledgment of liability may break the deadlock and generate movement towards settlement, a party may give the mediator permission to share it.</li>\r\n</ul>\r\n<p class=\"MsoNormal\">However, these considerations while important reflect a key misconception about mediation. The focus of mediated discussions is always on commercial options, with litigation or arbitration only used if a negotiated agreement cannot be reached.</p>\r\n<p class=\"MsoNormal\">In this writer’s experience, commercial matters that have been settled through mediation include:</p>\r\n\r\n<ul>\r\n 	<li>design and construction of sports facilities;</li>\r\n 	<li>sport, team, player and event sponsorship;</li>\r\n 	<li>sports franchise and partnerships;</li>\r\n 	<li>licensing, intellectual property and broadcasting; and</li>\r\n 	<li>player contracts and relations between athletes and other stakeholders.</li>\r\n</ul>\r\n<p class=\"MsoNormal\"><strong>\r\nDo legal representatives have a role?</strong></p>\r\n<p class=\"MsoNormal\">The lawyer, whether external or in-house, has a vital role in sports-related mediation.</p>\r\n<p class=\"MsoNormal\">First, it is essential that a party entering into mediation have a proper understanding of its prospects and options if a negotiated settlement cannot be achieved. A party must have a thorough understanding of all the facts and risk factors affecting the case to make a fully informed decision on whether there is a better alternative to settlement offers made at mediation.</p>\r\n<p class=\"MsoNormal\">Second, the lawyer may be required to attend the hearing to demonstrate to the other party that the legal position being presented has substance and needs to be taken seriously. Effective presentation skills are vital to demonstrating credibility and concealing weakness.</p>\r\n<p class=\"MsoNormal\"><strong>Conclusion</strong></p>\r\n<p class=\"MsoNormal\">In the Middle East, there has been huge investment in bringing sports into the region.  In a recent report by Repucom  (a provider of sporting intelligence to business), they were quoted to say <em>“The Middle East and Asia are emerging as global giants in sports sponsorship and ownership and this trend shows little signs of slowing”</em>.  Repucom also concluded that the UAE is the largest single-jurisdiction source of title sponsorship funding in professional sports globally, with 37% of global investments in sport coming from the UAE.  According to a PwC report, the EMEA (Europe, Middle East and North Africa) market is currently ranked as the second largest sports market in the world, and is worth an estimated US$44.8 billion, which represents nearly a third of the global market. In such a valuable and commercial industry, the types of dispute that can arise are varied and often involve complex legal issues. Reputation and relationships are key to maintaining a place in this market.  Mediation should always be an option for any dispute given its primary advantage is to encourage parties to focus on devising commercial solutions that best meet their interests and preserve relationships, with litigation or arbitration prospects informing only whether there is a better alternative to a negotiated offer.</p>\r\n<strong>Niall Clancy (</strong><a href=\"mailto:n.clancy@tamimi.com\"><strong>n.clancy@tamimi.com</strong></a><strong>) is an Associate in the construction &amp; infrastructure disputes practice and a key member of Al Tamimi’s dedicated Sports Law practice.  Niall is a highly experienced Alternative Dispute Resolution Lawyer with more than eleven years of professional experience, having acted for athletes, trainers sporting organisations in a wide range of sports-related disputes.</strong>\r\n<div>\r\n<div>\r\n<div class=\"msocomtxt\">\r\n<p class=\"MsoCommentText\"></p>\r\n\r\n</div>\r\n</div>\r\n</div>'),
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(93338, 5071, 'content', 'February 2015\r\n\r\n<hr />\r\n<p class=\"MsoNormal\"><em>Reliable data, along with clear standards and procedures, leads to improved knowledge, efficiency and quality in the delivery of healthcare. In this article, we look at the general approach to data in a healthcare context in both Abu Dhabi and Dubai, with a particular focus on data protection aspects.</em></p>\r\n<p class=\"MsoNormal\"><strong>Abu Dhabi</strong></p>\r\n<p class=\"MsoNormal\"><strong>HAAD Data Standards and Procedures</strong></p>\r\n<p class=\"MsoNormal\">Health Authority – Abu Dhabi (HAAD) is responsible for the healthcare sector in the Emirate of Abu Dhabi. HAAD has identified data transparency and better public information as fundamental to ensuring the efficient delivery of healthcare. It has issued the ‘HAAD Data Standards and Procedures’ (the ‘Standards’, dated 24 January 2008 and most recently reviewed on 14 April 2014) to provide governance structures and regulatory parameters for the collection, use, and publication of health data - subject to obligations to respect privacy and confidentiality.</p>\r\n<p class=\"MsoNormal\">The Standards provide for the establishment of a Data Standards Panel. This panel has representatives of HAAD, as well as healthcare providers and insurers. The panel is responsible for reviewing and recommending changes to electronic data exchange standards, for providing direction with regard to technical standards and implementation, and for communicating data-related developments to relevant parties.</p>\r\n<p class=\"MsoNormal\"><strong>Technical aspects</strong></p>\r\n<p class=\"MsoNormal\">The Standards are primarily focused on technical considerations relating to data in a healthcare context in Abu Dhabi. They address aspects including the applicable codes to use for specific data elements, the permissibility of electronic data storage, and the appropriate guidelines and specifications for implementing, maintaining and improving information security.</p>\r\n<p class=\"MsoNormal\">Along with compliance with HAAD’s data standards, code standards and electronic data exchange standards, the Standards also specify that electronic data exchange between health providers and insurance companies be subject to an effective ‘Electronic Partners Agreement’ - a default version of which has been made available by HAAD.</p>\r\n<p class=\"MsoNormal\"><strong>Confidentiality</strong></p>\r\n<p class=\"MsoNormal\">The Standards contain specific guidance with regard to confidentiality. This includes confidentiality in the context of patient health information, as well as confidentiality in the context of commercially sensitive information that it may be necessary to communicate between different parties.</p>\r\n<p class=\"MsoNormal\">The Standards require all partners to develop, institute and periodically update standard operating policies and procedures that protect confidential health information, and to educate staff about such policies and procedures. The policies and procedures need to be available for inspection, and their use must be demonstrable on request.  While the Standards refer to HAAD making default policies and procedures available, at the time of writing we were unable to determine whether such default documentation has been made available.</p>\r\n<p class=\"MsoNormal\">Within the Standards, there is specific guidance on the following confidentiality-related aspects:</p>\r\n\r\n<ul>\r\n 	<li><strong>Necessary and authorized access</strong>: Access to confidential health information must be limited to only the minimum necessary personnel, and there must be a means to authenticate authorized users of such information.</li>\r\n 	<li><strong>Unauthorized access</strong>: Confidential health information must be kept from unauthorized access, and in the event of any data breach HAAD must be notified (including with specific detail relating to the breach, and any subsequent unlawful disclosure). There must be a published sanctions policy, and this must be communicated to staff.</li>\r\n 	<li><strong>Storage and transmission of confidential health information</strong>: Policies and procedures for protecting stored confidential health information, and for transmitting confidential health data (including data encryption), need to be developed and implemented.</li>\r\n</ul>\r\n<p class=\"MsoNormal\"><strong>HAAD Policies</strong></p>\r\n<p class=\"MsoNormal\">In December 2012, HAAD issued a number of policy manuals intended to define its own responsibilities, as well as those of public and private healthcare providers, healthcare professionals and insurance companies. These policy manuals, and related standards, provide a framework – including minimum acceptable levels – with which HAAD, and all healthcare providers, professionals and insurance companies operating in Abu Dhabi, need to comply.</p>\r\n<p class=\"MsoNormal\">The four HAAD policies are:</p>\r\n\r\n<ul>\r\n 	<li>the Healthcare Regulator Policy,</li>\r\n 	<li>the Healthcare Provider Policy,</li>\r\n 	<li>the Healthcare Professional Policy, and</li>\r\n 	<li>the Healthcare Insurer Policy.</li>\r\n</ul>\r\n<p class=\"MsoNormal\">While not their core focus, each of these policies contains provisions that touch on patient information, and data protection considerations relating to such personal information.</p>\r\n<p class=\"MsoNormal\">The Healthcare Regulator Policy confirms that, as the regulator, HAAD is empowered to define, approve and communicate the Standards, and that the Standards may make provision for all matters relating to the collection, management, reporting and exchange of healthcare data. Along with other aspects reflected in the Standards, the examples referenced in the Healthcare Regulator Policy include the requirement to obtain a patient’s informed consent before collecting healthcare data, and the right of patients to be granted full access, upon request and within a reasonable timeframe, to their own healthcare information.</p>\r\n<p class=\"MsoNormal\">The Healthcare Provider Policy, the Healthcare Professional Policy, and the Healthcare Insurer Policy all reflect duties relating to data management and confidentiality. These include:</p>\r\n\r\n<ul>\r\n 	<li>a duty to ensure compliance at all times with HAAD regulatory requirements relating to the right of patients to access their own information;</li>\r\n 	<li>a duty to treat as confidential all information in relation to patients; and</li>\r\n 	<li>a duty to refrain from releasing patient information unless permitted to do so by HAAD, or pursuant to the applicable HAAD policy.</li>\r\n</ul>\r\n<p class=\"MsoNormal\">HAAD has also issued a Charter of Patient Rights and Responsibilities, and this 2008 document also touches on the protection of patient information. Amongst other rights and expectations, the Charter states that patients have the right to privacy of both person and information, including the following rights and expectations:</p>\r\n\r\n<ul>\r\n 	<li>the right to privacy during treatment,</li>\r\n 	<li>the right to access their medical records and medical information,</li>\r\n 	<li>the right to have all clinical and pharmaceutical records kept fully updated and documented,</li>\r\n 	<li>the right to have personal details and records kept fully confidential and protected from loss and misuse, and</li>\r\n 	<li>the right to have all staff with whom they interact maintain a high degree of professionalism and confidentiality.</li>\r\n</ul>\r\n<p class=\"MsoNormal\">In an earlier edition of Law Update<a class=\"msocomanchor\" href=\"#_msocom_1\">[r1]</a>  (February 2014) we made the observation that underpinning the use of personal data in a healthcare context is trust. Patients need to be able to trust their healthcare providers and medical practitioners. In the absence of trust, patients are less likely to regularly use the same providers or practitioners, and more likely to withhold personal information or provide personal information that is inaccurate. Where there is no trust, patient data becomes less reliable, and treatment outcomes may suffer as treatment decisions are based on incomplete or incorrect information. In this type of environment, healthcare operations are less efficient, and reputations suffer as providers or practitioners are seen as responsible for less-than-ideal outcomes. Where personal data is unreliable, public health suffers as researchers and policy-makers base their theories and projections on incorrect assumptions, and resources are used inefficiently.</p>\r\n<p class=\"MsoNormal\">The various HAAD policies, and the Standards, need to be read together to better understand the scope of obligations relating to patient data placed on those participating in the provision of healthcare in Abu Dhabi, but it is fair to say that the approach taken by HAAD in respect of personal information goes some way to establishing a climate of trust in the context of the provision of healthcare services in Abu Dhabi.</p>\r\n<p class=\"MsoNormal\"><strong>Dubai</strong></p>\r\n<p class=\"MsoNormal\">The Dubai Health Authority (DHA) is responsible for the healthcare sector in the Emirate of Dubai. The DHA also appreciates the importance of having data and information that supports the delivery of quality healthcare. This is reflected in the DHA’s Hospital Regulation 2012, which includes regulations relating to health records and the management of healthcare information. As one would expect, the Health Records requirements include a clear obligation to ensure that patient information is treated as confidential and protected from loss, tampering, alteration, destruction, and unauthorized or inadvertent disclosure.</p>\r\n<p class=\"MsoNormal\">The DHA has also established a department, within its Health Policy and Strategy Sector, to improve access to high quality health information, and to facilitate the efficient flow of information amongst health sector stakeholders - the DHA, healthcare providers, insurers and patients. The Health Data and Information Analysis Department is responsible for creating processes that harmonise standards in the field of healthcare information in Dubai, enabling and improving interoperability of healthcare systems and the exchange of healthcare data, while ensuring information security and privacy concerns are addressed.</p>\r\n<p class=\"MsoNormal\">The Health Data and Information Analysis Department has indicated that its aim is to ensure that patients are able to control what information is collected about them, and how it is used, who is able to access it and for what purposes, and how such information is maintained. Further information as to the manner in which such privacy concerns will be addressed is keenly awaited.</p>\r\n<p class=\"MsoNormal\"><em>Al Tamimi &amp; Company’s Technology, Media &amp; Telecommunications team regularly advises on data and healthcare technology related matters, including data protection and information security matters. For further information, please contact Nick O’Connell</em> – <a href=\"mailto:n.oconnell@tamimi.com\">n.oconnell@tamimi.com</a></p>\r\n\r\n<div>\r\n<div>\r\n<div class=\"msocomtxt\">\r\n<p class=\"MsoCommentText\"></p>\r\n\r\n</div>\r\n</div>\r\n</div>'),
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(93357, 5072, 'content', 'February 2015\r\n\r\n<hr />\r\n<p class=\"MsoNormal\">Given the complexity of the issues relating to compensation as a remedy for breach of contract, Iraqi law, namely the Iraqi Civil Code no. 40 of 1951 which is the law regulating the general provisions for the origins of obligations, has addressed the matter of compensation and placed the general rules upon which the courts rely in connection with relevant claims filed before it. In this article we address the rules upon which compensation is awarded and other issues relating to compensation such as liquidated damages.</p>\r\n<p class=\"MsoNormal\">Pursuant to the Iraqi Civil Code, compensation is not owed should any of the following conditions be met:</p>\r\n\r\n<ul>\r\n 	<li>The relevant obligation became impossible to fulfil;</li>\r\n 	<li>The debtor failed to fulfil the obligation due to foreign cause of force majeure;</li>\r\n 	<li>The fulfilment of the obligation was deemed to be overburdening; or,</li>\r\n 	<li>The other party failed to fulfil its obligations as well.</li>\r\n</ul>\r\n<p class=\"MsoNormal\">The creditor may insist on specific performance of the contract, provided that the relevant obligation is inappropriate or impossible unless done by the debtor, the creditor may resort to the court to oblige the debtor to perform and the debtor will face have to paying a deterrent fine “threating” penalty in the event of failing to abide.  If the debtor insists on not performing, the court shall determine the compensation amount to be paid by the debtor, and to take in consideration the losses suffered by the creditor and the intransigence of the debtor.</p>\r\n<p class=\"MsoNormal\">Contractual parties may agree the compensation amount when they enter into a contract or afterwards. If the parties fail to agree the amount of compensation and the law does not specify the amount, the court shall have the power to assess the amount of compensation. If there is no agreed amount of compensation in the contract, or by law, then the court can estimate it based on the principle of “loss of profit or occurred losses” as a result of non-execution or delay.  The damage compensation should cover the expected direct damage of either loss of profit or occurred losses, unless the debtor has committed a fraud or a gross error, then the compensation for the direct damage shall be for the expected and unexpected damages.  In case of estimating and assessing the compensation by the court, the latter shall refer this matter to specialized experts to assess at their discretion.</p>\r\n<p class=\"MsoNormal\">If the parties agreed a compensation amount in their contract, i.e. liquidated damages clause,  and the debtor was successful in proving that the losses suffered by the creditor were less than the agree upon amount, the court may reduce the relevant amount to correspond with the actual damage suffered. Any agreement attempting to restrict the court’s power to review such a clause shall be deemed null.  It is also important to note that the creditor may not claim for compensation more than the agreed upon liquidated damages amount, even if the actual damages exceed that amount unless the creditor proves that the debtor has committed a gross error or fraud.</p>\r\n<p class=\"MsoNormal\"><strong>The compensation when the object of the obligation is cash money</strong></p>\r\n<p class=\"MsoNormal\">If the object of the obligation is an amount of money, which was disclosed at the time when the obligation arose, and there was a delay in payment of the money by the debtor, there will be interest charged against the debtor for the delay. The interest will be calculated at 4% in civil matters and 5% in commercial matters.  In addition, the parties can agree the interest to be assessed against delay of payment but the interest shall not exceed 7%. If the interest exceeds the cap of 7%, then the court will reduce it to 7%.</p>\r\n<p class=\"MsoNormal\">The interest would be payable at the maturity of the debt (legally or by agreement) and the creditor is not required to prove that any damages were suffered due to the delay in payment.   The creditor may claim additional compensation if the creditor proves that it suffered damages which exceeds the interest amount and due to fraud or harmful act of the debtor.</p>\r\n<p class=\"MsoNormal\"><strong>Legal notice requirement</strong></p>\r\n<p class=\"MsoNormal\">Iraqi law requires a creditor to send a notice demanding payment except in certain circumstances (see below).  The creditor and debtor may also agree that the debtor shall be deemed notified as of the due date without the need for the creditor to serve a written notice on the debtor.</p>\r\n<p class=\"MsoNormal\">There is no need to send a notice of demand to the debtor in the following cases:-</p>\r\n\r\n<ul>\r\n 	<li>If the parties agreed that the debtor’s contractual obligation is due once the creditor’s contractual obligation has been performed and the creditor does perform or the debtor’s contractual obligation is to be performed at a certain time and that time has passed;</li>\r\n 	<li>If the contractual obligation of the debtor is to abstain from doing something and the debtor breached this obligation;</li>\r\n 	<li>If the contractual obligation is to restore something the debtor was aware was stolen or received unlawfully;  or</li>\r\n 	<li>If the debtor stated in writing that he is not willing to fulfil his contractual obligations.</li>\r\n</ul>\r\n<p class=\"MsoNormal\"><strong>Limitation of liability</strong></p>\r\n<p class=\"MsoNormal\">Iraqi law permits the parties to agree to limit or exclude the debtor from contractual liability arising from the failure to perform its obligations except the liability that arises from his/her fraud or gross error. Moreover, the parties may not agree to exclude liability for fraud and gross negligence committed by employees of the debtor.  Additionally, the parties may agree that the debtor shall not bear liabilities arising from an act of god or force majeure.</p>\r\n<p class=\"MsoNormal\"><strong>Penalties (Delay penalties)</strong></p>\r\n<p class=\"MsoNormal\">The Iraqi Government Contracts’ law No. 87 of 2004 (The “Government Contracts’ law “) and the Enforcement of the Government Contracts’ Instructions No. 21 of 20142008 (The “Government Contracts’ Instructions “) have addressed the delay penalties in the governmental contracts and provided that the same should be imposed against the contracting party if the party has delayed in fulfilling its contractual obligations provided that the maximum amount of the delay penalties shall not exceed 10% of the relevant contract value. The delay penalties are further adapted to be a financial penalty imposed by the administration against the contracting party for breaching the general laws.  Delay penalties are a manner through which the administration obliges the contracting party to pay its obligations in due time.</p>\r\n<p class=\"MsoNormal\">Iraqi courts, including the Court of Cassation, have confirmed that the delay penalty is a penalty behind which is a security/guarantee in terms of obliging with the contracting obligations.</p>\r\n<p class=\"MsoNormal\">The delay penalty is also a contractual penalty and conventional compensation which shall not be imposed unless stipulated in the relevant contract between the non-governmental contracted parties. Being a conventional compensation; the same shall be imposed without further excuses (unless otherwise provided therein), whereas the Iraqi courts rule for imposing the delay penalties once the  delay and the occurred damage as a result thereof are is proven to have had taken a place for reasons other than force majeure or foreign cause.</p>\r\n<p class=\"MsoNormal\">For non governmental contracting parties, the delay penalty is a contractual penalty and conventional compensation shall not be imposed unless stipulated in the contract. The Iraqi courts will rule regarding the imposition of the delay penalties once the delay and resultant damage are proven to have taken place for reasons other than force majeure or foreign cause.</p>\r\n<p class=\"MsoNormal\"><strong>Conclusion</strong></p>\r\n<p class=\"MsoNormal\">In summary of the above, the compensation in accordance with the Iraqi law is one of the following, which are subject to the conditions defined by virtue of the law:</p>\r\n\r\n<ul>\r\n 	<li>Compensation ordered by court: Compensation is assessed by the competent judge in his discretion to hold a party liable  their breach of contract or delay in performance;</li>\r\n 	<li> Liquidated damages: Where the parties agree on the compensation amount prior to the dispute the court will respect the parties’ agreement but may reduce the amount if the actual losses are less than the agree upon amount; or,</li>\r\n 	<li> Legal compensation: Iraqi law proves for certain compensation by law such as interest on non-fulfilment of obligations related to cash money.</li>\r\n</ul>\r\n<p class=\"MsoNormal\">Notwithstanding the above, a party’s contractual liability may be exempted should the parties agree on exemption or limitation, noting however that the liability arising from fraud or gross negligence cannot be exempted.</p>'),
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(93372, 5073, 'content', 'February 2015\r\n\r\n<hr />\r\n<p class=\"MsoNormal\">The term “trademark” normally refers to a conventional set of marks (e.g. letters, numerals, words, logos, pictures, symbols, or combinations of one or more of these elements) provided that such signs are capable of distinguishing the goods and/or services of one trader to the other. However, certain types of non-conventional trademarks have become more widely accepted in recent times as a result of legislative changes expanding the definition of \"trademark\".<strong> </strong></p>\r\nA non-conventional trademark, also known as a nontraditional trademark, is any new type of trademark which does not belong to a pre-existing, conventional category of trade mark, and which is often difficult to register, but which may nevertheless fulfil the essential trademark function of uniquely identifying the commercial origin of products or services.  The term is broadly inclusive as it encompasses marks which do not fall into the conventional set of marks mentioned above, and therefore includes marks based on appearance, shape, sound, smell, taste and texture. The most important factor when it comes to conventional or non-conventional trademarks is that the mark is distinguishable.\r\n\r\nNon-conventional trademarks may therefore be <em>visible </em>signs (e.g. colours, shapes, moving images, holograms and positions), or <em>non-visible</em> signs (e.g. sounds, scents, tastes and textures). One famous case is the Tiffany Blue which is synonymous with Tiffany &amp; Co., the New York City jewellery company. <em>Tiffany &amp; Co.’s unique shade of the colour blue, as displayed on its packaging and boxes, is trademarked. Accordingly Tiffany &amp; Co. is protected from other jewellers who would use the same colour for boxes or packaging and thereby cause brand confusion. </em>\r\n\r\nSimilarly in the UAE, colours have been granted trademark protection when used in specific, limited contexts such as packaging or marketing. In fact, in April of 2007, the UAE trademark office granted trademark protection for a particular shade of orange used on the packaging of a rice product. In recent times, sounds have been increasingly used as trademarks in the marketplace. However, traditionally a sound was not considered to be a trademark and it has been difficult to protect sound as a trademark through registration.\r\n\r\nIn Bahrain, by virtue of an official Circular number 14/23-3 dated 18 November 2014, the Trademark Registry has now started accepting trademark applications for sound trademarks.  The requirements to file a sound trademark in Bahrain are:\r\n<ul>\r\n 	<li class=\"MsoNormal\">Musical note composition of the sound trademark;</li>\r\n 	<li class=\"MsoNormal\">Compact Disc containing the music files in MP3 audio file or any other compatible format, together with other required documents for registering a trademark, such as legalised power of attorney and legalised certificate of incorporation of the applicant company.</li>\r\n</ul>\r\n<p class=\"MsoNormal\">In practice, when seeking registration of non-conventional trademarks such as sounds and colors it is important to remember that such identifiers are registrable and enforceable so long as they are capable of identifying the trader as the source of the goods and/or services. As such, maintaining distinctivity and exclusivity is an important factor when considering registration of non-conventional trademarks.</p>'),
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(93391, 5074, 'content', 'February 2015\r\n\r\n<hr />\r\n<p class=\"MsoNormal\">For example, Clause 9.4 of the revised LCIA Arbitration Rules provides:</p>\r\n<p class=\"MsoNormal\"><em>Subject always to Article 9.14 below, in the case of emergency at any time prior to the formation or expedited formation of the Arbitral Tribunal (under Articles 5 or 9A), any party may apply to the LCIA Court for the immediate appointment of a temporary sole arbitrator to conduct emergency proceedings pending the formation or expedited formation of the Arbitral Tribunal (the “Emergency Arbitrator”).</em></p>\r\n<p class=\"MsoNormal\">Likewise, Article 29(1) of the ICC Rules provides:</p>\r\n<p class=\"MsoListParagraph\"><em>A party that needs urgent interim or conservatory measures that cannot await the constitution of an arbitral tribunal (“Emergency Measures”) may make an application for such measures pursuant to the Emergency Arbitrator Rules in Appendix V. Any such application shall be accepted only if it is received by the Secretariat prior to the transmission of the file to the arbitral tribunal pursuant to Article 16 and irrespective of whether the party making the application has already submitted its Request for Arbitration.</em></p>\r\n<p class=\"MsoNormal\">In each case, the Emergency Arbitrator procedure applies unless the parties have agreed to opt out of the Emergency Arbitrator provisions (or in the case of the ICC, the parties have agreed to another pre-arbitral procedure that provides for the granting of conservatory, interim or similar measures. Article 29(6), ICC Rules)). Thus, agreement to the LCIA or the ICC Rules entails party consent to the appointment of an emergency arbitrator who has the power to grant interim or conservatory measures unless the parties specifically opt out.</p>\r\n<p class=\"MsoNormal\">Use of the Emergency Arbitrator process is restricted. Thus, it may only be invoked where:</p>\r\n\r\n<ul>\r\n 	<li>The interim or conservatory measure cannot wait the constitution of an arbitral Tribunal; and</li>\r\n</ul>\r\n<ul>\r\n 	<li>Application has been made prior to constitution of the arbitral tribunal</li>\r\n</ul>\r\n<p class=\"MsoNormal\"></p>\r\n<p class=\"MsoNormal\">The Emergency Arbitrator’s  decision is to take the form of an order in the case of the ICC or an order or award in the case of the LCIA. However, the ICC Rules provide that the emergency arbitrator\'s order “<em>shall not bind the arbitral tribunal with respect to any question, issue or dispute determined in the order. Any ICC arbitral tribunal may modify, terminate or annul the order or any modification thereto made by the emergency arbitrator</em>” (Article 27(3)). Further, the LCIA Rules stipulates that an order or award of LCIA Emergency Arbitrator “<em>may be confirmed, varied, discharged or revoked, in whole or in part, by order or award made by the Arbitral Tribunal upon application by any party or upon its own initiative</em>”. (Article 9.11).</p>\r\n<p class=\"MsoNormal\">The foregoing may have serious implications for the enforcement of emergency arbitrator\'s orders in the UAE, considering that such measures:</p>\r\n\r\n<ul>\r\n 	<li>are “orders” and not “awards” (at least in the case of ICC arbitrations); and</li>\r\n</ul>\r\n<ul>\r\n 	<li>may be varied by the arbitral tribunal, when appointed.</li>\r\n</ul>\r\n<p class=\"MsoNormal\"></p>\r\n<p class=\"MsoNormal\">These characteristics may persuade UAE courts not to enforce the emergency arbitrator’s order on the basis that it is not a final award, especially since the UAE civil procedural code only appears to envisage the enforcement of final arbitral awards.</p>\r\n<p class=\"MsoNormal\">The foregoing potential difficulty is not unique to the UAE; the enforcement of the emergency arbitrator’s order may be problematic in other States, as well.  The provisions of the New York Convention may not be applicable to the emergency arbitrator’s decision as it is provided that it shall take the form of an “order” and will not be an award.</p>\r\n<p class=\"MsoNormal\">Where the order or award “debtor” does not comply with the emergency arbitrator’s order or award, as the case may be, it may be found to have breached the arbitration clause (and the contract of which it forms a part), since the ICC rules provide, as noted above, that “<em>the parties undertake to comply with any order made by the emergency arbitrator.” </em>But this will be of little comfort to the “order creditor” if the order is not quickly enforced.</p>\r\n<p class=\"MsoNormal\">There remains room in such a situation for the non-defaulting party to apply to the UAE courts for the appropriate interim relief. For example, Article 29(7) of the ICC Rules provides:</p>\r\n<p class=\"MsoNormal\"><em>The emergency arbitrator provisions are not intended to prevent any party from seeking urgent interim or conservatory measures from a competent judicial authority at any time prior to making an application for such measures, <strong>and in appropriate circumstances even thereafter, pursuant to the Rules</strong>. Any application for such measures from a competent judicial authority shall not be deemed to be an infringement or a waiver of the arbitration agreement. … (emphasis added)</em></p>\r\n<p class=\"MsoNormal\">Hence, it seems open to the non-defaulting party to pursue judicial relief where the other party fails to comply with the Emergency Arbitrator’s order or award, as applicable. However, it is evident that the efficacy of such action will be limited in those circumstances.</p>\r\n<p class=\"MsoNormal\">On the other hand, UAE local courts have an extensive power to grant interim measures even if they do not have jurisdiction, e.g. if there is an arbitration clause between the parties. Article 22 of the UAE Code of Civil procedure provides that:</p>\r\n<p class=\"MsoNormal\"><em>The Court shall have jurisdiction to determine preliminary issues and interlocutory applications in the original action within their jurisdiction and shall also have jurisdiction to determine any application connected with such action which the proper course of justice requires that it be heard with it, and <strong>they shall likewise have jurisdiction to make orders for expedited and preservatory procedures to be carried out in the State notwithstanding that they do not have jurisdiction in the original action</strong>. [our emphasis added]</em></p>\r\n<p class=\"MsoNormal\">Thus, while that an Emergency Arbitrator has 15 days to issue his order,<a href=\"#_ftn1\">[1]</a> paragraph 2 of article 140 of the UAE Civil Procedures Code requires the UAE courts to issue interim relief within 24 hours from the date of making the request for an interim order.<a href=\"#_ftn2\">[2]</a> Moreover, unlike institutional rules, emergency relief may be obtained in the Abu Dhabi courts on an <em>ex parte</em> basis and it is submitted that the threshold for obtaining such relief may be lower than will apply in the case of institutional emergency arbitrator relief.<a href=\"#_ftn3\">[3]</a>  In our view, therefore, seeking an interim measure from the UAE courts in relation to a UAE-related arbitration is likely to be much faster than seeking relief from an Emergency Arbitrator.</p>\r\n<p class=\"MsoNormal\">Furthermore, the enforcement of interim measures granted by an Emergency Arbitrator in the UAE may prove to be problematic. The UAE courts will retain jurisdiction in relation to such measures even if they do not have jurisdiction to review the merits themselves. In this respect, the Federal Supreme Court has commented, as follows:</p>\r\n<p class=\"MsoNormal\"><em>“Urgent and precautionary decisions that are executed in the State – are decision that fall within the jurisdiction of the State’s courts, notwithstanding the event that the courts  do not have jurisdiction to review the main case..”</em></p>\r\n<p class=\"MsoNormal\">Moreover, the Dubai Court of Cassation has ruled:</p>\r\n<p class=\"MsoNormal\"><em>“If the parties did not agree explicitly – whether in the main contract or in an arbitration deed that follows it – that the arbitrators can undertake interim, precautionary or urgent measures – it means – then that their agreement to refer their dispute to arbitration in relation to the main contract does not give the arbitrators the authority or jurisdiction to decide on such procedures or issue. As may be seen, the Dubai Court is silent on the enforcement of such measures under UAE.</em><em>”</em><strong><em> </em></strong></p>\r\n<p class=\"MsoNormal\"> The foregoing raises doubts concerning the efficacy of  Article 29(6) of the ICC rules, which provides that:</p>\r\n<p class=\"MsoNormal\"><strong><em>“6 . The Emergency Arbitrator Provisions shall not apply if: </em></strong></p>\r\n<p class=\"MsoNormal\"><strong><em>b) the parties have agreed to opt out of the Emergency Arbitrator Provisions..”</em></strong></p>\r\n<p class=\"MsoNormal\">This approach may fail to evidence the explicit prior agreement of the parties that the arbitrator has authority to issue interim orders (which would be achieved if Article 29(6) required the Parties’ express agreement to the application of the Emergency Arbitrator provisions).</p>\r\n<p class=\"MsoNormal\">The foregoing issues, which we have identified in relation to Emergency Arbitrator orders and awards, will become especially problematic if the counterparty or a third party refuses to abide by the order. Parties thus may be better served by resorting to the national courts from the beginning, rather than the Emergency Arbitrator, to obtain such measures in UAE-related arbitrations, since this may be more effective and avoid unnecessary cost and delay.</p>\r\n<p class=\"MsoNormal\">In conclusion we suggest that there may be merit to parties, who have consented to institutional arbitration (which permits emergency arbitrator relief) in the UAE, to expressly opt out of such arrangements, at least as they are currently drafted and pending clarification of UAE judicial attitudes to the enforcement of such measures</p>\r\n\r\n<div>\r\n\r\n&nbsp;\r\n\r\n<hr size=\"1\" />\r\n\r\n<div>\r\n<p class=\"MsoFootnoteText\"><a href=\"#_ftnref\">[1]</a> . Article 6. 4 of Appendix V of the ICC Rules states that: “The Order shall be made no later than 15 days from the date on which the file was transmitted to the emergency arbitrator pursuant to Article 2(3) of this Appendix. The President may extend the time limit pursuant to a reasoned request from the emergency arbitrator or on the President’s own initiative if the President decides it is necessary to do so.”</p>\r\n\r\n</div>\r\n<div>\r\n<p class=\"MsoFootnoteText\"><a href=\"#_ftnref\">[2]</a> -Article 140(2) provides that: “2 - The judge or the president of the division, as the case may be, shall make his order in writing on one of the copies of the petition no later than one day following the submission thereof”</p>\r\n\r\n</div>\r\n<div>\r\n<p class=\"MsoFootnoteText\"><a href=\"#_ftnref\">[3]</a> Cf. J. Lundstedt,, “SCC Practice: Emergency Arbitrator Decisions 1 January 2010 – 31 December 2013” (http://www.sccinstitute.com/filearchive/4/46698/SCC%20practice%202010%20-%202013%20emergency%20arbitrator_FINAL.pdf) (last accessed on 18 January 2015)</p>\r\n\r\n</div>\r\n</div>\r\n<div>\r\n<div>\r\n<div class=\"msocomtxt\">\r\n<p class=\"MsoCommentText\"></p>\r\n\r\n</div>\r\n</div>\r\n<div></div>\r\n</div>'),
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(93418, 5075, 'content', 'February 2015\r\n\r\n<hr />\r\n<p class=\"MsoNormal\">At the time of writing, three of Dubai’s banks have released their annual results and each reported strong growth across the key metrics by which they are measured (profit, net income and assets). Buoyed by such positive news the industry can look forward to continued success into 2015.</p>\r\n<p class=\"MsoNormal\">The Central Bank of the UAE has helpfully assisted in getting a relatively current peek into the banking industry’s future thinking by the release of its Credit Sentiment Survey. This is the first release of its kind by the Central Bank and the survey details UAE lending institutions’ thoughts on credit sentiment based on responses from senior credit officers. Al Tamimi commends the Central Bank on this initiative as it will provide forward guidance against which eventual results can be measured that will create a deep pool of qualitative information over time. Moreover, it will help inform the lending industry and the public about what is an important area of the economy.</p>\r\n<p class=\"MsoNormal\">The results of the survey were widely reported at the time of release and revealed lenders’ views on a number of important areas, including credit growth and credit standards in business and personal lending. Expectations of demand growth in each area was positive (although growth is slowing) and it will be interesting to see if this sentiment continues in the second release in April which will cover the first quarter of 2015 (especially given the trend in oil prices).</p>\r\n<p class=\"MsoNormal\">Of interest to the Al Tamimi banking team were the responses on credit standards and the factors attributable to any change in credit standards. For both business and personal lending credit standards, in the majority, had not changed—although, there was some easing in standards for personal lending. In both cases, the quality of the bank’s asset portfolio was cited as being the paramount factor in any change in credit standards. Hence where the portfolio is poor, credit standards (interest rate margins, credit limits and collateralisation) should tighten and vice versa.</p>\r\n<p class=\"MsoNormal\">If an institution is doing well and views its portfolio as being in good shape a reasonable reaction may be to be more generous to customers against a positive economic backdrop. Credit and risk departments may be drawn into a state of comfort as they take heart in a stable economy and continuing demand. This is a common in any industry that is doing well as the good times make perceivably small problems (e.g. covenant oversights, minor payment delays) seem inconsequential. However, vigilance is a guiding principle for the defenders of any bank’s asset quality.</p>\r\n<p class=\"MsoNormal\">One of the many tools in maintaining vigilance is to check the wellbeing of a portfolio though regular audits of a loan book. Undertaking a legal audit at the beginning of each year is a recommended method of confirming whether actual practice accords with bank policy and meets best practice. Such a review looks at a sample of transactions and their finance documents to (i) ensure all documents contemplated by the term sheet were obtained and duly signed; (ii) confirm all conditions precedent and subsequent were fulfilled; (iii) test the mechanics of the covenants to make certain they are operating as intended; and (iv) identify any omissions or areas for improvement taking into account the bank’s usual procedures and the approach in the market. The benefits of receiving red flags at an early stage include better customer engagement and the maintenance of the lenders contractual rights under the finance documents.</p>\r\n<p class=\"MsoNormal\">At a broader level, the meta-results of these reviews are also are useful means of confirming if existing policies are correct, being applied properly or if standard documentation can be improved. For instance, choice of law and choice of jurisdiction within finance facilities is a perennial issue where the choice of a foreign law is common for large UAE-only transactions. The merit of the choice is always supportable but it requires a thoughtful decision for each transaction and policies that are not set with the right parameters can result in a lender’s interests not being fully realised. Further if standard documentation has not been reviewed for a period of time, it may not reflect the latest legislation or best practice. By way of example, all banks would have needed to review and update their mortgage products following the release of the Mortgage Loan Regulations in October 2013.</p>\r\n<p class=\"MsoNormal\">The overall benefit of a legal review of the loan portfolio is that it gives an institution an immediate insight into existing practices to confirm if all is well and, if not, to take corrective action. Armed with this knowledge banks can sleep well with not just hope, but comfort, that their loan portfolio is robust.</p>\r\n<p class=\"MsoNormal\">For more information on the above please contact your usual Al Tamimi advisor or any member of the Banking &amp; Finance Team.</p>'),
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(93424, 5075, 'pageSummary', 'One month into the New Year much good news has been released about the UAE banking sector.'),
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(93437, 5076, 'content', 'February 2015\r\n\r\n<hr />\r\n<p class=\"MsoNormal\">The borderlines between permitted tax planning/avoidance and unlawful tax evasion have occupied the centre stage across the globe with several modern economies emphasizing the need for corporate transparency and striking a fine balance between fiscal reforms agenda and the need to stimulate inclusive growth.</p>\r\n<p class=\"MsoNormal\">It is well known that several multi-national enterprises are paying very small amounts intaxes in comparison to their global revenues, by shifting and parking their profits in low tax countries, commonly called ‘tax havens’ or ‘tax friendly jurisdictions’. Several corporations are increasingly resorting to shifting their profits, parking their intellectual property and setting up intermediate holding companies (“<strong>IHC</strong>”) in offshore jurisdictions with low or nil taxes, exploiting the distinction between tax planning and tax evasion.</p>\r\n<p class=\"MsoNormal\"><strong>Tax planning with IHC</strong><strong> </strong></p>\r\nTax planning may be defined as an arrangement of affairs by a person to benefit fully and take advantage of all available tax concessions and rebates in accordance with statutory provisions, so that the tax burden is minimised without violating the letter of the law. Several courts in western jurisdictions have held that for tax planning to be legitimate it must be within the legal framework and colourable (sham) devices cannot be part of tax planning.\r\n<p class=\"Default\">A validly established holding structure adopted by the corporations has stood the test of time and the recent aggressive pursuit of revenue authorities across the globe. Establishing an IHC requires not only complex structuring involving corporate, regulatory, tax and corporate governance considerations and significant legal analysis, but also scrutiny of the political stability and investment climate of the jurisdiction of the IHC.</p>\r\n<p class=\"MsoNormal\"><strong>The United Arab Emirates: An economic hub for investment</strong></p>\r\n<p class=\"MsoNormal\">Evaluation of an IHC is done on several parameters including but not limited to political stability, investor-friendliness, financing constraints, business and operational requirements, tax considerations and exchange control and repatriation norms. As may be noted, though tax is a driving force for corporates choosing to establish IHCs, it can never be the sole factor in making the decision for establishing an IHC.</p>\r\n<p class=\"Default\">The United Arab Emirates (“<strong>UAE</strong>”) is not known to be a classical ‘tax haven’, but has been the preferred choice for establishing IHC for several corporates seeking to do business in Asia and Africa, for the reasons outlined below:</p>\r\n<p class=\"Default\"><em>i.   Political stability</em></p>\r\n<p class=\"MsoNormal\">The UAE is amongst the top 10 oil producers in the world, is a market-driven economy and is politically stable and sheltered, which ensures that the country has a robust advantage as a commercial hub for economic activities for corporates.</p>\r\n<p class=\"Default\"><em>ii.  Location advantages</em></p>\r\n<p class=\"Default\">The UAE can be said to be strategically located for conducting and exploring business opportunities in the emerging markets of the Middle East, Asia and Africa.</p>\r\n<p class=\"MsoNormal\">Further, infrastructure in the UAE is well developed with growth in property development in both residential and industrial spaces, which presents an added advantage for multinational corporates seeking to establish an IHC in the UAE.</p>\r\n<p class=\"Default\"><em>iii.  Investor-friendly climate</em></p>\r\n<p class=\"MsoNormal\">The traditional notion that corporations cannot be wholly owned by foreign nationals or a foreign corporation is no longer such a concern with numerous free zones established across different emirates in the UAE. There is no restriction on the nationality of free zone company directors and shareholders.</p>\r\n<p class=\"MsoNormal\">Entities in the UAE free zones can be registered as either new companies or as branches or representative offices of local or international companies. The requisite share capital for setting up companies depends on the chosen free zone, nature of the company’s business activity and the number of shareholders in the company, with few restrictions on use of share capital.</p>\r\n<p class=\"MsoNormal\">The UAE is also a contracting party to the International Centre for Settlement of Investment Disputes Convention (“<strong>ICSID</strong>”)and has signed several bilateral investment treaties with other countries which provide protection to foreign investors in several respects, including fair and equitable treatment and protection against imposition of any unreasonable, arbitrary or discriminatory measures.</p>\r\n<p class=\"Default\"><em>iv.  Nil tax regime </em></p>\r\n<p class=\"Default\">The UAE has a nil-rate tax regime for most corporations with the exception of oil, gas and petrochemical companies and branch offices of foreign banks, which are required to pay taxes.</p>\r\n<p class=\"Default\">The UAE has a broad network of Double Taxation Avoidance Agreements with over 50 countries, which provides investors with favourable treatment in respect of withholding taxes, tax credits and avoidance of double taxation in the residence country and source country.</p>\r\n<p class=\"Default\">With focus being drawn to offshore companies’ tax residency across the globe, establishing IHCs has become complicated. In such an environment, free zone companies established in the UAE with local regulatory authorities offer effective solutions as they draw less attention to themselves from tax authorities.</p>\r\n<p class=\"Default\"><em>v.   Ease of repatriation</em></p>\r\n<p class=\"Default\">There are no exchange control regulations in the UAE and hence this provides investors with the ability to easily park profits in UAE companies and to use them for financing their activities across the world with no regulatory approvals required to be sought for remittances outside the UAE.</p>\r\n<p class=\"MsoNormal\"><strong>Recent developments</strong></p>\r\n<p class=\"MsoNormal\">In today’s world the only constant is the assurance of continuing change. The developments in several modern tax systems across the globe signify that several countries have introduced the concept of “beneficial ownership” in their tax codes to curb the use of intermediate holding companies.</p>\r\nSome examples of countries adopting legislations to curb use of IHCs are the French General Tax Code which has included the term ‘beneficial owner’ in two provisions involving anti-abuse directions, EC directives, which have included a beneficial ownership condition in relation to interest, royalties and dividends and China, which has issued administrative circulars stating that a beneficial owner must have substantive operating activities and should not be an agent or a ‘conduit’. The courts in several jurisdictions like Canada, India and Indonesia are closely examining holding company structures to determine the beneficial ownership of income.\r\n\r\nThe question that faces every corporation looking to establish an IHC is how safe is it to establish an IHC in a given jurisdiction and it being accorded <em>bona</em> <em>fide</em> status despite any judicial scrutiny.\r\n\r\nThe key is to ensure that the IHC is not merely a ‘conduit’ or a pass-through entity. In the UAE, the free zones and the other competent authorities require all the details of the ultimate beneficial owner at the time of establishing a new entity or introduction of a new foreign shareholder in an existing company. Further, the UAE is not traditionally a tax haven (even though there are no taxes in the UAE) as it has not permanently denied the source country the right to tax the investor at the time of exit and therefore, there is usually a business case or sound commercial justification for the IHC to be located in the UAE rather than merely being a tax evasion device. The UAE has an established history of international trade, finance and business and is not dependant on any other country. The UAE is also not on the black list of the Organisation of Economic Co-operation and Development. Recently in January 2015, Implementing Regulations for Federal Law No. (4) of 2002 concerning anti-money laundering (as amended in 2014) have been published and the UAE has also opened its doors to countries like India, which has posted eight senior tax officers in Abu Dhabi clearly suggesting that it does not portray itself as a tax haven but is a commercial and economic hub for foreign investments.\r\n<p class=\"MsoNormal\"><strong>Concluding remarks </strong></p>\r\nThe UAE was ranked 14<sup>th</sup> on the 2013 A.T Kearney Global Foreign Direct Investment Confidence Index due to its investor friendly legislation and ease of access to emerging markets in the Middle East, Asia and Africa. In summary, it can be said that the UAE continues to be a preferred choice for setting up IHCs due its investor-friendly climate despite the tendency of the tax authorities around the world to seek to curb the use of IHCs.'),
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(93452, 5077, 'content', 'February 2015\r\n\r\n<hr />\r\n<p class=\"MsoNormal\">Most of these cases have arisen from real estate disputes in which the purchaser of an off-plan unit has sued the developer on the basis that the unit was not registered and accordingly the sale invalid. The court has repeatedly held that issues of property registration are not arbitral and any award upholding such a claim is to be annulled.</p>\r\n<p class=\"MsoNormal\">In a recent a case the Dubai Court of Cassation has underlined this principle by explaining that even if the award is justified on other grounds, if the award contains a determination on a matter of public policy, the entire award will be annulled and not just the decision concerning public policy.</p>\r\n<p class=\"MsoNormal\"><strong>Severability</strong></p>\r\n<p class=\"MsoNormal\">The Dubai Court of Cassation has in the past severed elements of an arbitral award which the court found the Tribunal did not have jurisdiction to make.</p>\r\n<p class=\"MsoNormal\">A recent example is Dubai Court of Cassation Property Appeal No.282-2012 (dated 3 February 2013). In this case, a purchaser sued a developer for the return of money paid under a sale and purchase agreement. The purchaser succeeded in a domestic DIAC arbitration, receiving an award for the return of his payments (AED 4 million), interest, and his legal costs of AED 110,000.</p>\r\n<p class=\"MsoNormal\">The developer challenged the award before the Dubai courts. Among a number of arguments raised, the developer claimed that the Tribunal did not have the power to award legal costs as no such power existed under Dubai law or the DIAC rules, and the parties had not agreed to confer such a power. The award was therefore to be annulled because the Tribunal had exceeded its jurisdiction.</p>\r\n<p class=\"MsoNormal\">The Court of Cassation agreed with the developer that the Tribunal had exceeded his jurisdiction when awarding legal costs. However the Court did not agree that this meant that entire award was to be annulled, but instead annulled the award regarding legal costs, and upheld the remainder.</p>\r\n<p class=\"MsoNormal\"><strong>Cassation Case 320 of 2014</strong></p>\r\n<p class=\"MsoNormal\">In the recent case of Dubai Court of Cassation Property Appeal No.320-20123 (dated 22 June 2013), the Court annulled the entire award rather than just that section in which the Tribunal had exceeded its jurisdiction be considering a matter of public policy.</p>\r\n<p class=\"MsoNormal\">In this case, a purchaser sued a developer for failing to handover and construct the unit in accordance with the completion date in the sale and purchase agreement. The basis of the claim was that the agreement was to be terminated and the purchaser’s money repaid because (1) the developer had failed to handover by the completion date and (2) the unit had not been registered. In the award the Tribunal accepted both of these arguments, and accordingly terminated the sale and purchase agreement and ordered the developer to repay the money paid by the purchaser.</p>\r\n<p class=\"MsoNormal\">The Court of First Instance ratified the arbitral award, as did the Court of Appeal. Before the Court of Cassation the developer argued that the award should be annulled because it dealt with an issue concerning registration under Article 3 of Dubai Law 13 of 2008, which is an issue of public policy not capable of being settled by the parties and, by extension, arbitration.</p>\r\n<p class=\"MsoNormal\">The Court of Cassation accepted this argument, holding that where a dispute includes issues that are not subject to conciliation (and by extensions arbitration) the overall dispute cannot be arbitrated. If the arbitrators accept jurisdiction over the non-arbitral issue and issue an award on it, the entire award is to be annulled.</p>\r\n<p class=\"MsoNormal\">In this case the Tribunal found that the purchaser had established a right to terminate under the terms of the agreement (as the unit had not been handed over in time) and also under Law 13 of 2008 for failure to register. Since the award was based on an issue that was matter of public policy falling outside the jurisdiction of the Tribunal, the entire award was to be annulled.</p>\r\n<p class=\"MsoNormal\"><strong>Comment</strong></p>\r\n<p class=\"MsoNormal\">Although the Court of Cassation in Property Appeal No.320-20123 could have considered severing the offending part of the award or allowing the award to be enforced on the basis that there were other non-public policy related grounds for the order made by the Tribunal, it is probably that it did not do so because under like the order for legal costs in Property Appeal No.282-2012, it could not easily sever the offending section. This is because the order for legal costs would have been one separate item found in the operative part of the award (i.e. the order conventionally found on the last page), whereas the issue of public policy would have been in the main body of the award dealing with the reasoning for the decision. This is why, although in both cases the Tribunal exceeded its jurisdiction, in one the Court agreed to sever the offending part, but in the other it was unable to do so.</p>\r\n<p class=\"MsoNormal\">It often happens that when bringing a claim a claimant will plead a number of different grounds for the relief sought. This case shows that care must be taken not to raise issues of public policy, as if dealt with by the Tribunal they will cause the award to be annulled even if the claim succeeds on other grounds unrelated to public policy. Tribunal’s themselves should simply refuse to consider any issue that it believes falls under public policy or which is otherwise outside of its jurisdiction.</p>'),
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(93471, 5078, 'content', 'February 2015\r\n\r\n<hr />\r\n<p class=\"MsoNormal\">For this reason, substantial amounts of time, money and effort are spent on the fit out of shops, restaurants and offices so that their appearance aligns with the image that the owners wish to portray, creating an environment that is conducive to making sales and conducting business.</p>\r\n<p class=\"MsoNormal\">In a construction contract the employer is at risk of being exposed (and potentially out of pocket) if a fit out is not completed on time, on budget and at the required quality.</p>\r\n<p class=\"MsoNormal\">Notwithstanding the importance of fit outs, fit out contracts are not always given the attention  they merit. Indeed, we have experience of high value and high profile fit out projects being procured on the basis of flimsy letters of intent and on the contractor’s standard terms of engagement, which are invariable biased in the contractor’s favour.</p>\r\n<p class=\"MsoNormal\">This can result in contracts under which the employer’s contractual entitlements may be ambiguous, limited or which fail to correspond with the rights that an employer may assume that it would have, especially given the significant sums of money concerned.</p>\r\n<p class=\"MsoNormal\">Against this background, the purpose of this article is to provide a snapshot of some key issues that employers should ensure are properly addressed in any fit out contract.</p>\r\n<p class=\"MsoNormal\"><strong>Procurement</strong></p>\r\n<p class=\"MsoNormal\">Selecting the contractor is the first step and it is usually prudent for employers to run a tender process to determine the most competitive offer for the project, taking into account issues of quality, price, and the experience of the contractor (i.e. it may be particularly valuable to have a  contractor familiar with the base build of the building where the fit out is taking place).</p>\r\n<p class=\"MsoNormal\">The tender process should be completed in good time so that the contractor has sufficient opportunity to mobilise and to place orders for materials, while careful consideration should be given to identifying the party who is responsible for obtaining the necessary consents and approvals (such as a the building permit) for the project.</p>\r\n<p class=\"MsoNormal\"><strong>Design and construction</strong></p>\r\n<p class=\"MsoNormal\">A further important issue is to decide the extent to which the contractor is required to undertake design.</p>\r\n<p class=\"MsoNormal\">As a general rule, specialist designers are likely to be engaged for intricate and complicated designs while design responsibility will probably reside with the contractor (who may have its own design team) if the design is relatively functional and straightforward. The contract period is usually quicker if the fit out is both designed and constructed by the contractor.</p>\r\n<p class=\"MsoNormal\">Regardless of the identity of the designer, it is important for the terms of engagement to include a design review process (to ensure that the design is satisfactory to the employer, including in terms of aesthetics and as against any design requirements for franchise stores) as well as a ‘fitness for purpose’ warranty.  All design obligations should be backstopped by the designer’s professional indemnity insurance.</p>\r\n<p class=\"MsoNormal\">Once the design is sufficiently advanced, construction works can begin. The contractor should be subject to appropriately robust construction obligations. In particular, it is important that the Contractor is required to construct the works in accordance with ‘best industry practice’ and with good quality materials.</p>\r\n<p class=\"MsoNormal\">It is important that the employer engages a project manager to supervise the works, to report back to the employer on progress and to certify payments.</p>\r\n<p class=\"MsoNormal\"><strong>Payment</strong></p>\r\n<p class=\"MsoNormal\">The scope and nature of fit out works is usually relatively certain and this lends itself to lump sum pricing structures which, in turn, increase certainty of price for the employer. That said, no contract price can ever be completly ‘fixed’ as, for example, it will inevitably increase if the employer instructs the contractor to perform additional works or changes the work to be done.</p>\r\n<p class=\"MsoNormal\">As with any other construction contract, it is important for the employer to have the express right to instruct variations (including decreasing or omitting part of the works) and the variation process must be subject to a clear pricing mechanism. For example, variations could be priced in accordance with analogous prices under the contract or in accordance with prevailing market rates (which can be determined through obtaining quotes from the market). However, it is important that the price should not be subject to any approval from contractor, otherwise the employer may find that the contractor can apply pressure by refusing to agree payment terms when the employer is keen to have the work completed.</p>\r\n<p class=\"MsoNormal\"><strong>Third parties</strong></p>\r\n<p class=\"MsoNormal\">Fit outs often take place within close proximately to operating neighbouring businesses (such as in malls). This means that contractors must perform the fit out works in such a way that they do not cause nuisance or inconvenience to third parties and in accordance with the requirements of the landlord/building owner (i.e. regarding the times when the contractor is permitted to perform the works, noise levels and access to and from the site).</p>\r\n<p class=\"MsoNormal\">On account of the interface with third parties, it is therefore vital that the contractor carries robust public liability insurance, which names the employer as a co-insured party.</p>\r\n<p class=\"MsoNormal\"><strong>Timely completion</strong></p>\r\n<p class=\"MsoNormal\">As the employer will almost certainly be prevented from trading (and therefore generating revenue) while the fit out works are being undertaken, fit out contracts must be subject to a definitive commencement date (which should not be subject to the date that approvals are obtained) and a fixed completion date.</p>\r\n<p class=\"MsoNormal\">If the works are not completed on time, consideration should be given as to whether delay damages should be levied against the contractor for each specified period of delay (i.e. a day or week). It is important that the rate of delay damages is sufficient to incentivise the contractor to complete the works as quickly as possible, while a further incentive can be added by providing that the employer may terminate the contract if any cap on delay damages (which is customarily 10% of the contract price) is exhausted.</p>\r\n<p class=\"MsoNormal\">In addition to imposing penalties for late completion, employers sometimes agree to pay bonuses if the works are completed before the contractual completion date, especially if it is commercially important for the works to be completed by a particular date (i.e. in time for a shopping festival).</p>\r\n<p class=\"MsoNormal\">In order to avoid any ambiguity, the contract should clearly set out the standards that the works are required to attain in order for them to be taken over.</p>\r\n<p class=\"MsoNormal\">Aesthetic appearance is important so, at the very least, the employer must be satisfied that the works have been performed in accordance with agreed designs and with the specified materials.  Additionally, the contractor must have obtained all necessary consents and approvals (i.e. from Civil Defence and the relevant municipality) for the works to be occupied and used for their intended purpose while the contractor must have a good reason for not remedying any outstanding defects or completing any outstanding works.</p>\r\n<p class=\"MsoNormal\"><strong>Defects</strong></p>\r\n<p class=\"MsoNormal\">Notwithstanding the taking over of the works, it is almost inevitable that defects will subsequently emerge. Defects are inconvenient and compromise the appearance of a fit out and therefore must be promptly remedied by the contractor when directed by the employer, bearing in mind the need to minimise disruption to the employer’s business.</p>\r\n<p class=\"MsoNormal\"><strong>Incentivising performance</strong></p>\r\n<p class=\"MsoNormal\">Dispute resolution is invariably expensive (and the cost can be disproportionate to the actual value of the fit out project) so it is prudent to include mechanisms in the contract to enable the employer to recover money from the contractor in the event of breach. This approach also serves to incentivise the contractor not to breach its obligations and to quickly make good any breaches that do occur.</p>\r\n<p class=\"MsoNormal\">In this regard, employers usually require the contractor to provide the employer with a performance security. The best option for the employer is to obtain an on-demand performance bond from a bank operating in the same jurisdiction in which the employer is located, which remains in force until the expiry of the defects liability period (provided that employer is satisfied all defects have in fact been remedied).</p>\r\n<p class=\"MsoNormal\">However, contractors sometimes resist providing performance bonds because of their cost (which may also lead to an increase in the contract price).</p>\r\n<p class=\"MsoNormal\">A pragmatic solution to this is for the contractor to furnish the employer with a signed but undated security cheque, which the employer may cash if it suffers loss on account of a breach by the contractor. To comfort the contractor, drafting can be inserted to clarify that employer will account to the contractor to the extent that the amount received by the employer from cashing the security cheque exceeds the loss suffered.</p>\r\n<p class=\"MsoNormal\">A further mechanism is for employers to seek to retain 10% from each payment and press for this amount to only be paid to the contractor with the final account (after all defects have been remedied).  If this is unacceptable to the contractor, a typical compromise is for half the retention to be paid upon takeover, with the balance falling due following the remedy of all defects.</p>\r\n<p class=\"MsoNormal\">A ‘back loaded’ payment structure which is paid in instalments against the completion of specified milestones can also be used to enhance the employer’s position, while employers should always look to include a clear right of set-off in the fit out contract.</p>\r\n<p class=\"MsoNormal\"><strong>Termination</strong></p>\r\n<p class=\"MsoNormal\">As with any other contract, a fit out contract should be subject to clear rights of termination, including in respect of breaches that remain outstanding following the expiry of a cure period; insolvency; as well as if a cap on delay damages is exhausted. Any applicable local law formalities regarding termination should be properly addressed in the drafting.</p>\r\n<p class=\"MsoNormal\"><strong>Concluding thoughts</strong></p>\r\n<p class=\"MsoNormal\">Fit out projects are subject to the same issues and risks that apply to any construction project and failure to properly address these concerns can seriously backfire on an employer.</p>\r\nFor this reason, we recommend that time is invested in engaging fit out contractors upon clearly drafted and robust ‘short form’ construction contracts that adequately protect the interests of the employer.'),
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(93490, 5079, 'content', 'February 2015\r\n\r\n<hr />\r\n<p class=\"MsoNormal\">Adequate corporate governance controls are particularly important in the banking sector, where the financial risks are relatively high, affecting not only the individual bank in question, but also the banking sector as a whole and the sustainability of the financial market in that country. The financial crisis of 2008 provided a clear, irrefutable example of the substantial costs of failing to have effective controls in place. Recognizing this, the Organization for Economic Co-operation and Development (OECD), the Basel Committee on Banking Supervision, and the Financial Stability Board each issued international standards and/or guiding principles for the enhancement of corporate governance controls, including those applicable to banks.</p>\r\n<p class=\"MsoNormal\">Most recently, the Central Bank of Jordan (“<strong>Central Bank</strong>”) issued the Corporate Governance Instructions for Banks no. 58 for the year 2014 (“<strong>Corporate Governance Instructions</strong>”) codifying and developing the principles provided under the Bank Directors’ Handbook of Corporate Governance and the Corporate Governance Code for Banks in Jordan issued in 2007, as they apply to conventional banks.</p>\r\n<p class=\"MsoNormal\">The Corporate Governance Instructions are based on the following principles:</p>\r\n\r\n<ul>\r\n 	<li>separation of the authorities of the Chairman of the Board and the General Manager (CEO);</li>\r\n 	<li>the independence of the Chairman of the Board of Directors;</li>\r\n 	<li>regulatory and administrative frameworks for the allocation of authorities and responsibilities, and for risk control;</li>\r\n 	<li>treatment of all stakeholders in a fair and transparent manner, including the importance of proper disclosure for the purposes of accountability;</li>\r\n 	<li>accountability of management to stakeholders;</li>\r\n 	<li>appropriateness test re the qualifications, competence, integrity, and reputation of the management of the bank.</li>\r\n</ul>\r\n<p class=\"MsoNormal\">The Corporate Governance Instructions aim to achieve the foregoing by introducing the following requirements:</p>\r\n<strong>I.       </strong><strong>Board Composition  </strong>\r\n<p class=\"MsoNormal\">Pursuant to the Corporate Governance Instructions, the Board of Directors shall be composed of not less than 11 Board members, unless the bank is owned by one shareholder. None of the Board members shall be an \"<em>executive director</em>\", in the sense that none of them shall be entitled to consideration for the day-to-day management of the bank.</p>\r\n<p class=\"MsoNormal\">Additionally, a minimum of 4 Board members shall be “<em>independent</em>”. In order to qualify as an independent director, the relevant Board member must satisfy, as a minimum, the following requirements (Article 6(d) of the Corporate Governance Instructions):</p>\r\n\r\n<ul>\r\n 	<li>not to have been an executive director of the Board within the last three years;</li>\r\n 	<li>not to have been an employee of the bank or any subsidiary thereof, within the last three years;</li>\r\n 	<li>not to be related, up to the second degree, to any other Board member or to a member of any board of any subsidiary of the bank, or to any “<em>qualifying shareholder</em>” of the bank (i.e. a person holding directly or indirectly 5% or more of the share capital of the bank);</li>\r\n 	<li>not to be related, up to the second degree, to any of the senior executive management of the bank, or any senior executive manager of any subsidiary of the bank;</li>\r\n 	<li>not to be a partner or employee of the bank’s external auditor, currently or within the last three years, and not to be related, to the first degree, to the person responsible for auditing the bank;</li>\r\n 	<li>not to be a “<em>qualifying shareholder</em>” (as defined above) of the bank, or a representative of or affiliated to a qualifying shareholder, or otherwise holding in concert with its affiliates a qualifying shareholding, or be a qualifying shareholder of a subsidiary of the bank or of the bank’s group;</li>\r\n 	<li>not to have occupied the position of Board member or member of a management committee of the bank or any of its subsidiaries for more than 8 consecutive years;</li>\r\n 	<li>for said member, nor any company in which he is a Board member or qualifying shareholder, to have been granted credit by the bank exceeding 5% of the subscribed share capital of the bank, nor have been a guarantor to a credit exceeding the same threshold; and</li>\r\n 	<li>to be of high financial or banking expertise and qualifications.</li>\r\n</ul>\r\n<p class=\"MsoNormal\">It should be noted that this marks the first time Jordanian laws and regulations have imposed a legal requirement to have \"<em>independent directors</em>\", as opposed to only best practices or guiding principles, and as such, is seen as a positive step towards ensuring that the banks\' Board of Directors are performing their duties to the best interest of the bank <em>itself</em>, with regard to all stakeholders.</p>\r\n<p class=\"MsoNormal\">In addition to the foregoing, all Board members are further required to satisfy an appropriateness test, in accordance with the respective bank\'s internal policies bearing in mind the minimum standards provided under Article 12 of the Corporate Governance Instructions (e.g. minimum 25 years of age, no less than 5 years of banking, financial or similar experience, not acting as a board member or other senior personnel at another bank, etc.).</p>\r\n<p class=\"MsoNormal\"> <strong>II.   </strong><strong>Responsibilities of the Board</strong></p>\r\n<p class=\"MsoNormal\">The Board of Directors of the bank is tasked with, <em>inter alia</em>, the supervision of the senior executive management of the bank, as well as with the adoption of appropriate policies and procedures for the purpose of supervising the performance of the bank as a whole, including in relation to its strategic objectives. For this purpose, the Board of Directors shall adopt KPIs to measure performance against targeted objectives, adopt strategic policies for the control and operation of risks, ensure the installation of an adequate Management Information System (MIS), etc.</p>\r\n<p class=\"MsoNormal\">The Board of Directors shall be held responsible for (i) the integrity of all banking operations (ii) the financial position of the bank, (iii) the extent of its compliance with the requirements of the Central Bank and other competent regulatory bodies, (iv) the extent to which it has regard to stakeholders’ interests, (v) the extent of its operation within the framework of applicable laws and its internal policies, and (vi) the continuous effective supervision of the activities of the bank, including its outsourced activities.</p>\r\n<strong>III.     </strong><strong>Board Committees</strong>\r\n<p class=\"MsoNormal\">The Corporate Governance Instructions provide for the establishment, composition, and duties of certain committees of the Board, including a Corporate Governance Committee, an Audit Committee, a Nomination and Rewards Committee, and a Risk Management Committee.<strong> </strong></p>\r\n<strong>IV.     </strong><strong>Senior Executive Management</strong>\r\n<p class=\"MsoNormal\">Similar to the requirements in relation to Board members, Senior Executive personnel are also required to satisfy an appropriateness test. This includes being persons of high integrity and credibility, holding certain educational qualifications, having not less than 5 (or depending on the position, 10) years of relevant experience, being free to act for the bank full-time, etc.</p>\r\n<p class=\"MsoNormal\">Additionally, in order to ensure that said personnel continue to perform in the manner which best serves the interests of the bank, their performance and remuneration are subject to review in accordance with the bank\'s internal policies, having regard to the minimum conditions provided under the Corporate Governance Instructions.</p>\r\n<p class=\"MsoNormal\">In relation to the General Manager (CEO), it is important to note that the same person may not act as both the General Manager and the Chairman of the Board of Directors. Further, the General Manager shall not be related, up to the fourth degree, to the Chairman of the Board, any Board member, nor any qualifying shareholder.</p>\r\n<p class=\"MsoNormal\"> <strong>V.     </strong><strong>Limiting the Influence of Qualifying Shareholders</strong><strong> </strong></p>\r\n<p class=\"MsoNormal\">To ensure more effective management of banks, the Corporate Governance Instructions provide for certain safeguards as against the influence of qualifying shareholders, by requiring that:</p>\r\n\r\n<ul>\r\n 	<li>no qualifying shareholder may occupy a senior executive position at that bank; and</li>\r\n 	<li>the senior executive management shall be subordinate to the Board of Directors only, and shall act within the framework of the delegation granted to it by said authority.<strong> </strong></li>\r\n</ul>\r\n<strong>VI.     </strong><strong>Disclosure, Confidentiality of Information and Conflicts of Interest</strong>\r\n<p class=\"MsoNormal\">The Corporate Governance Instructions build upon the conditions provided for under the Jordanian Banking Law, in relation to each of (i) disclosure of information to stakeholders, (ii) the requirement to maintain confidentiality of certain information, and (iii) the manner for dealing with conflicts of interest, including highlighting the minimum standards and courses of action to be undertaken in said context.</p>\r\n<strong>VII.     </strong><strong>Corporate Social Responsibility</strong>\r\n<p class=\"MsoNormal\">The Corporate Governance Instructions further require Boards of Directors of banks to ensure that their respective bank has adopted appropriate social initiatives in the Environment, Health and Safety, and Education fields, and to further the grant of financing to small and medium sized enterprises (“<strong>SMEs</strong>”) at appropriate prices and terms.</p>\r\n<p class=\"MsoNormal\">With regard to the above, it is important to note that banks are granted certain interim periods in which to comply with the Corporate Governance Instructions. Importantly, banks are required to amend their respective Corporate Governance Handbooks to account for the additional requirements provided pursuant to the Corporate Governance Instructions, and forward the same to the Central Bank for approval, within 120 days of the date the Instructions came into force.</p>\r\nThe shift towards a more regulated corporate regime is vital in today\'s modern world. Not only does history show us time and time again that it pays well to abide by corporate governance, but also the requirements and expectations of the global market dictate that in order for Jordanian banks to be able to compete on an international level, certain safeguards are necessary to ensure the continued prosperity and sustainable growth of the relevant banks and the Jordanian financial market as a whole.'),
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(93513, 5080, 'content', 'February 2015\r\n\r\n<hr />\r\n<p class=\"MsoNormal\">This was a highly anticipated and long awaited event as the regulations were expected to clarify certain issues necessary for the effective implementation of Law No. 116 of 2013 regarding the Promotion of Direct Investment (the “<strong>Direct Investment Law</strong>”). During the past year, we have received regular inquiries from numerous foreign clients seeking more information about the Direct Investment Law and whether Kuwait Direct Investment Promotion Authority (“<strong>KDIPA</strong>”), the relevant authority whose main function is to attract and encourage foreign and local direct investment within the State of Kuwait, was accepting investment license applications (the “<strong>Applications</strong>”).</p>\r\n<p class=\"MsoNormal\">The Executive Regulations are composed of 45 articles divided into nine chapters. What follows is a summary of its main provisions:</p>\r\n<p class=\"MsoNormal\"><strong>One-Stop Shop</strong></p>\r\n<p class=\"Default\">One of the most exciting aspects of the Direct Investment Law is the “One-Stop Shop”. The Direct Investment Law provides that KDIPA will have a “One-Stop Shop”  which is a specialized unit comprising of all relevant officials from the various relevant government departments in coordination with KDIPA which will assist with the establishment and licensing for such entities. The Executive Regulations expand on this to specify that in addition to the One Stop Shop unit being responsible for transactions relating to an investor’s establishment of an investment entity, the One Stop Shop unit will also be responsible for preparing introductory guidelines setting out relevant requirements and responding to any inquiries raised in connection with such guides. These guides will likely prove to be useful for investors and specialized companies who are currently unfamiliar with the new Applications.</p>\r\n<p class=\"Default\">In addition to the above, the Executive Regulations state that KDIPA will prepare a list of specialized companies, firms and offices that are prequalified and approved to submit and follow-up on Applications in the name and on behalf of an investor. Such measures appear to be taken in order to encourage more foreign investment by easing the process for foreign investors to submit investment license applications and establishment of investment entities. This should hopefully reduce ‘red tape’ for foreign investors and assist investors to navigate the procedures and requirements of the Direct Investment Law and its Executive Regulations.</p>\r\n<p class=\"MsoNormal\"><strong>Investment Entity</strong></p>\r\n<p class=\"MsoNormal\">Pursuant to Article 12 of the Direct Investment Law, an investment license may be sought for (i) all company forms, as outlined under Law No. 25 of 2012 (the “<strong>Companies Law</strong>”), (ii) branch offices of a foreign company licensed to operate within Kuwait, and/or (iii) a representative office whose main purpose is limited to the study of markets and production. Similarly, Article 8 of the Executive Regulations confirms Article 12 of the Direct Investment Law but clarifies that a foreign investor may obtain an investment license to own 100% of the capital of a company with limited liability, a joint stock company or single-person company.</p>\r\n<p class=\"Default\">In addition to the Executive Regulations, Director General Decision No. 35 of 2014 on Principles, Rules and Procedures for Licensing Branches and Representative Offices of Foreign Companies in the State of Kuwait was also issued to identify the requirements for obtaining an investment license from KDIPA to open a branch of a foreign company or a representative office in Kuwait.</p>\r\n<p class=\"MsoNormal\"><strong>General Submissions to KDIPA</strong></p>\r\n<p class=\"MsoNormal\">When the Direct Investment Law was issued, we noted that Article 13 indicated that its executive regulations would establish the principles, rules and procedures for the submission and registration of Applications to obtain an investment license as permitted by the Direct Investment Law.</p>\r\n<p class=\"MsoNormal\">Chapter IV of the Executive Regulations state that KDIPA will prepare application forms for various types of requests including (i) licensing of an investment entity; (ii) granting of incentives and exemptions; (iii) amendments to the name, address, purpose, capital or domicile of an investment entity; or (iv) amendments to the percentage of shareholders’ equity in an investment entity. Further, Article 10 of the Executive Regulations states that submission of Applications, papers and documents to KDIPA by an investor or his representative may be made by any means specified by KDIPA including in person, by registered mail or e-mail. Upon submission of an Application, KDIPA will provide a receipt evidencing acceptance of such Application and will record the Application in its internal application register.</p>\r\n<p class=\"Default\">Ministerial Decision No. 503 of 2014 (Regarding the Issuance of Stated Fees Schedule for Services Rendered by KDIPA), which was issued at the same time as the Executive Regulations, specifies KDIPA service fees ranging from KD 10 for a certificate of record in the investment register, KD 50 for issuance of an investment license, and KD 100 for submission of an Application.</p>\r\n<p class=\"MsoNormal\"><strong>License Applications</strong></p>\r\n<p class=\"MsoNormal\">Chapter V of the Executive Regulations further sets out the information and statements that must be contained in, or attached to the Application and the conditions to be met by the applicant, the appropriate methods of notice and notification and the fees for the issuance of the investment license as undertaken in Article 13 of the Direct Investment Law.</p>\r\n<p class=\"MsoNormal\">Pursuant to Article 14 of the Executive Regulations, the Application for establishment of a Kuwaiti company must be accompanied by an initial study which is to include certain information including but not limited to the type of proposed activity or project, the size of the investment and the economic and environmental impact of such investment.</p>\r\n<p class=\"MsoNormal\">In addition to the above, the Executive Regulations also identify the requirements for the licensing of a branch of a foreign company as well as a representative office.</p>\r\n<p class=\"MsoNormal\">The Direct Investment Law states that KDIPA must respond to an Application within 30 days of receipt of a complete Application. The Executive Regulations reiterate this in Article 17, which provides that KDIPA “shall decide on the merits of the Application within 30 days as of the fulfillment of all conditions, data, papers and documents required by KIDPA and the competent authorities.” Therefore, foreign investors with strict timelines should be able to obtain a response on whether or not establishment through the Direct Investment Law is possible within a relatively short amount of time subject to when required documents are submitted to KDIPA.</p>\r\n<p class=\"MsoNormal\">The Executive Regulations provide that the investor will be notified of KDIPA’s acceptance (in which case the establishment of the investment entity and issuance of the commercial license will proceed) or rejection of the Application. In the event an Application is rejected, KDIPA will provide written notice of such rejection including reasons for the same.</p>\r\n<p class=\"MsoNormal\">The investment entity must obtain the necessary approvals to commence preliminary procedures and activities (prior to full operation by the investment entity) within one year from the date of issuance of the license, unless KDIPA provides for a longer period. Furthermore, the investor is required to notify KDIPA of the actual date of commencement of operations within thirty days from such date.</p>\r\n<p class=\"MsoNormal\"><strong>Incentives and Exemptions </strong></p>\r\n<p class=\"MsoNormal\">Chapter VI of the Executive Regulations discusses the procedures for obtaining incentives and exemptions including, but not limited to, tax exemptions, customs exemptions and allotment of land and real estate. In addition, Chapter VI also details the procedures for conversion of an investment entity.</p>\r\n<p class=\"MsoNormal\"><strong>Grievance Procedures</strong></p>\r\n<p class=\"MsoNormal\">The Executive Regulations also include an important feature in Chapter VII - a grievance procedure which permits stakeholders to submit grievances relating to decisions issued by KDIPA. This grievance procedure provides investors with an opportunity to attend a hearing before a committee formed by the Board of Directors of KDIPA to discuss such grievance. The grievance committee’s deliberations shall be confidential, passed by majority and issued within thirty days from the date of its registration.</p>\r\n<p class=\"MsoNormal\"><strong>Supervisory Officers</strong></p>\r\n<p class=\"MsoNormal\">Chapter VIII of the Executive Regulations reveals that the Minister of Commerce and Industry will appoint certain employees to act as judicial officers in order to monitor whether investment entities are complying with the Direct Investment Law, the Executive Regulations, any implementing decisions or instructions issued by KDIPA. The role of these judicial officers is important as it will allow KDIPA to ensure that any licenses, incentives or exemptions issued are not being misused.</p>\r\n<p class=\"MsoNormal\"><strong>Negative List</strong></p>\r\n<p class=\"MsoNormal\">The first question that is commonly raised by potential foreign investors is the list of sectors which are excluded from direct investment within the scope of the Direct Investment Law (the “<strong>Negative List</strong>”). Ministerial Resolution No. 75 of 2015 (Specifying a List of the Direct Investments which are not subject to the Provisions of Law 116 of 2013) was issued on 26 January 2015 and published in the Official Gazette – Issue No.1211 dated 01 February 2015. Prior to the issuance of Resolution 75, KDIPA accepted Applications for investment licenses and the determination of whether a company was eligible to obtain an investment license was made by KDIPA on a case by case basis upon submission of an Application.</p>\r\n<p class=\"MsoNormal\">Article 1 of Resolution 75 now sets out the Negative List which includes ten different sectors which are not eligible for an investment license including any companies in the crude oil or natural gas extraction sector.</p>\r\n<p class=\"MsoNormal\"><strong>Conclusion</strong></p>\r\n<p class=\"MsoNormal\">The Executive Regulations greatly impproves how the Direct Investment Law works. We are hopeful that the Direct Investment Law will prove effective in attracting direct investment, whether foreign or local, to the Kuwaiti market in order to to meet the objectives of Kuwait’s 2035 Plan “to transform Kuwait into a world class financial and commercial centre, with the private sector leading economic activities, fostering competitiveness, increasing productivity, supported by viable public institutions, while maintaining the deep rooted values and national identity, towards achieving balanced economic and human development, supported by adequate infrastructure, legal framework, and enabling business environment.”<a href=\"#_ftn1\">[1]</a> Although the Executive Regulations were recently issued, we are aware that several applications have already been submitted to KDIPA and we anticipate numerous more applications will be submitted based on the number of inquiries we receive from our clients on a daily basis. If you have any further questions about the Direct Investment Law, please feel free to contact our Kuwait office.</p>\r\n\r\n<div>\r\n\r\n&nbsp;\r\n\r\n<hr size=\"1\" />\r\n\r\n<div>\r\n<p class=\"MsoFootnoteText\"><a href=\"#_ftnref\">[1]</a> KDIPA: Why Kuwait (http://www.kfib.com.kw/LivingInKuwait.aspx); 2035 Vision of His Highness the Amir of Kuwait, Sheikh Sabah Al Ahmad (http://www.da.gov.kw/eng/festival/vision_his_highness.php).</p>\r\n\r\n</div>\r\n</div>\r\n<div>\r\n<div>\r\n<div class=\"msocomtxt\">\r\n<p class=\"MsoCommentText\"></p>\r\n\r\n</div>\r\n</div>\r\n</div>'),
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(93531, 5080, '_yoast_wpseo_metadesc', 'On 14 December 2014 Kuwait issued the Executive Regulations of Law No. 116 of 2013 regarding the Promotion of Direct Investment in the State of Kuwait (the “Executive Regulations”).'),
(93532, 5081, 'content', 'February 2015\r\n\r\n<hr />\r\n<p class=\"MsoNormal\">It is an established principle of UAE Courts of Cassation that the termination of any contract means that the primary obligation (i.e. the obligation to execute the contract) also terminates and consequently any other obligations set out  in the said contract, including the Liquidated Damages clause (the ”LD”) and/or the penalty clause, shall terminate  and cannot be applied anymore. Accordingly, the legal basis for claiming compensation, if any, will be based on tortous liability and not contractual liability.</p>\r\n<p class=\"MsoNormal\">In Abu Dhabi Court of Cassation Commercial Appeal 790 of 2013 (dated 22 October 2014), the Abu Dhabi Court of Cassation developed this established principle further, as it held that termination does not always prevent the court from applying a liquidated damages clause or a penalty clause. The Cassation Court highlighted that as long as the liquidated damages clause or penalty clause is an independent clause which the parties have agreed will survive termination, it will be effective after the termination of the contract.</p>\r\n<p class=\"MsoNormal\">Al Tamimi &amp; Company successfully represented the claimant in this case before the Abu Dhabi Court of Cassation.</p>\r\n<p class=\"MsoNormal\"><strong>The facts of the case</strong></p>\r\n<p class=\"MsoNormal\">The claimant entered into a development agreement with the defendant, whereby the claimant agreed to grant rights to the defendant to enable the latter to develop a plot of land by constructing a tower and thereafter to use, enjoy and deal with the tower and pay the premium in accordance with the terms of the contract.</p>\r\n<p class=\"MsoNormal\">The defendant paid instalments amounting to 50% of the premium but failed to pay the remaining instalments.</p>\r\n<p class=\"MsoNormal\">After terminating the defendant on notice, the claimant filed a case before the Abu Dhabi Court of First Instance seeking (i) approval of its right to terminate the contract (ii) compensation amounting to AED 64,048,522 representing its loss of profit sustained due to the defendant’s failure to execute the contract.</p>\r\n<p class=\"MsoNormal\"><strong>The Abu Dhabi Courts’ findings</strong></p>\r\n<p class=\"MsoNormal\">The First Instance Court issued a judgment approving the claimant’s termination of the contract and awarding compensation of AED 31,285,656 (as per the evaluation of the court appointed experts).</p>\r\n<p class=\"MsoNormal\">Al Tamimi &amp; Co was appointed to represent the claimant before the Court of Appeal. On appeal the claimant argued that the contract includes a liquidated damages clause which stipulates that in case of termination of the contract due to the defendant’s breach, the claimant will be entitled to have all the due instalments up to the date of termination. Therefore, the claimant requested from the Appeal Court an order for compensation amounting to AED 55,972,800 instead of AED 31,285,656.</p>\r\n<p class=\"MsoNormal\">The Court of Appeal rejected this argument and highlighted that the court was not allowed to apply liquidated damages clauses after the termination of a contract.</p>\r\n<p class=\"MsoNormal\">The claimant filed an appeal to the Court of Cassation. The claimant argued that the Court of Appeal  had failed to notice that the parties had agreed in the contract that the liquidated damages clause would stand and be effective after termination, and that it did not simply apply during the execution of the contract. Accordingly, the judicial principle that the Appeal Court relied on did not apply.</p>\r\n<p class=\"MsoNormal\">The Court of Cassation accepted this argument by the claimant, holding that:</p>\r\n\r\n<ul>\r\n 	<li>Although there  is a judicial principle which holds that the termination of any contract means that the contract and all its clauses (including the LD or penalty clause) terminates, this is only applicable if the LD clause or penalty clause represents a penalty for any failure to perform the contractual mutual obligations during the execution of the contract.</li>\r\n 	<li>However, if the LD clause or penalty clause provides that it will survive and be effective after termination of the contract as a penalty for said termination, rather than being a penalty that is due upon any failure on performing the mutual contractual obligations during the execution of the contract, then such a clause is to be considered as a separate and independent agreement even though it is stipulated in the terminated contract.</li>\r\n 	<li>Therefore, the judicial principle that the Appeal Court referred to and relied on is not applicable in the subject case and accordingly the LD clause or the penalty clause is to be applied.</li>\r\n</ul>\r\n<p class=\"MsoNormal\"><strong>The importance of the judgment</strong></p>\r\n<p class=\"MsoNormal\">The judgment is important for a number of reasons.</p>\r\n<p class=\"MsoNormal\">On a practical level, it firmly clarifies, for the first time in UAE, that LD clauses and penalty clauses are classified into two types according to the text of the clause.</p>\r\n<p class=\"MsoNormal\">The first type are those that are to be applied when one party has failed to perform a contractual obligation during the execution of the contract. Such a clause falls down upon the termination of the contract and cannot be applied anymore as it is considered as a secondary obligation that follows the primary obligation (i.e. the execution of the contract).</p>\r\n<p class=\"MsoNormal\">An example of this first type of clause is the LD clause set out in the 1999 FIDIC Red book at clause 8.7<a href=\"#_ftn1\">[1]</a>. This provides that:</p>\r\n<p class=\"MsoNormal\"><em>“If the Contractor fails to comply with Sub-Clause 8.2 [Time for Completion], the Contractor shall subject to notice under Sub-Clause 2.5 [Employer’s Claims] pay delay damages to the Employer for this default. These delay damages shall be the sum stated in the Contract Data.\"</em></p>\r\n<p class=\"MsoNormal\">The abovementioned LD clause constitutes a penalty on the contractor in case the latter breaches its contractual obligation to complete the project on the agreed date and the aforementioned penalty is effective during the execution of the contract. Accordingly, if the employer terminated the contract, this LD clause (clause 8.7) will not be valid anymore and cannot be applied as it falls down after the primary obligation of the contractor (i.e. to execute the contract) ceases upon the termination of the contract.</p>\r\n<p class=\"MsoNormal\">The second type of LD clause or penalty clause are those that consist of an independent agreement between the parties regarding the due compensation or penalty that will be due after the termination of the contract. Accordingly, in this type of clause the LD clause or the penalty clause represents the due compensation as a penalty for terminating the contract and not a measure that will be applied during the execution of the contract in case a breach of a contractual obligation.</p>\r\n<p class=\"MsoNormal\">Before this Cassation judgment, the UAE Courts would not apply LD clauses and penalty clauses after the termination of the contract and were awarding compensation, if any, based on tort liability, which means that the claimant had to prove the actual damages sustained. Accordingly the compensation awarded was equivalent to the value of the damages suffered.</p>\r\n<p class=\"MsoNormal\">After this judgment, the Court has clarified that a claimant can request that the other party pay the amount of the LD clause or the penalty clause, if any, after terminating the contract, if the clause can be shown to be an independent agreement granting damages in the even the contract is terminated.</p>\r\n\r\n<div>\r\n<div>\r\n<p class=\"MsoNormal\"><em> </em></p>\r\n\r\n</div>\r\n</div>'),
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(93557, 5082, 'content', 'February 2015\r\n\r\n<hr />\r\n<p class=\"MsoNormal\">The Court recently allowed GCC companies to conduct economic activities in the state of Qatar, in the areas of industry, agriculture, animal resources, fisheries and contracting, without the need to establish a Qatari company with a Qatari shareholder.</p>\r\n<p class=\"MsoNormal\"><strong>The Case at First Instance</strong></p>\r\n<p class=\"MsoNormal\">In 2010, the Claimant (a construction company) filed a civil case before the Court of First Instance in Qatar, seeking the termination of the contract and compensation in relation to a construction agreement. The Defendant (the contractor) submitted to the Court a counter claim seeking the remainder of his outstanding money in relation to the same agreement in addition to compensation.<ins cite=\"mailto:ahmeda\" datetime=\"2015-02-04T09:31\"> </ins>The Court appointed an expert who approved the Defendant\'s dues towards the Claimant.</p>\r\n<p class=\"MsoNormal\">In 2012, the Court of First Instance took a decision to dismiss the original claim filed by the Claimant and in the counter claim, ordered the Claimant to pay the amount of USD $107,000 but refused to order any compensation to be paid.</p>\r\n<p class=\"MsoNormal\"><strong>Ruling of the Court of Appeal</strong></p>\r\n<p class=\"MsoNormal\">In 2012, the Claimant and the Defendant brought the decision of the Court of First Instance before the Court of Appeal. In a judgment handed down in 2012, the Court of Appeal upheld the finding of the Court of First Instance but in addition awarded the Defendant a further compensation amount of USD $20,000 as damages for the delay caused by the Claimant’s non-payment.</p>\r\n<p class=\"MsoNormal\"><strong>Judgment of the Court of Cassation</strong></p>\r\n<p class=\"MsoNormal\">In 2013, the Claimant lodged a further challenge with the Court of Cassation, seeking to overturn the judgment and based its argument inter alia on the following ground:</p>\r\n<p class=\"MsoNormal\">The Defendant is a non-Qatari company and hence does not have the right to conduct any economic activities in Qatar.  Consequently, the construction contract between the Defendant and the Claimant is null and void as it was entered into in violation of Law No. (13) of the year 2000, which prevents foreign investors from conducting contracting activities in Qatar without forming a Qatari company with a Qatari shareholder who holds at least 51% of the capital of the company.</p>\r\n<p class=\"MsoNormal\">The Court of Cassation rejected all grounds of the Claimant’s appeal and reasoned as follows:</p>\r\n<p class=\"MsoNormal\">Article 3 of Law No. (6) of the year 1983 relating to the executive measures for the Unified Economic Treaty between the countries of the Cooperation Council for the Arab States of the Gulf effective from 1/3/1983 provides that:</p>\r\n<p class=\"MsoNormal\">\"<em>it is permitted to the nationals of the countries of the Cooperation Council for the Arab States of the Gulf - either the juridical persons or the natural persons – to perform economic activity in Qatar in industrial, agricultural, fishing, animal wealth and contracting sectors provided that in order for the nationals of the council for the Arab States of Gulf to conduct business in any of the pre-mentioned sectors, they have to share their business with Qatari nationals with not less than 25% quota in the business. This sharing shall continue to a period not less than 5 years starting from the date of enforcement of this law</em>.” The explanatory memorandum of the law provides that \" <em>in enforcing the resolution of the committee of financial and economic cooperation issued on June 1982 in Riyadh, the principle of the freedom of practicing the economic activity in industrial, agricultural, fishing, animal wealth and contracting sectors shall be started provided that each country member in the Cooperation Council to stipulate the partnership of its nationals in a percentage not exceeding 25% for a period of five years. After that period, practicing these activities shall be free from any restrictions. The justification of this rule is to grant the nationals of the other countries of the GCC the national treatment granted to its own nationals</em>.”</p>\r\n<p class=\"MsoNormal\">The Court of Cassation explained the above by stating that the restriction on GCC citizens to conduct these aforesaid activities in Qatar is limited to five years only.  After the five years have elapsed, these activities can be practised freely by nationals of the GCC States without any further restrictions.  The judgment confirmed that the aim of such a provision is to protect the commercial activity of the State from any losses sustained as a result of foreign competition. As such, the business shall be released from this restriction after this period.</p>\r\n<p class=\"MsoNormal\">Accordingly, and with reference to the principle prevailing before this Court of Cassation, the provisions of the specific law shall prevail and apply over the provisions of the general law.  Moreover, the later general law does not impliedly supersede the previous specific law but the specific law remains applicable to accomplish the purpose for which it was issued. This constitutes an exception to the new general law unless the new law governs the discrepancies between the two laws.</p>\r\n<p class=\"MsoNormal\">The Court went on to say the provisions of the specific Law No. (6) of the year 1983 shall prevail over the provision of the general Law No. (13) of the year 2000 regarding foreign investment in Qatar in case of discrepancy. As a result, the Court concluded that the Defendant, which is a Kuwaiti company, is permitted to practise the contracting activity in Qatar without a Qatari partner.</p>\r\n<p class=\"MsoNormal\"><strong>Conclusion</strong></p>\r\nThis judgment is considered a practical application of the provisions of Law No. (6) of the year 1983 which ratifies the economic treaty between the GCC States pursuant to the articles of incorporation of the Cooperation Council (which calls for stronger ties and cooperation between the States of the GCC). The principle of treating other GCC nationals as nationals in Qatar will promote a stronger cooperation between juridical and natural persons especially in relation to incorporation of companies and all economic activities and investments.'),
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(96615, 5247, 'content_description', 'The Minister of Labour introduced some important changes to the UAE labour regulations by means of three decrees issued on 27 September 2015. \r\n'),
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(96617, 5247, 'pageSummary', 'The Minister of Labour introduced some important changes to the UAE labour regulations by means of three decrees issued on 27 September 2015.'),
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(96626, 5248, 'content', 'October 2015\r\n\r\n<hr />\r\n\r\nTo recap, the importation of medical devices and pharmaceuticals into any of the emirates of the UAE is controlled by the Ministry. As we discussed in our Part I article, in order to import pharmaceuticals or medical devices into the UAE, the importing company must be an individual or entity established in the UAE and licensed to import medical products into the UAE. With regard to an individual, only UAE nationals may apply in their individual capacity to be a registered importer of pharmaceuticals and medical devices. While in the past only companies wholly owned by UAE nationals could apply for a licence to import medical products, currently companies owned by both a UAE shareholder and a foreign shareholder may also apply for such a licence. Companies with 100% foreign ownership cannot yet apply for a medical product importation licence. Therefore, for companies wishing to import pharmaceuticals or medical devices into the UAE, there are two options: 1) incorporate a UAE entity in which they are a shareholder jointly with a UAE national, and undertake the licensing process with the Ministry or 2) engage a distributor or agent which is already licensed through the Ministry. Our Part I article further discusses these options.\r\n\r\nIn this article, we will look at the registration of medical devices and pharmaceutical products, in order to permit their importation into and sale within the UAE.\r\n\r\n<strong>Registration of Medical Devices and Pharmaceuticals</strong>\r\n\r\nUnder federal law, no medical device, medicine or pharmaceutical preparation may be put into circulation except after registration of the product with the Ministry. Thus, even if a company is licensed to import medical products, it will not be permitted to import a medical device or pharmaceutical unless that specific product is registered with the Ministry. There are certain exemptions from this requirement, which will be discussed in this article.\r\n\r\nIn order to register a medical device or pharmaceutical with the Ministry, an application for medical device or new drug application, as appropriate, must be submitted to the Ministry for review and approval. The application must be made by the manufacturer from the country of origin (the market authorisation holder in case of pharmaceutical products) jointly with the local authorised representative. The local authorised representative must be explicitly designated by the foreign manufacturer to act in the UAE, on behalf of the manufacturer, with regard to the manufacturer’s legal obligations and responsibilities.\r\n\r\nThe local authorised representative may be the licensed distributor of the product or a separate authorised representative. If the distributor is to act as the local authorised representative as well, the distributor must show evidence of its ability to effectively fulfil the regulatory responsibilities required by the Ministry. The local authorised representative is entirely responsible for the product and the post-market plan for handling complaints or recall. Further, the local authorised representative is responsible for fully complying with the requirements of the Ministry after placing the product on the market.\r\n\r\nThe application to be submitted to the Ministry must contain information about the pharmaceutical or device as well as the details of the manufacturer, local authorised representative, and local distributor of the product. A medical device will be classified as Class I, II, III, or IV, depending on its intended use; the required documentation will vary depending on the classification of the device. However, all applications must include a legalised free sale certificate or letters of regulatory approval, clearance to manufacture, sell, import and export the product, from the competent authority in the export country. The Ministry will accept accreditation of conformity assessment bodies from the European Union, Australia, Canada, the United States of America, Japan and Singapore, and will also consider any approval obtained for a product from other competent authorities.\r\n\r\nFurther, the applicant must submit provisions for an audit plan, details of the manufacturing site, a general post-marketing surveillance plan, as well as details concerning the product’s intended use, indications, precautions, instructions for use, safety and effectiveness data, and labelling. Once submitted, the application will be evaluated and the Ministry may request additional data or samples of the product.\r\n\r\n<strong>Importation of Unregistered Pharmaceuticals</strong>\r\n\r\nThere is an exception to the general position under Federal law, which provides specific approvals for the importation of an unregistered medical product. The intention behind the exception is to allow for emergency medicines or medicines to treat rare conditions, which may not be registered due to the cost-prohibitive nature of registering a rarely consumed medicine. This system allows providers and patients to access treatments despite the lack of registration.\r\n\r\nThe importation of an unregistered medical product must be performed in conjunction with a hospital or clinic local purchase order and a justification letter from a medical consultant.  The letter should include the clinical reasons for using an unregistered medicine instead of a registered alternative.  Even so, the importation of unregistered medicines is still permitted only by a licensed UAE medical store. In order to obtain Ministry approval for the importation of an unregistered medicine, as a minimum, the following documents are required:\r\n<ul>\r\n 	<li>Ministry licence of the importer</li>\r\n 	<li>Valid trade licence</li>\r\n 	<li>Local purchase order from the hospital or clinic</li>\r\n 	<li>Declaration letter from the hospital or clinic</li>\r\n 	<li>Justification letter from the medical consultant.</li>\r\n</ul>\r\nIf the consignment exceeds the equivalent of a one-year supply for one patient, or if the total value for any single item exceeds $2,500, a ‘Certificate of Pharmaceutical Product’ must be provided before the consignment can be released. Additionally, the medicine should be registered with the competent drug regulatory authority in the country of origin. Further, the medicine may not contain a substance that is banned in the UAE and the product must be labelled in English, at a minimum.\r\n\r\nOnce in the UAE, unregistered medicines must be stored in a separate area within the medical store and clearly marked as unregistered medicines. Each medical store must keep a register of unregistered medicines to enable their recall if necessary. Hospitals and clinics must also keep a register of the unregistered medicines that they use and the patients who receive these medicines, to enable recall.\r\n\r\n<strong>Conclusion</strong>\r\n\r\nIn order for a company to import pharmaceuticals and medical devices into the UAE, a company must: 1) both, incorporate in the UAE and obtain a medical importation and distribution licence from the Ministry, or 2) engage a local agent or distributor, who is already registered with the Ministry, to import the pharmaceuticals and medical devices on their behalf.\r\n\r\nUnless the medical product has been specifically ordered by a hospital or clinic and approved as a permissible unregistered medicine by the Ministry, it also is necessary for the medical product itself to be registered with the Ministry. While registration of a pharmaceutical or medical device takes longer than the registration of a company, they can be done simultaneously. We are able to provide guidance on each element of bringing a pharmaceutical product or medical device to market in the UAE, from establishing a local entity and providing contract drafting and review, to registering the medical products themselves.'),
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(96643, 5249, 'content', 'October 2015\r\n\r\n<hr />\r\n\r\nAs all the Arab Gulf Cooperation Countries (“GCC”) are members of the WTO, the laws governing IP rights in the region have since been amended to become in tune with the TRIPS requirements. The promulgation of common laws regulating customs in the GCC, the Unified GCC Patent Regulation and the Unified GCC Patent Office were other steps forward towards unifying the IP practices in the GCC. Finally, the recent adoption of a GCC Common Trademarks Law, to which common implementing regulations are expected within a few months, is regarded as an impressive milestone in cooperation and harmonisation in the GCC.\r\n\r\nFollowing these unification developments, one would expect a degree of harmony in the practices of IP offices in the GCC region, or in the principles governing IP rights such as the ‘Well Known Marks’ concept, or ‘Confusing Similarity’ threshold. To the contrary, however, there is a great amount of variance in the practices of IP offices in the GCC region. It is not a secret that designs offices are not functioning in some countries, such as Qatar, while basic services such as trademark searches are not available in others, such as Kuwait. Nor is it unusual to receive conflicting decisions from GCC trademark offices as to whether a proposed mark is inherently capable of registration or whether a prior existing mark should bar it from being registered.\r\n\r\nEven on the practitioners’ side, many attorneys specifically stipulate that submission of trademark registration certificates in all or most the Arab states are evidence of ownership in one of the Arab countries. The reality is that a registration certificate in one GCC state will have no bearing on the decision on another state’s trademarks office or a judge in another state addressing an opposition matter.\r\n\r\nThe reality is that the level of capacity and expertise of IP offices vary drastically from one GCC office to another. Electronic filing for trademark prosecution was first rolled out in KSA and is now expected in the UAE. However, the systems are completely different from one another. The lack of coordination between the two administrations has lead to the implementation of very different software solutions and the modules to be rolled out for registration. Further, patent examination by the GCC Patent Office has been carried out through contracts with external, foreign patent offices that are different from the offices with whom the UAE Patents Office contracts. This creates vast variances in results of opinions and procedures.\r\n\r\n&nbsp;\r\n\r\nThe myth is that most brand owners deal with the Middle East as one region, and do set their expectations under the assumption that a degree of harmony exists between the countries of this region. In fact, company budgets are planned in the Middle East based on feedback of the business units, pressure from distributors, or to counter IP infringements. Yet, the reality is that there is no certainty as to IP registration and to IP enforcement in the region and each jurisdiction has to be addressed separately.\r\n\r\nThe reality is that, from a business standpoint, it is reasonable to expect that complete harmony, at least at the registration level, exists in the GCC states. As four out of the six GCC states are very small markets, it becomes a burden to plan for separate IP protections processes for each, individual market. Brand owners cannot afford to draw up a strategy for the smaller markets and therefore the activity of registration and enforcement is substantially lower in those jurisdictions.\r\n\r\nTime lines for the prosecution of IP rights in each GCC state are worlds apart. If a local or regional business was to launch in the region, as it is usually the case that brands or products intend to cover the GCC region as a whole, it would be a challenge in itself to clear the product, let alone register it. The clearance can range from one working day to ‘N/A’, depending on the country. On the other hand, the registration process can range from six months to 30 months, depending on the country. If anything, the harmony and cooperation between IP offices is a necessity for the local entrepreneurs more so than to global IP right holders.\r\n\r\nThe region lacks cohesiveness and cooperation in the field of IP and the prosecution and enforcement of IP rights. Unfortunately, the common area of cooperation and harmonisation seems to be in the area of increasing official costs for IP registration. The GCC contains some of the highest official fees in the world for IP prosecution, with other states in the region eager to follow the same ‘success’ in charging high fees. Further, it costs more money to register in the UAE or in KSA that it would to cover most of Europe through the Community Trade Mark system.\r\n\r\nThe reality is that the purported harmonisation in legislation in the GCC does not achieve business advantages for IP right holders or entrepreneurs. What is needed is cooperation and the sharing of experiences in the areas of registration and enforcement in order to achieve advancement in IP protections and overcome many of the existing challenges in the IP arena.'),
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(96661, 5249, '_yoast_wpseo_metadesc', 'The global harmonisation of Intellectual Property (“IP”) laws dictated by TRIPS Agreement of 1995, to align the national legislation of the World Trade Organization (“WTO”) member states to a common standard, was the first step in harmonisation of legislation in the Arab region.'),
(96662, 5250, 'content', 'October 2015\r\n\r\n<hr />\r\n\r\nThe Property Law retains many existing core principles of existing Abu Dhabi real property law, such as the requirement for all dealings in property to be registered, and confirms much of the procedural market practice, for example, the information required in respect of mortgage registration.\r\n\r\nHowever, its scope has been expanded to many aspects which were previously either unclear or unaddressed. The Property Law now tackles many issues which had previously been of concern to property financiers and mortgagees within the Abu Dhabi market, particularly in the areas of off plan financing and mortgage enforcement.\r\n\r\nThis article provides a brief overview of the Property Law relevant to property financiers.\r\n\r\n<strong>Financing Of Off Plan Units</strong>\r\n\r\nPrior to the Property Law, there was no clear legislation to safeguard property financiers lending on off plan sales in Abu Dhabi. As a consequence, whenever financing the purchase of off plan property, lenders had to accept the credit risk of the property developer in addition to that of the end buyer. Lenders were dependent on the developers maintaining an accurate interim registry to register the real estate rights in the property, without the involvement of an independent third party or supervisory authority. Further, lenders were also reliant on the contractual agreements by the developers to register the off plan property upon completion, leaving the lenders in a position where they were contractual mortgagees but without the benefit of rights in rem over the financed property pending registration of their mortgage.  Another source of concern was the limited statutory safeguards for property financiers against the delay, non-completion or defects of the property.\r\n\r\nThe Property Law introduces stringent supervision over property developers, including various requirements to be complied with by a property developer before consent is granted by the Department of Municipal Affairs (“Department”), the regulatory and supervisory authority over property developers, for a property developer to be licensed and for a particular project to be approved.\r\n\r\nThe law introduces the requirement for the maintenance of an escrow account prior to approval being given for a property developer to commence a project and make off plan sales.  Escrow accounts are to be operated by a bank or a financial institution that has been approved by the Department. Therefore banks / financial institutions intending to act as escrow agents may need to enter into agreement with the Department, confirming the terms of their appointment.\r\n\r\nThere are limitations on circumstances in which withdrawals by the property developer may be made from the escrow account, including the condition that the developer must have first met a 20% milestone in the development project. In case of failure by the developer to complete a project, the escrow account bank is obligated to safeguard the depositors and ensure the successful completion of the project within a specified period (including, if necessary, the appointment of another developer), failing which property financier and end buyers are granted priority (after the deduction of the account trustee’s expenses) to the funds in the escrow account. A notable development that further strengthens the position of financiers of off plan units is the establishment of the Initial Real Estate Register. This register shall record all dispositions over units sold off plan, aimed to cover the construction period. The Property Law confirms that dispositions over off plan units shall not be binding on any of the parties involved or be valid with respect to third parties unless they are registered in the Initial Real Estate Register in accordance with the Property Law. All such disposals related to real estate units sold off the plan which have been made before the enforcement of the provisions of the Property Law shall be entered into the Initial Real Estate Register within six (6) months of the date of its commencement, which period may be extended by Department.\r\n\r\nThe purchaser of a real estate right may also mortgage his contractual right on the real estate unit, sold off plan, in order to pay the price of the real estate unit, provided that the real estate unit is registered in the Initial Real Estate Register and that the mortgagee shall pay the loan amount directly to the escrow account.\r\n\r\nThe Property Law has also imposed an obligation on the developer to inform the lender/mortgagee in the event of a default by the purchaser/mortgagor under the sale and purchase agreement, so that remedial actions may be taken by the lender/mortgagee to avoid termination of the sale and purchase agreement by the developer due to the purchaser’s/mortgagor’s default.\r\n\r\nUnder the previous regime, developers had a contractual right to impose fees for registering a mortgage or transfer over property, the cost of which can be prohibitive to the debtor. The Property Law has abolished the right of developers to collect fees other than administrative expenses paid to third parties (subject to a maximum set by the Department).\r\n\r\nIt is encouraging to note that the developer is now obliged to transfer the real estate units sold off plan to the purchasers registered in the Initial Real Estate Register to the Real Estate Register, provided that the purchasers shall have paid the full purchase price of their units to the developer (or as per agreement) and in accordance with the procedures issued by the Department. Previously, this was not an automatic right, but something to be negotiated with developers.\r\n\r\nIt is also pertinent to note that the Property Law makes it a material breach by a developer not to link purchase price payments to construction progress. Such a material breach allows the  purchaser of the off plan unit to terminate the purchase contract between it and the developer. Consequently, it is preferable for a financier to link the drawdown of a facility to construction milestones, which makes linking of payment to construction an important factor in determining the amount of each drawdown by the debtor.\r\n\r\nMany of the above aspects were previously determined through contractual arrangements or cooperation agreements between the banks and developers, leading to a large variance in approach. The Property Law now ascertains the accepted position, which should provide consistency to banks lending for off plan properties in the future.\r\n\r\n<strong>Development Finance</strong>\r\n\r\nFor financing the development of a project a developer is generally prohibited from mortgaging the project land or any real estate right related to it unless the mortgage is granted for the purpose of financing the building of the project and provided that (i) the loan amount is to paid directly into the escrow account; (ii) the developer informs the purchaser(s) about the mortgage through notification in the sale and purchase agreeement; and (iii) the developer and mortgagee undertake to release the mortgage over the sold unit(s) once fully paid.\r\n\r\n<strong>Mortgages</strong>\r\n\r\nThe Property Law sets out the requirements and formalities of a mortgage, which are mostly in line with the current practice.\r\n\r\nThe Property Law confirms that if the mortgagee is a bank, finance company or financial institution, it has to be duly licensed registered with the Central Bank of the United Arab Emirates (the “Central Bank”) to engage in real estate financing in Abu Dhabi. This implies that an entity that is not a bank or financial institution may also act as mortgagee (as the law only introduces the condition for a Central Bank licence for financial institutions, it does mandate that a mortgagee must be a licensed financial institution). This, however, would be a departure from usual practice and may not be accepted by the Department in reality.\r\n\r\nAny mortgage not registered in the Real Estate Register or Initial Real Estate Register, as the case may be, in accordance with the procedures prescribed by the Department, including any agreement to such effect, shall be void. In-kind surety mortgages (i.e. those granted by third party’s in support of the primary debtor’s obligations) are expressly permitted.\r\n\r\nThe priority of mortgages has been clarified (in order of the time and date registered), although interestingly, if multiple mortgage applications are received at the same time, the mortgage is to be assigned the same serial number and the relevant creditors are to rank equally amongst each other. This could prove useful where financiers agree to share security in respect of a project providing an alternative to the usual security agent/intercreditor arrangements.\r\n\r\nThe Property Law allows for the transfer or assignment of a mortgage to another creditor subject to the consent of the mortgagor. The transfer must be recorded in the original deed of title and registered. This diverges from the current practice that a mortgage cannot be transferred to another creditor, save by way of cancellation of the current mortgage and registration of the fresh mortgage, and it is anticipated to be welcomed by the banks.\r\n\r\nThe Property Law now clearly specifies that the mortgagor shall have the right to use and administer his mortgaged property and collect its yield and revenue until it is foreclosed and sold at a public auction upon default of paying the debt. However, as a safeguard to the mortgagee, the court can order that the revenue from the mortgaged property be frozen with effect from the date of filing of the action to enforce the mortgage if it finds that the mortgagor is delaying payment of his debt to the detriment of the mortgagee. In the case of early payment, the mortgagee may levy a fee or fine for early repayment, provided that such fee or fine is commensurate with the extra expenses actually incurred by the mortgagee due to early repayment, and subject to the limits specified in Central Bank regulations.\r\n\r\nFor musataha, usufruct and long term leases, the Property Law permits the creation of mortgage over such rights where they last for a period of 10 years or more, in case of a musataha or usufruct and for a period of 25 years or more, in case of long term lease. In connection with mortgage over musataha and usufruct rights, the Property Law confirms that: (a) such mortgage may be created without prior approval of the owner of the property; and (b) the owner of such property shall not be permitted to mortgage such rights again, without approval of the musataha or usufruct holder (although it is permissible to agree otherwise).\r\n\r\nThe Property Law generally confirms that a registered mortgage is an execution deed and can be directly executed/enforced before the execution court. A mortgagee must serve written notice to the mortgagor and the guarantor, if any, by registered mail with the acknowledgment of receipt informing them of the default and requiring payment within a period of no less than 30 days from the date of the notice. However the Property Law also provides that enforcement of a registered mortgage starts with an attachment application to be submitted to the competent summary court after giving notice to the debtor, without having to obtain a court judgment that the debtor owes the debt. It appears that the Property Law considers registered mortgages as execution deeds, but requires mortgagees to enforce such deeds through the summary court (and not the execution court). The Property Law further confirms that mortgage agreements with “self-help” provisions shall be valid, however, the condition of self-help shall be void and therefore not enforceable.\r\n\r\nWhile direct enforcements have been successfully obtained through Abu Dhabi courts previously, the legislative confirmation of this procedure should be well received by financial institutions, both for the resultant time and cost benefits.\r\n\r\n<strong>Final Thoughts:</strong>\r\n\r\nThe changes introduced by the Property Law provide a much clearer framework for both borrower and lender. Its introduction should likely encourage more lending in the real estate sector in Abu Dhabi accordingly. With the commencement date of the legislation fast approaching, lenders will need to review their documents and processes to ensure conformity with the new law so that they are ready to serve their customers.'),
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