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Arbitration
Canada
Court refuses to assume that kompetenz-kompetenz principle applies
29/10/2009 While emphasizing the importance of judicial deference in accordance with the principle of kompetenz-kompetenz on stay applications under the United Nations Commission on International Trade Law Model Law on International Commercial Arbitration, a Canadian court has found that the stay applicant must establish that the principle is part of an applicable law or agreement.
Court Finds That Set-Off Cannot Be Claimed at Enforcement Stage
30/07/2009 In refusing to stay an application for the recognition and enforcement of a foreign arbitral award, an Ontario court considered important issues relating to groups of companies, the applicability of the principle of equitable set-off and the public policy defence to enforcement under the laws of Canada. It found that a claim of equitable set-off could not be asserted at the enforcement stage.
Class Action and Arbitration Proceedings Tug-of-War in British Columbia
16/07/2009 The British Columbia Court of Appeal has overruled one of its earlier decisions, establishing that two previous Supreme Court of Canada decisions apply in British Columbia. The outcome of this reversal is that in British Columbia, an arbitration clause in a contract will not be rendered inoperative where an action challenging the contract is brought as an intended class proceeding.
Administration of Case to be Covered by 'Applicable Arbitration Procedure'
30/04/2009 In a recent case the Quebec Court of Appeal held that an arbitration institution did not usurp the jurisdiction of the arbitral panel by following its own institutional rules and determining that the dispute would be heard by a panel of three arbitrators. This decision appears to provide wider latitude to arbitration institutions to administer and apply their own procedural rules to arbitrations prior to the nomination of the arbitral panel.
Conflict between Arbitration and Class Proceedings Statutes in Ontario Explained
05/03/2009 Sections 7 and 8 of the Consumer Protection Act permit consumers to participate in a class action, even if the contract at issue contains an arbitration clause. In a recent case the defendant argued that these provisions did not apply retroactively. As a result, its clients that had signed contracts prior to the provisions coming into force were bound by the arbitration agreement and could not join the class action.
Denmark
Is a Cooperative Housing Association a 'Consumer' under the Arbitration Act?
15/10/2009 Cooperative housing associations and owners' associations are likely to be considered 'consumers' under Section 7(2) of the Arbitration Act. This means that they will not be bound by arbitration clauses in, for example, the General Conditions for Consultancy and Assistance or the General Conditions for Works and Supplies in the Construction Sector.
Is an Arbitration Clause Binding on a Bankruptcy Estate?
14/05/2009 Is a bankruptcy estate obliged to accept an arbitration clause between the insolvent company and another company? Due to market conditions, this issue has significantly increased in importance and is worth examining more closely. The question should be taken into consideration before depending on an arbitration clause when entering into, for example, an international supplier agreement or a debt restructuring agreement.
Kenya
Bill to Amend Arbitration Act Introduced in Parliament
22/10/2009 The attorney general has proposed the Arbitration (Amendment) Bill 2009 to amend the Arbitration Act 1995. The bill aims to facilitate the cost-effective and expeditious conduct of arbitration proceedings by dealing with matters relating to arbitration proceedings which are unclear in the existing legislation.
When Can an Arbitral Award be Appealed?
30/04/2009 Where the High Court refuses an application to set aside an arbitral award, a recent ruling held, according to the language of Section 39(3) of the Arbitration Act, that the respondent may appeal against such a decision only with the leave of the High Court or court of appeal and the consent of the parties involved. This language discourages parties from attempting to frustrate the arbitral process.
Arbitration Clauses Cannot Oust Jurisdiction of Kenyan Courts
26/02/2009 An arbitration agreement gives the parties the freedom to choose arbitrators in case of a dispute, the manner in which this appointment may be carried out, and the law to be applied in disputes. However, the High Court ruled that although parties are free to choose the law to apply in arbitration matters, such a choice cannot oust the jurisdiction of the local courts.
Spain
New Madrid Court of Arbitration Rules
19/03/2009 The Madrid Court of Arbitration has introduced substantial reforms to its arbitration rules. In 2003 the former Arbitration Law was repealed and a new law was passed. The United Nations Commission on International Trade Law Model Law was the primary inspiration for this new statute.
Ukraine
The Enigma of Ex Aequo et Bono
24/09/2009 Although provisions on ruling ex aequo et bono (ie, according to what is right and good) appear in almost all national and international arbitration law, they are rarely used in practice. However, two recent Ukrainian cases demonstrate that the concept broadens the tribunal's authority for the sake of fairness and practicability without undermining the fundamental principles of international arbitration.
Alternative Arbitration Clauses: Tribunal Blocks Abuse of Procedural Rights
27/08/2009 Alternative arbitration clauses are a frequent result of contractual parties failing to agree on a sole arbitration forum. This failure can lead to delays, parallel proceedings and various dilatory tactics; the problem is compounded when parties opt for the alternatives of an arbitral institution and a competent court of law. A recent decision in an arbitration seeks to reduce the potential for abuse of procedural rights.
Problems of Confidentiality in International Commercial Arbitration
04/06/2009 Confidentiality is considered one of the main advantages of international commercial arbitration. However, parties to arbitration may have different opinions on the extent of confidentiality and the persons bound by it, and in the context of the global economic downturn the threshold for a damaging breach of confidentiality may be relatively low.
How Final is a Final Award?
12/02/2009 Arbitration awards are usually considered final and binding and may not be appealed. However, in a small proportion of cases, an award may be set aside. In a surprising recent decision, the International Commercial Arbitration Court at the Ukrainian Chamber of Commerce and Industry cited Article 201(4) of the Civil Procedural Code to suspend a final award which had been challenged.
United Kingdom
Effect of Party's Insolvency in One EU Jurisdiction on Arbitral Proceedings in Another
15/10/2009 The Court of Appeal has examined the terms of the EU Insolvency Regulation in deciding whether a bankruptcy ruling by a Polish court annulled proceedings under the rules of the London Court of International Arbitration. When considering whether to initiate arbitration against a party on the verge of insolvency, practitioners should consider the likely effect of such an insolvency on the arbitration.
Excluding Appeal of Arbitral Awards on Point of Law
24/09/2009 In a recent Commercial Court case the judge determined that the court had jurisdiction to hear an application for permission to appeal a United Nations Commission on International Trade Law arbitral award on a point of law. In granting permission to launch the appeal, the judge examined the question of how parties to an arbitration agreement may exclude Section 69 of the Arbitration Act 1996.
Court of Appeal Upholds Refusal to Enforce ICC Award
20/08/2009 In Dallah Estate v Pakistan the Court of Appeal has confirmed a decision refusing enforcement of a French International Chamber of Commerce award on the grounds that Pakistan was not a party to the relevant arbitration agreement. The first instance decision was a rare example of a refusal by the English courts to enforce an award under the New York Convention.
Mediator Summoned to Give Evidence at Trial Regarding Mediation
30/07/2009 The Technology and Construction Court has ruled that without-prejudice privilege in mediation exists between the parties and is not a privilege of the mediator. The parties can choose to waive the privilege. The court will generally uphold confidentiality provisions in mediation agreements but, exceptionally, will order a mediator to give evidence about what took place in a mediation if it is in the interests of justice.
Recognition of Foreign Court Decision in Proceedings Outside Brussels Regulation
04/06/2009 Many commentators have applauded the reasoning behind a Commercial Court decision that did not recognize a Spanish court decision obtained in breach of an arbitration agreement which was valid under English law. However, others have questioned whether it would be upheld at EU level.
Court Claims Jurisdiction Despite Arbitration Clause
28/05/2009 The Court of Appeal recently upheld a Commercial Court decision rejecting a challenge to its jurisdiction by the defendants to an action for a declaration of non-liability under an alleged contract, notwithstanding the existence of an arbitration clause in that contract. The mere fact that the claim was the subject of an arbitration agreement did not deprive a court of its jurisdiction under the Brussels Regulation.
Argentina
ICC Court of Arbitration's Transparency Methodology for Arbitrator Challenge Process
04/06/2009 Division IV of the Federal Court of Appeals on Administrative Matters recently found there to be no basis presently for Argentina's request to set aside the refusal of the International Court of Arbitration of the International Chamber of Commerce (ICC) to admit a challenge against an arbitral tribunal chairman. This request was based on the argument that the ICC court had failed to express the grounds for its decision.
International Commercial Arbitration and Russian-Argentine Relations
26/03/2009 The Argentine Chamber of Commerce and the Chamber of Commerce and Industry of the Russian Federation have signed an agreement to make the resolution of disputes that may arise in bilateral commerce and other economic relations easier. This includes investments between individuals or legal entities domiciled in both countries.
Selection of Seat of Arbitration and Judicial Interference
15/01/2009 A recent case emphasizes the importance of the seat of arbitration, since its selection determines the procedural law and jurisdiction. Parties involved in arbitration proceedings should ensure they have a complete understanding of the jurisdiction, scope and value of arbitral agreements and the consequences of non-fulfilment of their obligations.
Ecuador
Principle of Equity Applied to Inter-American Development Bank Case
18/06/2009 In its first ruling dealing with international arbitration under the 2008 Constitution, the Constitutional Court has found that an ex aequo et bono arbitration (ie, an arbitration based on the principle of equity) agreed by the Ecuadorian government and the Inter-American Development Bank is permissible because it involves an agreement for external debt.
Iraq
Enforcement of Foreign Judgments and Arbitral Awards
25/06/2009 As the security situation in Iraq has improved, interest in international direct investment has increased. However, one consistent frustration maintained by many foreign parties is the difficulty in securing the enforcement of foreign judgments and arbitral awards. As federal Iraq is not a signatory to the 1958 New York Convention, many of the traditional enforcement and recognition mechanisms do not apply.
Malaysia
Stay of Proceedings: Case Studies
22/10/2009 This update summarizes three arbitration disputes involving construction contracts. In each case the court considered whether to grant a stay of proceedings pursuant to Section 10 of the Arbitration Act 2005. The third and most recent decision enforced the two earlier decisions and reiterated the Malaysian courts' position on staying proceedings pending a reference to arbitration.
Enforcing Foreign Arbitral Awards under the Foreign Arbitral Awards Convention Act
23/07/2009 A recent case dealt with the enforcement of foreign arbitral awards pursuant to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards Act 1985. The court held that since His Majesty the Yang di-Pertuan Agong had not declared, by way of an order in the Official Gazette, that the United Kingdom was a party to the New York Convention, the award could not be enforced.
High Court Considers Ambit of Savings Provision
16/07/2009 The High Court recently considered the ambit of the savings provision in Section 51 of the Arbitration Act 2005. The case involved arbitration proceedings that had been commenced in Malaysia after the act came into force and resulted in an award being handed down in October 2007. The court held that all proceedings subsequent to the handing-down of the arbitral award were governed by the act.
Court Refers Dispute to Arbitration Despite Exclusive Jurisdiction Clause
16/04/2009 A recent case involved an apparent conflict between an arbitration clause and an exclusive jursidiction clause in an insurance policy. The policy holder sought to refer to arbitration a disagreement regarding whether he had suffered any 'permanent disability' as required under the policy. The respondent relied on the exclusive jurisdiction clause to deny him that right.
High Court Rules on Enforceability of Arbitration Clause in Assigned Agreement
09/04/2009 The Kuala Lumpur High Court recently ruled on the enforceability of an arbitration clause which formed part of an agreement that had been assigned. When a dispute arose between the employer and the subcontractor, the subcontractor referred the matter to arbitration under the main contract. The employer challenged the arbitrator's jurisdiction on three grounds.
No Inherent Jurisdiction Upheld by Court of Appeal
29/01/2009 In a recent case the High Court of Malaysia dismissed the plaintiff’s application for an injunction pending a reference to arbitration in Singapore, on the basis that the High Court has no statutory or inherent jurisdiction to grant injunctive leave in matters where the seat of arbitration is outside Malaysia. The Court of Appeal has dismissed the appeal.
Portugal
Access to Justice and Financial Hardship
24/09/2009 The Porto Court of Appeal recently held that a party experiencing financial hardship - which arose after the parties had established an arbitration clause and was not intentionally caused - did not remain bound by the arbitration clause and could therefore file suit in court. If the case had been decided under the Insolvency and Corporate Rescue Code, the result would have been the same.
Suspension of Proceeding versus Suspension of Time Limit for Award
30/07/2009 The Supreme Court recently confirmed that the suspension of arbitral proceedings does not entail the suspension of the time limit for issuing an award. Moreover, only the parties may amend the limit. Although not generally favourable to arbitration, in some respects the decision demonstrates a more flexible view of deadlines for awards, the competence of arbitral tribunals and the validity of arbitral agreements.
Tribunals Must Consider Adversarial Principle and Access to Justice
14/05/2009 A recent Lisbon Court of Appeal decision demonstrates that entities which organize institutional arbitrations do not always incorporate basic principles of due process, and that the panels which they nominate or approve are not always familiar with these principles. The courts must protect arbitration from errors which affect the true spirit of alternative dispute resolution.
Lisbon Court of Appeal Rules on Interim Measures and Arbitral Jurisdiction
19/03/2009 A recent decision by the Lisbon Court of Appeal is consistent with precedents that grant the courts competence to rule on interim measures when the parties in question are bound by arbitration agreements. However, the court's reasoning is unnecessarily detrimental to the power of arbitral tribunals to grant relief through interim measures in certain circumstances.
Right to Plead Case versus Enforcement of Arbitration Agreement
05/02/2009 For the first time the Constitutional Court has upheld the constitutionality of the rule in Article 494(j) of the Code of Procedure that allows the dilatory exception of breach of the arbitration agreement. Such an objection may be enforceable against a party in a situation of supervening financial hardship that entitles it to legal aid.
Sweden
Clear Objection Needed to Avoid Preclusion of Challenge Right
11/06/2009 In a recent case the Svea Court of Appeal determined what was required in order to avoid preclusion of the right to challenge. The judgment stressed the importance of being explicit when making an objection which is intended to constitute grounds for challenge.
Contracting Away Compulsory Buy-Out Rights
22/01/2009 Although shareholders are unable to include in the articles of association compulsory buy-out rules which deviate from those set forth in the Companies Act, there is nothing to prevent shareholders from contractually agreeing to refrain from exercising the compulsory buy-out provisions. This issue was recently considered by an arbitral tribunal.
Switzerland
The Uneasy Relationship between Arbitration and Bankruptcy
30/07/2009 A recent Supreme Court decision on a dispute referred to arbitration regarding an agreement between telecommunications entities in Switzerland, Poland and Germany will revive the longstanding debate surrounding the uneasy relationship between arbitration and bankruptcy.
Recognition of a Foreign Award: When is an Award Binding?
14/05/2009 A recent Supreme Court decision has clearly established under Swiss arbitration law that an ex lege suspensive effect to extraordinary means of judicial review would constitute no bar to the recognition and enforcement of a foreign award in Switzerland. An express judicial decision granting or confirming the suspensive effect of the proceedings remains necessary to that effect.
Expert Determination and Arbitration: An Uneasy but Necessary Distinction
19/02/2009 The Swiss Supreme Court recently ruled that when an expert determination agreement coexists with an arbitration agreement, parties intending to submit to the expert legal disputes arising in the context of the expert determination must expressly state this intention in the expert determination agreement (or presumably in the terms of reference of the expert).
France
Dismissal of Setting-Aside Actions Must be Explicitly Reasoned
17/09/2009 Courts must state the reasons for their decisions to enforce or vacate arbitral awards. Article 455 of the Code of Civil Procedure obliges judges to set forth the grounds on which their decisions are based and leads to frequent decisions being made by the Supreme Court in matters previously resolved by state courts.
Paris Court of Appeal Decides on Application of ICC Rules
30/04/2009 The Paris Court of Appeal has held that the International Chamber of Commerce (ICC) Rules in force on the date an arbitration agreement is entered into apply unless the parties have agreed otherwise, and that the exclusion of liability clause contained in the 1998 version of the rules is unenforceable, as it is contrary to an essential duty owed by the ICC.
Court of Appeal Sets Aside ICC Award as Arbitrator Lacked Independence
23/04/2009 The Paris Court of Appeal has set aside an ICC award on the grounds that the arbitral tribunal had been irregularly constituted due to the chairman's lack of independence. It ruled that the duties of independence and impartiality are "the very essence of the arbitral function". The duty of independence is generally considered to relate to issues that may arise during the course of the arbitrator's relationship with one of the parties.
Arbitral Tribunal to Rule on Extension of Arbitration Agreement in a Group of Contracts
19/02/2009 In a recent decision the Supreme Court gave priority to an arbitral tribunal to rule on the extension of an arbitration agreement within a group of contracts on the grounds of two major principles of French arbitration law, namely the autonomy of the arbitration agreement and the kompetenz-kompetenz principle.
Germany
Supreme Court Permits Arbitration on Validity of Shareholder Resolutions
03/09/2009 The Supreme Court has held that disputes on the validity of shareholder resolutions in German limited liability companies are arbitrable, based on an arbitration clause in the company's articles of association. The court established a set of requirements for the validity of shareholder arbitration clauses that other jurisdictions may wish to take into account when considering their position on appropriate procedural safeguards.
Tribunal Questions Scope of Most-Favoured Nation Clauses
26/02/2009 In a recent case, the International Centre for the Settlement of Investment Disputes tribunal has refused to apply the 'most-favoured nation' clause of the German-Argentine bilateral investment treaty to its dispute settlement provision. It thereby contributed to the longstanding debate regarding the applicability of such clauses to dispute settlement provisions.
Turkey
Competent Authority to Decide on Validity of Arbitration Agreements
01/10/2009 Objections to arbitral proceedings on the basis of invalid arbitration agreements are common in international arbitration proceedings. In such cases it is necessary to determine which competent authority will decide on the validity of the arbitration agreement. In Turkey, the answer to this question depends on the law applicable to the dispute.
Legal Nature of Terms of Reference under Turkish Law
09/07/2009 There appears to be no common position on the issue of terms of reference: some argue that they constitute a new arbitration agreement, while others argue that the main arbitration agreement signed by the parties represents the intentions of the parties and cannot be amended by the terms of reference. The General Assembly of the Court of Appeals recently considered this issue.
Choice of Turkish Laws
05/03/2009 Decisions of the Turkish Court of Appeals have discussed whether the choice of Turkish law in an agreement including an arbitration clause to apply to disputes arising out of the agreement should be construed to refer only to the substantive law, or whether it should also cover Turkish procedural laws. However, its case law on the issue has recently changed.
United Arab Emirates
Application for Recusal of an Arbitrator: Must Proceedings Be Suspended?
19/02/2009 The Dubai International Arbitration Centre (DIAC) Rules are silent on the question of whether arbitral proceedings must be suspended while the DIAC decides on an application to recuse an arbitrator. If proceedings continue and an interlocutory decision or a final arbitral award is issued, the party runs the risk of such decision or award later being declared null and void in court.
Brazil
Effects of Arbitration Clauses on Non-signatories
29/10/2009 The enforcement of arbitration clauses in relation to non-signatories is an issue that draws the attention of practitioners and academics alike. While a range of material on the subject is available in books, law reviews and commentary, two precedents from the Brazilian courts can serve to gauge the law of the land on this interesting and potentially dispositive issue.
Pre-arbitration Injunctive Relief: Sao Paulo Court of Appeals Gets It Right
20/08/2009 Pursuant to Brazilian procedural rules, pre-arbitration court injunctions should be followed by an arbitration request before the competent arbitral institution. Failure to do so will result in the reversal of the injunctive relief and the dismissal of the entire court-initiated litigation. A recent case decided by the Sao Paulo Court of Appeals illustrates this point.
Courts Embrace Derivatives Arbitration
04/06/2009 The courts' recent deference to arbitration regarding a derivatives-related dispute between an investment bank and a major textile company is a clear indication that judges are embracing this alternative means of dispute resolution to solve complex financial controversies. It is hoped that this case will help to promote the use of arbitration clauses in financial agreements, paving the way for speedier and more specialized resolutions.
Confirmation of Awards Arising from Standardized Commodities Contracts
05/03/2009 The Superior Court of Justice has confirmed the majority of arbitral awards that have arisen from commodities-related disputes, with the court routinely avoiding discussing the merits of these decisions. However, in a recent decision the court seemingly departed from its traditional pro-arbitration approach, holding that the lack of a signature on an arbitration clause inserted in a purchase agreement violates the Arbitration Act.
Egypt
Minister of Justice's Decree Undermines Arbitration Process
23/07/2009 Ostensibly, the minister of justice has issued Decree 8310/2008 to regulate the deposition of arbitration awards with the courts. The deposition of an arbitration award is one of the steps required for enforcement under the Arbitration Law. However, for as yet undisclosed reasons, the minister also chose to introduce what are regarded by some as unconstitutional obstacles to the enforcement of arbitration awards.
Severability and Temporal Validity of Arbitration Agreements
26/03/2009 The Cairo Court of Appeal recently confirmed its restrictive approach in setting aside arbitral awards, particularly in the context of international commercial arbitration. The court confirmed and upheld the universal principle of severability of the arbitration agreement and ascertained the existence of a simple presumption that an arbitral award is presumed to have been rendered after due deliberations unless proven otherwise.
Finland
Institutional Arbitration: Annual Review
16/07/2009 Institutional arbitration in Finland is managed by the Arbitration Institute of the Central Chamber of Commerce. The institute releases annual statistics concerning institutional arbitration. This update reviews these statistics with regard to 2008 and the first two quarters of 2009.
Supreme Court: Arbitration Clause is Obstacle to Claiming Damages in Criminal Trial
12/02/2009 A recent ruling by the Supreme Court has made it clear that where a party to an agreement containing an arbitration clause or arbitration agreement wishes to maintain the option to have civil claims arising from the other party’s offence heard in connection with a criminal trial, this should be expressly stipulated in the arbitration clause.
Expedited Rules: An Underused Opportunity?
08/01/2009 Given the warm welcome that they received over four years ago, it is surprising that the Rules for Expedited Arbitration of the Arbitration Institute of the Finnish Central Chamber of Commerce are rarely used. This reluctance arguably stems not from an assessment of their benefits and pitfalls, but rather from a deep-rooted respect for the idea that parties should have sufficient opportunity to present their case.
India
Arbitration Clause Stands Apart from the Rest of the Contract
29/10/2009 An interesting question recently came up for adjudication before the Supreme Court regarding whether an arbitration agreement can survive for the purpose of resolving disputes that arise under or in connection with the contract even if the contract's performance has come to an end on account of termination due to breach.
In Default of Determination of Number, Tribunal to Consist of Sole Arbitrator
01/10/2009 While deciding on an application under Section 11 of the Arbitration and Conciliation Act 1996, the Supreme Court recently held that in default of determination of the number of arbitrators, Section 10(2) of the Arbitration and Conciliation Act provides that the tribunal is to consist of a sole arbitrator.
No Objections Can Be Raised after Settlement
16/07/2009 In a recent case the Delhi High Court had to answer the question of whether, after full and final settlement of a claim, a dispute regarding the claim amount under the terms of the arbitration clause still subsists between the parties. After accepting settlement for an insurance claim, the plaintiff later served notice on the insurer, alleging that the letter of acceptance had been obtained under duress and coercion.
No Particular Format for Arbitration Agreement According to Supreme Court
28/05/2009 In a recent case, after considering the parties' intention when executing an arbitration agreement, the Supreme Court held that the parties undoubtedly intended for any dispute that arose between them to be resolved by submitting it to arbitration. The court further held that the Arbitration and Conciliation Act prescribes no particular form for an arbitration agreement.
Supreme Court Imposes Time Limit on Objection to Selection of Arbitrator
30/04/2009 When recently deciding an application under Section 11(6) of the Arbitration and Conciliation Act 1996, the Supreme Court held that since the plaintiff had raised no objection to the creditability of the sole arbitrator initially appointed by the defendant, it could not sustain an application for an alternative appointment at a later stage on the grounds that the replacement sole arbitrator was not a former chief justice of India.
Division Bench Sets Aside Majority Award and Affirms Minority Award
16/04/2009 When deciding an appeal under Section 37 of the Arbitration and Conciliation Act 1996, the Delhi High Court set aside the award of the majority arbitrators and affirmed the views and award of the minority arbitrator. In his judgment the single judge observed that the majority had committed two jurisdictional errors.
Italy
New Law on Implementing EU Mediation Directive
23/07/2009 Amendments to the Code of Civil Procedure empower the government to issue statutory instruments on mediation and conciliation in civil and commercial matters and thereby implement the EU Mediation Directive. The directive deals only with mediation in cross-border disputes, but Italy is also implementing it with reference to purely national disputes.
Milan Chamber of Arbitration and the Mediterranean Project
26/02/2009 In recent years the Chamber of Arbitration of Milan has pursued an initiative known as the Mediterranean Project. It aims to develop its cooperation with other institutions throughout the Mediterranean region in order to offer efficient resolution of commercial disputes through institutional arbitration and mediation.
Milan Chamber of Arbitration Expands International and Online Mediation Services
29/01/2009 In recent months the Milan Chamber of Arbitration has responded to trends in international and online dispute resolution. A new international business mediation service offers flexible rules and venue choices, while a redesigned dispute resolution website allows business-to-business and business-to-consumer disputes to be resolved in a range of languages.
Lithuania
Recognition of Belarusian Arbitral Awards in Lithuania
03/09/2009 In Lithuania, Belarusian arbitral awards may be enforced only once they have been recognized and authorized for enforcement by the Lithuanian Court of Appeals. Belarusian arbitral awards cannot be reviewed on the merits; rather, they can be considered only on the basis of certain conditions that may constitute grounds for non-recognition.
Overview (August 2009)
20/08/2009 Including: Arbitration Institutions; National and International Arbitration Regulations; Arbitration Agreements; Non-arbitrable Disputes; Arbitrators; Proceedings; Expenses; Interim Measures; Challenges; Recognition and Enforcement; Other Forms of Alternative Dispute Resolution.
Non-arbitrability of Insolvency Issues: An Over-broad Interpretation?
14/05/2009 A Court of Appeals decision has confirmed that disputes arising from insolvency issues are not arbitrable. The recent decision overturns its previous interpretation, applies an unnecessarily restrictive interpretation of the non-arbitrability of disputes related to insolvency proceedings and contradicts the practice of many arbitration-friendly jurisdictions.
Austria
Supreme Court Takes Stance on Form Requirements for Arbitral Award Enforcements
16/04/2009 A US and a Cypriot party applied for the recognition and enforcement in Austria of an arbitral award made in the United Kingdom in proceedings conducted under the London Court of International Arbitration Rules. The Supreme Court had to deal with the question of whether all the formal requirements for the enforcement of the award had been fulfilled.
Netherlands
Supreme Court Sets Aside Arbitral Award for Violation of Mandate
20/08/2009 In a recent case the Supreme Court made clear that the requirement to mention all grounds for setting aside an arbitral award in the introductory writ of summons cannot be interpreted in such a rigorous way that it becomes impossible for a party further to substantiate - with new legal and factual arguments - grounds that had been invoked in a timely manner at the outset of the annulment proceedings.
Amsterdam Court of Appeal Recognizes Arbitral Awards Set Aside in Russia
14/05/2009 The Amsterdam Court of Appeal recently enforced four Russian arbitral awards under Article 5.1e of the New York Convention even though the Russian courts had set aside those awards. The decision illustrates that in the Netherlands, foreign state court decisions setting aside arbitral awards are not automatically recognized.
Dissenting Opinions and Non-compliance: Grounds for Setting Aside an Award?
19/03/2009 Despite the arbitrators' duty to explore each possible avenue to reach a collegial and unanimous decision, arbitral practice over the last few years has shown an increasing trend towards dissenting opinions. A recent Supreme Court decision emphasizes the heightened standard of care that the majority of arbitrators must observe if one of the other arbitrators decides to dissent.
Russia
Russia Rejects Energy Charter Treaty: A New Era for Investment Arbitration?
22/10/2009 Russia's termination of its provisional application of the Energy Charter Treaty - including the provisions on submitting investment disputes to international arbitration - raises further jurisdictional issues for the Yukos tribunal. It may also have a more long-term bearing on the utility of investment arbitrations against Russia in future.
Finance Disputes: Enforcement of Optional Arbitration Clauses Remains Uncertain
26/02/2009 Parties involved in a dispute over a finance-related contract should beware of relying on an optional arbitration clause, particularly one with a hint of ambiguity or defect, with a view to enforcement in Russia. The arbitrazh (ie, commercial) courts, not unknown for judicial chauvinism and an anti-arbitration stance, may deem such a clause invalid on a number of grounds.
USA
Waiver of Right to Arbitrate: Who Decides?
04/06/2009 The US courts often wrestle with the recurring question of who should determine certain threshold issues, such as whether a party waived its right to arbitrate a claim. In a recent case a New York federal court reaffirmed that courts, not arbitrators, have the authority to determine whether a litigant had waived the right to arbitration by adopting a position inconsistent with that right in that court.
Unintended Consequences of Proposed Amendments to Federal Arbitration Act
08/01/2009 Legislation is pending in Congress to amend the Federal Arbitration Act. While Congress’s intent is to protect certain individuals with inferior bargaining power from being coerced into arbitration, the proposed legislation could potentially undercut the desirability of arbitration as a preferred dispute resolution method between businesses.
Aviation
Belgium
New Penalty Regime for Misuse of Slots
08/04/2009 Amendments to the Air Navigation Act have introduced a new infringement regime related to the use of slots at Brussels National airport, implementing EU Regulation 793/2004. Three forms of abuse of the slot system are now punishable by detention and criminal fines, as well as a new system of administrative fines.
Brazil
Cut-Through Clauses in Aviation Reinsurance Contracts
29/07/2009 In 2007 the monopoly that the Brazilian Reinsurance Institute had held over Brazil's reinsurance market for nearly 70 years began to end. Legislation that had been expected for 10 years was finally ratified. Part of that legislation addressed cut-through clauses in reinsurance contracts, which are particularly relevant to aviation contracts given the extent to which risk is reinsured through international reinsurance markets.
New Electronic Title Searches Introduced
11/03/2009 A certidão is a printed extract from the records of the Brazilian Aeronautical Registry to determine the ownership and lien status of registered aircraft. For the past few years the time required to obtain certidões has been approximately two months and in some cases even longer. However, the National Civil Aviation Agency has recently greatly improved the issuance system.
Germany
Deadline for Emissions Monitoring Plan Submission Extended Again
19/08/2009 The Data Collection Ordinance 2020 has become effective. The Emissions Trading Authority has issued advice to aircraft operators on the new ordinance and its consequences. The ordinance forms the legal basis for the submission of emissions monitoring plans. Furthermore, the deadline for aircraft operators to submit their monitoring plans has been extended again.
ECJ to Rule on Pilot Retirement Age
15/07/2009 The Federal Labour Court recently asked the European Court of Justice to rule on whether the stipulation of a fixed retirement age of 60 for pilots as one of the terms of a collective employment agreement constitutes a violation of the EU Employment Directive.
Delayed Flights: Federal Court Rules on Passenger Compensation
27/05/2009 The Federal Court of Justice has ruled on the scope of application of the EU Denied Boarding Regulation regarding compensation to passengers in the event of a missed connecting flight. The decision distinguished between instances of denied boarding and cases where a passenger has arrived to check in for a flight after the gate has closed due to a previous delayed flight.
Carriers Granted Additional Time to Submit Emissions Monitoring Plan
01/04/2009 From 2012 aviation will be included in the EU Emissions Trading Scheme. Although this date may seem distant, carriers offering services to or within the European Union must act now. The German Emissions Trading Authority has requested that carriers involved submit documents detailing the procedures they plan to use to monitor emissions and gather tonne-kilometre data in August 2009.
Agency Publishes Report on Flight-Time Limitations for Cabin Crew
04/03/2009 The European Aviation Safety Agency has published a report entitled "The Scientific and Medical Evaluation of Flight-Time Limitations". Some stakeholders have reacted to the report with dismay: their criticism focuses on "a serious lack of substantive scientific and medical content" in the report and claims that the report "comes to conclusions which are oblivious to the evidence of decades of safe operation".
Commission Investigates Frankfurt-Hahn Airport and Ryanair Agreements
04/02/2009 The European Commission recently opened investigation proceedings concerning the granting of aid to Flughafen Frankfurt-Hahn GmbH and low-cost carrier Ryanair. On January 17 2009 the European Commission’s invitation to submit comments pursuant to Article 88(2) of the EC Treaty was published, and interested parties have been invited to submit their comments within one month of this date.
International
Liability for Damage Caused by Aircraft
05/08/2009 The International Civil Aviation Organization has adopted two new air law conventions that set out international compensation and liability rules for damage caused by aircraft to third parties. Each treaty makes operators liable for death, bodily injury and mental injury, as well as environmental and property damage. However, both conventions are a long way from coming into effect..
Italy
Slot Allocation at Coordinated Airports
30/09/2009 ENAC, the Italian Civil Aviation Authority, recently issued a circular on certain procedures and issues related to the allocation of slots at coordinated airports. In addition to clarifying the roles of Italy's coordinator and an airport's coordination committee, the circular sets out the consequences of failing to comply with a slot allocation.
Council of State Upholds Air Carriers' Challenge to Fuel Surcharges
06/05/2009 A recent Council of State decision on fuel surcharges promises significant changes to the terms on which airport management companies charge airlines for the use of utilities and services. It follows the principle of EU law that such surcharges may be imposed only in strict relation to the relevant costs.
Malta
Aviation Sector Prepares for Take-Off
08/04/2009 Emulating the success of its Shipping Register, Malta is committed to establishing itself as a leading jurisdiction for aircraft registration. Plans were recently announced to reform the local regulatory framework and develop the registration of aircraft into a niche sector, with the potential of spearheading the creation of a cluster of aviation services.
Canada
Liberalization of Foreign Ownership Rules
23/09/2009 Amendments to the Canada Transportation Act have provided the governor in council, effectively the federal Cabinet, with the flexibility to increase the foreign ownership limit on Canadian carriers from the existing level of 25% to a maximum level of 49%. It is suggested that the impetus for these amendments was specific recommendations made by the Competition Policy Review Panel in connection with the air transport sector.
Air Passenger Rights Legislation Proposed
10/06/2009 The protection of consumers and air passenger rights continue to be hotly debated in Canada. This update provides a summary of proposed federal legislation, which is contained in Bill C-310 - An Act to Provide Certain Rights to Air Passengers. If passed, the law would apply to air carriers that operate a domestic service or an international service, including international charters.
China
Registering Interests under the Cape Town Convention
10/06/2009 The Cape Town Convention is effective in China, making the International Registry an additional registry for registering various interests in aircraft equipment in China. The Civil Aviation Administration of China has identified the registrable interests and has announced the steps that it has taken to implement the new registration system.
Overview (May 2009)
27/05/2009 Industry Developments; Legal Developments; Outlook.
Cape Town Convention: CAAC Hints at Authorizing Entry Point
25/02/2009 Once the Cape Town Convention comes into force in China, the International Registry will become an additional registry for various interests in aircraft. The Civil Aviation Administration of China has been designated as an entry point to collect and transmit registration information. It is likely to adopt the authorizing entry point model, as applied in the United States.
Airlines Weigh Impact of Counter-crisis Measures
14/01/2009 A recent statement by the Civil Aviation Administration raises concerns for the aviation industry, particularly in its recommendation that Chinese airlines cancel orders for new aircraft or postpone their delivery. Although the measures are arguably not official rules, many stakeholders expect them to affect aircraft orders and lease agreements; they may also benefit the industry's long-term development.
France
Preliminary Report into Air France Crash Fuels Speculation
09/09/2009 Three months after the loss of Air France Flight AF447 and all 12 crew and 216 passengers, investigations continue into possible causes. The identification of the precise cause or causes of this accident is of interest not only to the families of victims, but also to an airline industry that wishes to improve safety. It will also be relevant to issues of liability and compensation.
Cour des Comptes Criticizes Aéroports de Paris
14/01/2009 In a recent report the Cour des Comptes (the administrative financial affairs watchdog) has heavily criticized Aéroports de Paris for the service that it provides to the public, including the information provided to passengers and the connections between Paris and the airport. It also found that tariff increases had not resulted in a significant or equivalent increase in the quality of service.
Russia
Change in Customs Duties for Imported Aircraft
30/09/2009 The government has passed an order amending the customs tariffs for aircraft imported into Russia. Customs duties for aircraft with between 50 and 300 seats remain at the previous level of 20%. However, a 0% customs duty was introduced for certain cargo aircraft.
CAA's New Requirements Affect Bermuda Registration
29/07/2009 A new policy regarding the acceptance of commercial aircraft for registration and certification in Bermuda affects cross-border leases into Russia. At the request of the Russian Civil Aviation Authority (CAA), commercial aircraft over 10 years old that are offered for registration and certification in Bermuda by a Russian airline must first be accepted by the CAA.
Confiscation of Leased Aircraft by Customs
20/05/2009 When a foreign-owned aircraft is leased by a Russian airline, it is imported under the temporary import customs regime, which allows for the deferment of import duties and taxes. However, violation of the regime may result in a fine of up to 200% of the aircraft's customs value and the confiscation of the aircraft, despite the fact that the importing airline is not the owner. A recent case illustrates the risk for lessors.
President Approves Establishment of Unified State Registry of Rights to Aircraft
01/04/2009 The new Law on State Registration of Rights to Aircraft and Related Transactions provides for the establishment of a unified registry of rights to aircraft. Among other things, it includes a procedure for registration, details of the documentation required and possible grounds for suspension or refusal.
Government Support for Core Aviation Companies
21/01/2009 The Committee on the Improvement of Sustainable Economic Development has approved a list of core Russian companies - including six airlines - which are of strategic national importance. The committee's working group will review the airlines and prepare plans for their rehabilitation, but inclusion on the list is not a guarantee of financial support.
Spain
New Aeronautical Inspection Regulations Introduced
26/08/2009 Aeronautical inspection regulations have recently been passed to implement Law 21/2003. These regulations have developed the concept of safety within the law, which no longer refers to extraordinary security controls, but rather implements audit structures to assess the suitability of the safety systems and procedures continuously. The regulations provide a framework for aeronautical inspection activities.
Ramp Inspections of Third-Country Aircraft Landing at Spanish Airports
10/06/2009 Royal Decree 714/2009 recently entered into force, transposing into law an EU directive regarding the criteria for the conduct of ramp inspections at EU airports. The decree applies to third-country aircraft landing at airports in Spain that are open to international air traffic.
Supreme Court Rules Liability Limitations Inapplicable
08/04/2009 The Supreme Court has confirmed the Madrid Court of Appeal's ruling on the inapplicability of liability limitations in air transportation under Articles 22 and 25 of the Warsaw Convention. The court held that the air carrier's employees had acted recklessly, as indications in the bill of lading and on package labels were ignored.
United Kingdom
Are Aircraft Leases Outside the Scope of the Unfair Contract Terms Act?
18/03/2009 A recent Commercial Court judgment has confirmed that aircraft leases will normally fall outside the provisions of the Unfair Contract Terms Act because they are deemed to be international supply contracts. If so, parties entering UK law aircraft leases have contractual freedom to exclude liability for non-fraudulent misrepresentation and the terms that they agree will not be tempered by the act's test of reasonableness.
Opportunity Knocks: Time to Buy an Airport?
04/03/2009 With consolidation or failure likely among airlines and regulatory initiatives requiring the disposal of attractive assets, potential acquirers in the airport sector must examine not only the opportunities available, but also the possible application of competition rules.
Long-Life Assets: Airlines in the Dark over BATA Agreement
18/02/2009 The agreement between Her Majesty's Revenue and Customs and the British Air Transport Association on the application of the long-life asset rules to jet aircraft has expired. An extension provides continued certainty of treatment for both airlines and lessors.
India
Airports Economic Regulatory Authority Given New Powers
30/09/2009 The government recently brought into force Chapter III (Powers and Functions of the Authority) and Chapter VI (Offences and Penalties) of the Airports Economic Regulatory Authority of India Act 2008. The chapters outline the authority's powers and functions and prescribe penalties in the event of non-compliance with its orders.
Airports Economic Regulatory Authority Established
29/07/2009 The Airports Economic Regulatory Authority of India Act 2008 authorized the establishment of an independent body to regulate tariffs and monitor the performance of airports. As a result, the Airports Economic Regulatory Authority was recently established. It is hoped that the new regulatory authority will help to create a level playing field and foster healthy competition.
Montreal Convention Incorporated into Law
29/04/2009 The Carriage by Air (Amendment) Act 2008 recently entered into force, thereby incorporating the provisions of the Montreal Convention 1999 into Indian law. The amendment act should help to avoid complex jurisdictional discrepancies when deciding matters relating to passenger or goods liability.
New Ground Handling Regime Postponed
18/02/2009 The commencement of the new ground handling regime has been postponed for six months. The extension circular was issued the day before the implementation date of the new policy and is understood to be the result of pressure from labour unions of existing ground handling companies, including airlines, which have provided these services in the past.
Israel
Agency Relationships between Carriers and Travel Agencies
28/10/2009 In a recent case the plaintiff had purchased tickets through a travel agency to fly with EL AL Israel Airlines. The price had been calculated in Israeli shekels according to the 'cash rate', rather than the lower 'transfers and cheques rate'. The plaintiff alleged that there was an agency and trust relationship between the travel agency and the carrier, and that thus the travel agency's actions should be attributed to EL AL.
Extra-contractual Exposure Due to Wrongful Denial
08/07/2009 In a recent case involving an aircraft crash the Haifa District Court ruled that the insurer, which failed to pay insurance benefits on time, may be obliged to compensate the insured for the damage suffered as a result of the delay. The ruling necessitates a review of declination procedures and requires insurers to consider, before declining coverage, whether the declination is well founded.
Court Considers Applicability of Warsaw Convention to Freight Forwarders
15/04/2009 The liability of an air carrier is provided for under the Warsaw Convention, as enacted into Israeli law. However, is the liability of a freight forwarder also governed by the Warsaw Convention? In a recent decision the Tel Aviv Magistrates' Court referred to the applicability of the two-year limitation period under the Warsaw Convention to a claim against a freight forwarder which had not issued an airway bill.
Multinational Accidents - Which Law Should Apply?
04/03/2009 Air accidents inevitably raise a number of complex issues, including the issue of jurisdiction. Where the Warsaw Convention applies, a framework for jurisdiction is specified; however, where it does not apply, jurisdictional issues may become more problematic. This issue has been addressed by Israeli courts in several aviation claims arising from accidents that have occurred in non-commercial circumstances.
Turkey
Montreal Convention Ratified
24/06/2009 Parliament recently passed an act which finally ratified the 1999 Montreal Convention for the Unification of Certain Rules for International Carriage by Air. While the convention applies only to international carriage as defined therein, the ratification also signals a change to the rules applicable to domestic carriage by air.
USA
Irrevocable Acceptance: A New Case Sheds Doubt on a Sure Thing
25/03/2009 Buyers of aircraft are typically required to sign an acceptance certificate at the time of delivery, which may state that the buyer irrevocably accepts the aircraft. A recent Eighth Circuit decision calls into question whether such language, considered in the context of the parties' performance under the agreement, may prevent a buyer from exercising its right to revoke acceptance pursuant to the Uniform Commercial Code.
Isle of Man
Registering and Owning Private and Corporate Aircraft
23/09/2009 The Isle of Man Aircraft Registry provides for the registration of private and corporate jets and twin turbine-engine helicopters. At present, it is the only dedicated corporate aircraft register in Europe. In order to register an aircraft with the Isle of Man Aircraft Registry, certain procedures must be followed.
Banking
Albania
Implementation of Convention Provides Greater Guarantees for Banks
28/08/2009 Parliament recently approved a law making Albania a party to the International Convention on Maritime Liens and Mortgages. The adoption of the convention will give Albanian banks and credit institutions greater guarantees for the recognition and enforcement of their security interests (ie, mortgages, hypotheques and charges) over seagoing vessels.
New Regulation on Electronic Payment Instruments
09/04/2009 The Supervisory Council of the Bank of Albania has approved a new regulation on electronic payment instruments. The regulation aims to improve the framework for the issue and use of electronic payment instruments, as part of the bank's implementation of a function to create and supervise the secure and efficient operation of Albania's payments system.
Bermuda
Freehold First and Second Mortgages Explained
28/08/2009 A first mortgage transfers the legal estate to the secured lender. The borrower has the right to occupy the home and to have it transferred back when the mortgage loan is repaid with interest. Second and subsequent mortgages transfer a home subject to the first mortgage. The first lender will already hold the legal estate in a borrower's home. Thus, second and subsequent secured lenders are entitled only to the equity of redemption.
China
China Pilots Renminbi Cross-Border Trade Settlement
23/10/2009 In an attempt to strengthen China's economic exchange with foreign countries, the government announced the launch of a renminbi cross-border trade settlement pilot programme, for which the People's Bank of China and ministerial authorities have issued implementing regulations. The scheme will affect background clearing between Chinese and foreign banks.
CBRC Tightens Regulation of Sub-debt Financing
09/10/2009 With Chinese banks' loan business growing rapidly - along with fears of inflation - the China Banking Regulatory Commission has released a consultative note on a draft circular on capital replenishment mechanisms. The draft circular indicates the government's intention to tighten capital adequacy ratio requirements for Chinese banks and to curtail bank lending.
China and Hong Kong Sign Currency Swap Agreement
22/05/2009 The People's Bank of China and the Hong Kong Monetary Authority have signed a currency swap agreement which enables short-term liquidity support to be provided to the mainland operations of Hong Kong banks and the Hong Kong operations of mainland banks, as necessary.
New Multi-currency Cross-Border Payment Arrangement
22/05/2009 The People's Bank of China and the Hong Kong Monetary Authority have announced a multi-currency cross-border payment arrangement between the mainland and Hong Kong. The arrangement covers cross-border payments and settlement in four currencies.
New Measures on Transfers of State-Owned Assets in Financial Enterprises
15/05/2009 Rules newly in force are likely to complicate the acquisition or disposal of interests in financial enterprises. Among other things, they confirm that transfers of state-owned interests in unlisted financial institutions are subject to a mandatory public auction or tender process, unless a special approval for transfer by private agreement is obtained from the State Council or the financial authorities.
Green Light for Chinese Banks to Finance Mergers and Acquisitions
23/01/2009 The China Banking Regulatory Commission has issued new M&A financing rules that allow Chinese commercial banks to make loans to fund the transaction price of M&A transactions. It is likely to adopt a cautious approach to supervising banks’ compliance with risk control and due diligence standards.
Czech Republic
Implementation of the EU Payment Services Directive
05/06/2009 The use of payment instruments in the European Union varies significantly from country to country, since each member state has tailored standards and practices according to its national legislative needs. The payments industry has actively sought to remedy this situation by adopting the EU Payment Services Directive, which is set to be implemented in the Czech Republic in Autumn 2009.
Enforcement of Securities: A Bank's Perspective
27/03/2009 If a bank's claim as creditor is not satisfied by a debtor, compensation can be obtained in one of three ways: through a court sale, through enforcement by a private executor or through a compulsory public auction. This update focuses on a bank's enforcement of receivables before the commencement of insolvency proceedings.
Recent Legislative Changes in Banking Sector
16/01/2009 This update summarizes some of the important legislative changes to affect the banking sector in 2008. Changes include an amendment to the Act on Banks to increase the insurance coverage of deposits and an amendment to the Consumer Protection Act to provide a more detailed specification of unfair, misleading and aggressive business practices.
France
Rescue Plan for Banks
24/04/2009 The level of systemic risk to the banking system and the economy brought about by the international financial crisis cannot be properly mitigated through existing prudential responsibility and guarantee mechanisms. This crisis has been the stimulus for a series of exceptional recovery measures.
Portugal
Banking Sector Faces New Disclosure of Information and Conduct Rules
03/07/2009 The Portuguese legislature has once again reacted to the problems in the financial sector, introducing changes to promote the disclosure of information about board-level remuneration in public-interest entities, including in the banking sector, and tasking the Bank of Portugal to supervise the credit institutions' lending to certain borrowers.
Bank of Portugal: New Price List Disclosure Obligations for Credit Institutions
08/05/2009 The Bank of Portugal has published details of a regulatory initiative that would impose greater duties on credit institutions to disclose the list of fees and interest rates that they levy on products and services. A notice and instruction set out details of the information required and the manner of its presentation.
Government and Bank of Portugal Address Credit Crisis
13/03/2009 The ongoing financial downturn has kept Portugal's legislature busy. Recent months have seen the creation of a special state guarantee scheme for Portuguese credit institutions, changes to the bank deposit guarantee scheme and new provisions on capital adequacy. In addition, the Bank of Portugal has intervened to appoint members to the board of the troubled Banco Privado Português.
Malta
New Rule on Publication of Credit Institutions’ Audited Financial Statements
06/02/2009 The Malta Financial Services Authority recently published its proposals to modernize Banking Rule BR/07. The new rule aims to achieve the policy objective set out in the European Commission’s Financial Services Action Plan of enhancing disclosure of credit institutions’ activities to allow investors to take informed decisions, and to foster market transparency and discipline as a complement to prudential supervision.
Netherlands
Regulator Imposes Administrative Fine on Postbank NV
17/04/2009 Pursuant to Section 4.23(1) of the Financial Supervision Act, a mortgage adviser must inform himself or herself of the consumer's financial position, knowledge, experience, goals and willingness to accept risks, and any advice must be based on this information. In a recent case the Authority for the Financial Markets ruled that Postbank NV had failed properly to inform itself of consumers' financial situations.
Sweden
Time Barring under the Code of Commerce
09/10/2009 Swedish banks generally provide customers with annual account statements of performed transactions. The Svea Court of Appeal recently considered whether such statements have the effect of triggering the one-year time bar period provided for in Chapter 18(9) of the Code of Commerce, meaning that claims for compensation in relation to unauthorized withdrawals must be made during this period.
State Commission Proposes Changes to Deposit Guarantee Scheme
26/06/2009 A state commission has published a report in which it proposes a number of changes to the deposit guarantee in order to enhance the protection of Swedish depositors and to improve financial stability. The commission's remit was to review the measures required to improve the efficiency of the regulatory framework and the supervision of institutions that accept deposits covered by the deposit guarantee scheme.
Banks Reclassify Financial Assets
13/03/2009 The Financial Supervisory Authority recently reported on its investigation into whether banks have taken advantage of amendments to two financial instruments. It found that five of the eight banks investigated used the new opportunities to assess certain financial assets at amortized cost instead of fair value in connection with the interim reports for the third quarter of 2008.
United Kingdom
Walker Review proposes extensive corporate governance changes for banks
14/08/2009 Sir David Walker was commissioned by HM Treasury to conduct a review of corporate governance in UK banks and other financial institutions. His consultation paper sets out the results of his review and seeks comments on 39 wide-ranging recommendations in relation to board composition and effectiveness, the governance of risk, remuneration and the role of institutional investors.
Turner Review Spells Out Change for Banking Regulation
24/04/2009 The long-awaited Turner Review, which sets out a blueprint for the future prudential regulation of banks and financial institutions in the United Kingdom, seeks to address the regulatory and supervisory shortcomings which have been exposed by the financial crisis. It promises to have a substantial impact on banks and their business models.
Banking Act: Assessing the Effects on Stakeholders and Counterparties
03/04/2009 The recent entry into force of parts of the Banking Act 2009 - and particularly the special resolution regime - has far-reaching implications for the sector. Unsecured creditors and contractual counterparties, shareholders and other securities holders, and companies in a group that includes a troubled bank, must all assess the likely impact of the act.
The Banking Act and the Special Resolution Regime
20/03/2009 Parts 1 to 4 (and some of Part 7) of the Banking Act 2009 have come into force, setting out the most substantial changes to UK banking law for decades. The most controversial aspect of the act is the special resolution regime, which consists of three stabilization options: a private sector transfer, a bridge bank transfer and temporary public ownership.
Hungary
Leading Banks Sign Retail Lending Code
16/10/2009 Hungary's main banks have signed a code of conduct on retail lending activities. Among other things, the instrument sets out rules on responsible lending activities and binds the signatories to principles of transparency, rule-based conduct and symmetry. However, a recent ruling supports the position of the one leading bank that has publicly refused to sign the code.
Act Restricts Unilateral Amendments by Banks
09/10/2009 As the credit crisis started to affect banks in Hungary, some began to exploit their right, established in their general terms, to amend certain elements of their agreements more frequently - a practice that prompted severe public criticism. Parliament has adopted a bill that restricts banks' rights unilaterally to amend or modify consumer loan agreements and allows customers to rescind such agreements without charge.
Comfort Letters Unenforceable, But May Give Rise to Damages
25/09/2009 The Arbitration Court attached to the Chamber of Commerce and Industry recently issued an ambiguous decision about the legal nature of comfort letters, which banks often use in the absence of more tangible securities. There are strong grounds to believe that soft comfort letters do not create enforceable obligations and may give rise to tortious liability only in exceptional cases.
New Law Criminalizes Usury: Are Banks and their Managers in the Firing Line?
31/07/2009 Given Hungary's party political divisions, Parliament's near-unanimous support for a law criminalizing usury is a significant demonstration of public concern. A debtor may declare a loan contract void if the total cost of credit is excessive. However, it remains unclear whether the law can be applied to managers of authorized financial institutions if the rate of interest on the institutions' loans is deemed excessive.
Parliament Passes Bill on Bank Account Switching
24/07/2009 Parliament has recently adopted a bill transposing the EU Directive on Payment Services. Among many other things, the comprehensive bill includes provisions on bank account switching. In the case of bank account contracts for an indefinite period or for a set period exceeding one year, the account holder may terminate the contract (and thereby close the account) without charge or cost.
Pledge Regulations on Moveable Assets Amended
13/02/2009 In order better to serve the needs of credit providers and clients in relation to car financing, a new law has been submitted to Parliament that aims to relax the administrative requirements on establishing pledge agreements over cars. Future plans include the abolition of the notarial deed requirement for all movable assets and the provision of free online access to the pledge registry.
Indonesia
Bank Indonesia Introduces Shariah-Based Intra-day Liquidity Facility
02/10/2009 Bank Indonesia has introduced an intra-day liquidity facility to ensure smoother payments for banks that operate on the basis of Islamic and shariah principles. It is hoped that the facility will help to prevent payment gridlocks in money transfers or securities transfers that could cause wider instability in Indonesia's financial system.
New Bank Indonesia Regulation Strengthens Shariah Banking Network
03/07/2009 The governor of Bank Indonesia recently issued the Regulation on the Conversion of a Conventional Bank to a Shariah Bank. The main effect of the regulation allows conventional banks to convert to shariah banks and community credit banks to convert to shariah community credit banks, but not vice versa.
Bank Indonesia Issues E-money Regulations
19/06/2009 In order to address developments in the use of electronic money as a payment instrument, Bank Indonesia has issued two comprehensive regulations on the subject. They apply not only to banking institutions, which are traditionally under the watch of Bank Indonesia, but also to other institutions that act as principals, issuers, acquirers, clearing entities or settlement agencies for payment card business.
New Requirement for Forex Purchases
20/03/2009 In keeping with its statutory duty to stabilize Indonesia's currency, the Bank of Indonesia has taken measures to control speculative rupiah transactions, capping purchases of foreign currency from a bank at $100,000 a month. An individual or legal entity, whether foreign or Indonesian, must demonstrate the economic necessity of a transaction that exceeds the threshold.
Luxembourg
Finanical Regulator Issues Circular on Management of Liquidity Risk
11/09/2009 Banks in Luxembourg and around the world have prioritized liquidity risk and risk exposure and have taken steps to improve the quality of their risk management. The Supervisory Authority of the Financial Sector has issued a circular that implements the Committee of European Banking Supervisors' principles on liquidity risk management provisions and the prudential supervision of liquidity risk.
Credit Institutions: Guidance on Assessment of Acquisitions and Increases in Holdings
22/05/2009 The Law of July 17 2008 has entered into force, implementing the EU Acquisitions Directive. The Supervisory Authority of the Financial Sector has issued a circular that, among other things, offers guidance on the approach it will take in assessing acquisitions of credit institutions.
Protecting Customers of Credit Institutions
30/01/2009 Customers of credit institutions and investment firms benefit from two guarantee systems: deposit guarantee schemes for customers of credit institutions and compensation schemes for investors in credit institutions and investment firms. However, due to the current financial crisis the guaranteed amount of the deposit guarantee scheme has recently been increased to cover deposits up to €100,000.
Mexico
Bank of Mexico Issues Guidelines on Bank Charges
25/09/2009 The Bank of Mexico has issued the General Guidelines on the Collection of Bank Charges. The guidelines aim to eliminate inappropriate practices in connection with bank charges, ensuring that such fees and the mechanisms for their collection are transparent and that charges are incurred only for services rendered.
Modified Rules to Mitigate Credit Risk and Stimulate Lending
14/08/2009 An order modifying the General Rules Applicable to Financial Institutions is intended to encourage lending and boost the economy. Reassessing the role played in the banking system by guarantees from public trusts and similar entities has allowed the National Banking and Securities Commission to authorize temporary higher financing limits for development banks with such guarantees.
Transparency and Consumer Protection Changes: New Commission Agent Rules
24/07/2009 Amendments to the Financial Institutions Law aim to protect users of financial services by limiting the transactions that financial institutions may perform as commission agents. Other legislative changes require institutions to provide customers with the information needed to make investment decisions, and make them liable for damages and lost profits if they fail to do so.
Ministry Publishes New Money-Laundering Rules for Banks
22/05/2009 The Ministry of Finance has published a new set of rules on money laundering to be adopted by commercial banks. The new rules are intended to create a modern regulatory scheme to combat organized crime and prevent money laundering through financial transactions. Among other things, banks are required to maintain a clear and precise customer identification policy and procedure.
Panama
Legal Implications of Banking Regulator's Intervention
06/03/2009 Following steps taken by the US financial authorities, Panama's banking regulator recently formally intervened in Stanford Bank (Panama) SA, a branch of Stanford International Bank. This is the first time that the regulator has exercised its intervention powers under the recently reformed banking law.
Russia
Movable Pledges: New Law Aims at Simpler Foreclosure Procedure
14/08/2009 Amendments to the law on pledges of movable assets are intended to simplify foreclosure on and disposal of pledged assets without a court ruling. However, gaps in the new provisions prevent pledge holders from exercising the right to begin a levy of execution without court proceedings.
Canada
Bank's Efforts to Assist Another Bank in Recovering Fraud-Related Losses Endorsed
18/09/2009 The Supreme Court recently held that banks may, in certain circumstances, recover fraud-related losses from accounts of unwitting beneficiaries of a fraud and assist each other in such recovery efforts. Relying on the common law principle of mistake of fact, the court held that the defendant was entitled to debit funds from its client's accounts in order to indemnify another bank for losses relating to payment on a counterfeit cheque.
Real Costs of Proposed New Credit Card Regulations
17/07/2009 With 68 million cardholders and over 27 million active cards in circulation, it is clear that Canadians love their credit cards. On the heels of similar measures introduced in the United States, Finance Minister Jim Flaherty recently unveiled a number of new proposed regulations that will affect the credit card industry.
Court Shows Willingness to Rewrite Standard Loan Guarantee Forms
29/05/2009 A recent Ontario Court of Appeal decision highlights the risks facing lenders that rely on standard form security agreements to enforce the obligations of defaulting borrowers. The court applied the remedy of rectification to the plaintiff bank's standard personal guarantee and collateral mortgage forms, allowing the bank to enforce on only the collateral mortgage, even though the personal guarantee was a separate obligation.
Security on Investment Property: New Quebec Legislation
03/04/2009 The Quebec Act Respecting the Transfer of Securities and Establishment of Security Entitlements recently entered into force. Modernizing the law governing securities transfer is certainly warranted and perhaps somewhat overdue. Today's economic frenzy highlights the importance of clear settlement rules for all stakeholders. This is particularly true for creditors taking the securities as collateral.
Estonia
Regulation on Assessment of Financial Sector Acquisitions and Increases in Holding
02/10/2009 Legislation amending the Investment Funds Act, the Insurance Activities Act, the Credit Institutions Act, the Securities Market Act and the Central Register of Securities Act aims to bring the relevant laws into line with the EU Qualifying Holding Directive, which provides procedural rules and evaluation criteria for the prudential assessment of acquisitions and increases in holding in the financial sector.
New Measures to Improve Protection of Fast-Loan Borrowers
24/07/2009 Parliament has been seeking to adopt measures to resolve problems that have arisen in connection with so-called 'fast loans' and, in particular, the interest rates on these loans. As a result of recent legislative amendments, transactions entered into under extremely unfavourable conditions or which result in the value of the parties' mutual contractual obligations being unbalanced are considered void.
New Measures to Tackle the Financial Crisis
15/05/2009 Parliament is seeking to adopt measures that will enable the legislative and governmental bodies to react efficiently to the financial crisis. The measures enable Parliament to issue state guarantees and loans to credit institutions for the purpose of tackling or alleviating the crisis. The rules on the state's participation in private legal entities have also been relaxed.
Supreme Court Clarifies Consequences of Consumer Credit Contract Breach
13/03/2009 In a recent decision the Supreme Court analyzed the legal consequences of a breach of a consumer credit contract. The decision focused mainly on the enforceability of various types of legal claim (including late payment interest, contractual penalty, compensation of expenses and other damages) that a lender can submit against a consumer in the event of default on a consumer credit contract.
Italy
Setting a Benchmark? Regulator's Policy and Proceedings on Interchange Fees
30/10/2009 In the past few years the European Commission and the Italian Competition Authority have both examined the retail banking sector and multilateral interchange fees. Seen in the context of the Italian regulator's previous interventions in the sector, the ongoing proceedings against MasterCard and several other banks could have significant consequences in the European context.
Coping with the Crisis: New Government Powers to Safeguard Bank Liquidity
06/03/2009 The government has passed urgent legislation to assist in the recapitalization of Italian banks and to improve their liquidity, giving the Ministry for Economic Affairs and Finance wide-ranging powers. A recent implementing decree specifies criteria, conditions and procedures for state intervention, but it remains to be seen whether the measures will restore public confidence in Italy's unstable financial system.
Spain
Draft Law Prepares Spain for SEPA
16/10/2009 In early 2009 Parliament approved a draft of the Payment Services Law. It will implement in Spain the EU Directive on Payment Services, the aim of which is "to establish at Community level a modern and coherent legal framework for payment services". The Spanish implementation of the directive will remove the barriers which have restricted the complete development of the Single Euro Payments Area.
Impact of Insolvency on Mortgages: Practical Issues for Lenders
30/01/2009 In light of the current economic climate, financial entities with exposure to Spanish borrowers which are suffering the consequences of the credit crunch must analyze the resources that they have in their facility agreements and the terms under which the relevant security scheme was set in place.
Austria
Termination of Loan Facility in Case of Financial Deterioration
24/07/2009 In a recent case the Supreme Court had to decide whether a creditor has the right to terminate a loan facility because of the debtor's worsened economic situation. A creditor may cancel a loan agreement in case of deterioration of the debtor's financial circumstances; however, if the creditor itself causes the deterioration, such right of cancellation does not exist.
Supreme Court Rules on the Separation of Money in Bankruptcy
01/05/2009 In a recent case the plaintiff transferred money into the bank account of the defendant (common debtor) once the bankruptcy proceedings had opened after confusing the name and account of the defendant with the name and account of his real creditor. After realizing his mistake, the plaintiff claimed from the bankruptcy estate the segregation of the amount credited to the bank account and its repayment.
Germany
Bad Bank Act: Two Models for Reducing Burden on Banks
04/09/2009 The Act for the Further Development of the Financial Markets Stabilization – often referred to simply as the 'Bad Bank Act' – recently came into effect. The act provides the opportunity for short-term relief of bank balance sheets, thus promoting lending to the real economy. The act is targeted at financial institutions, financial holding companies, their subsidiaries and special purpose companies.
Supplementary Financial Market Stabilization Act Passed
27/03/2009 Parliament has passed the Supplementary Financial Market Stabilization Act, which includes some improved and some new tools for stabilizing the financial markets, but which is primarily intended to provide the foundation for the nationalization of the real estate financing company Hypo Real Estate AG. The act is likely to take effect in Spring 2009.
New Law on Aircraft Mortgage Bonds
13/02/2009 German banks will shortly be able to refinance loans granted for aircraft on more favourable terms than previously as the federal government intends to issue aviation bonds to secure German banks' leading position on the market for the financing of aircraft. The Law on Development of Bonds is intended to create a better framework for German bonds without relaxing the associated high collateral requirements.
Guernsey
Establishment of New Deposit Protection Scheme
27/03/2009 The States of Guernsey has established a deposit compensation scheme to protect the deposits of retail depositors with local banks. The scheme covers the first £50,000 of deposits by individuals. As part of the second level of funding for the scheme, a captive insurance company has been established to fund the first £20 million of risk of the scheme.
Norway
Government Introduces New Banking Measures
17/07/2009 Banks can now exchange covered bonds issued by covered bond issuers against short-term government papers. Another new measure is the creation of the Government Finance Fund, to which Parliament has allocated Nkr50 billion. Its purpose is to make temporary contributions to the core capital of Norwegian banks in order to strengthen them and place them in a better position to maintain normal lending activities.
USA
Federal Reserve Issues Regulations to Implement Credit CARD Act of 2009
30/10/2009 The Board of Governors of the Federal Reserve System has issued a proposed amendment to Regulation Z to implement the Credit Card Accountability Responsibility and Disclosure Act of 2009. The act enacted substantial new limitations and requirements for credit card issuers. The proposal provides much-needed detail on how those new limitations and requirements will apply to the industry.
FDIC Issues Final Guidance on Private Equity Investments in Failed Banks
11/09/2009 The Federal Deposit Insurance Corporation (FDIC) has adopted its final Statement of Policy on the Acquisition of Failed Bank Depository Institutions. While the FDIC has relaxed some of the originally proposed restrictions, the statement still stands as a significant impediment to private equity financing of the resolution of failed institutions.
Federal Reserve Issues Implementing Rules for Key Provisions of Credit CARD Act
07/08/2009 The Federal Reserve has released implementing regulations for two key provisions of the Credit Card Accountability Responsibility and Disclosure Act of 2009. The provisions require creditors to deliver periodic statements at least 21 days before a due date and to provide notice of changes relating to credit card accounts at least 45 days in advance of the effective date.
Furnisher Obligations under FACT Act: Final Rule Released
26/06/2009 The Fair and Accurate Credit Transactions Act amended the Fair Credit Reporting Act to require the federal banking agencies and the Federal Trade Commission to issue guidelines for use by furnishers of information to consumer reporting agencies. The accuracy and integrity rule requires furnishers to evaluate their current policies and procedures and revise them as necessary based on specific guidelines.
President Issues Memorandum Regarding Pre-emption
19/06/2009 The president has released a presidential memorandum setting out the administration's general policy with regard to federal pre-emption of state law by executive departments and agencies of the federal government. In the last 10 years the federal banking agencies have taken several regulatory actions, including the adoption of final rules, that construe the extent to which federal law pre-empts state law.
Significant Changes to Regulation of Credit Cards and Stored Value Products
12/06/2009 The House of Representatives and the Senate have both passed the Credit Card Accountability Responsibility and Disclosure Act of 2009. One of the most significant provisions of the act is a provision that may be used to limit certain credit card charges substantively. Another key provision relates to issuers' apparent obligations to reduce annual percentage rates in some circumstances.
Colombia
Financial Reform Signed into Law
09/10/2009 The Colombian Financial Reform Law introduces certain changes to the regulatory framework of the financial system. Among other things, it establishes a new regime for the protection of financial consumers, authorization for new activities for banks and new regulations for the development of microloans and microfinance.
Important Advancements in Trust (Fiducie) Regulation
03/04/2009 There have been difficulties in the interpretation and execution of fiducie contracts, given the lack of clear rules regarding certain aspects of such contracts. Circular 46/2008, issued by the Financial Superintendence, addresses this and provides clearer parameters to fiduciary agreements, thus reducing uncertainty.
Overview (February 2009)
06/02/2009 Including: Incentives for Expansion of Banking Services; Data Protection Issues; Money Laundering; Interest Rates.
Finland
Impact of Financial Crisis on the Banking Sector
29/05/2009 Since late 2008 the financial crisis has rapidly weakened the global economy and has demonstrated that Finland is not isolated from disturbances in the global financial markets. However, according to a recent analysis published by the Financial Supervisory Authority, the profitability of the banking sector has materially weakened, but loss-bearing capacity remains fairly solid.
Banks May Raise Margins if Capital Adequacy is at Risk
06/02/2009 The Federation of Finnish Financial Services has issued revised loan terms providing that a bank has a right to increase the margin applicable to a loan if it is required to do so in order to maintain the bank’s capital adequacy or liquidity at a sufficient level. However, the revised standard terms may be applied only to new loans, and not to existing loans.
Greece
Surviving the Crisis
30/10/2009 Greece began the year rather badly in terms of creditworthiness. However, doubts over demand for bonds at reasonable spreads faded and spreads tightened as fragile confidence has been gradually rebuilt. The new moderately socialist government is expected to do better at addressing contentious issues within the economy, in terms of both revenue and spending.
Race for Capital Adequacy
17/07/2009 The National Bank of Greece has anticipated the need for capital in the banking sector with a €1.25 billion share issue, which has caught most of the other major Greek banks off guard, although some smaller banks have already launched or are implementing capital increases. The Greek credit rating bureau Teiressias has introduced a credit-scoring system, the effect of which remains to be seen.
Support Plans for Banks, Monitoring Housing Loans and Residential Property Indexes
24/04/2009 The state support plan for Greek banks, which aims to enhance liquidity in the domestic market, is facing a number of implementation difficulties. As a result, its progress has been disappointing. Some problems relate to the plan's incompatibility with existing corporate legislation (eg, in the case of equity support by issue of preferred shares to the state against state bonds in lieu of cash); others have to do with the form of support.
Issues with Cash Pooling and Bond Loans
27/02/2009 In the effort to overcome the worldwide financial crisis, every available financing tool is useful. Governments should aim to make financing accessible, legally stable and cost effective (including applicable taxation). Unfortunately, such goals are not always well served; this update provides two controversial examples relating to the function of cash pooling and certain bond loans in Greece.
Japan
The Dawn of E-money Claims
09/10/2009 In light of the widely recognized need to promote financing for small businesses, new legislation has introduced a system for electronic monetary claims. Such claims are intended to accelerate accounts receivable financing, but they have many other potential uses, including the liquidation of syndicated loans and the stabilization of cash management systems.
Reform of Civil Code: Impact on Banks
10/07/2009 The Ministry of Justice has published a draft reform of the Law of Obligations, part of the Civil Code. The draft reform covers a wide range of topics, including several which could have a significant impact on banking practice: set-off, prescription, the assignment of claims and joint and several obligations.
Amended Ordinance Facilitates Islamic Finance
03/04/2009 An amendment to the Ordinance on the Enforcement of Banking Law is the first provision in Japanese law that clearly allows a subsidiary of a bank or a bank holding company to conduct Islamic finance. It covers transactions that are loan transactions in substance, but not in form, including murabaha and ijara - both forms of financing for purchase or rental.
New Paperless Share System and its Impact on Stock Collateral
09/01/2009 The securities settlement system has been improved to enable paperless transactions in commercial paper, government bonds and corporate bonds in Japan. This update reviews the new book-entry transfer system for paperless shares in listed companies and the handling of security interests in such stock in secured financial transactions.
Kenya
Lending Policy: Recommendations for Review
22/05/2009 Existing regulations on lending are unhelpful to lending institutions since they have always assumed that lending is the basis for growth and profitability. The blame for the current situation lies neither with borrowers nor with lending institutions, but rather with Parliament. It is now up to Parliament to review lending policy and accordingly close the gaps in the Banking Act.
Latvia
Government Approves Support Programme for Troubled Borrowers
21/08/2009 The government recently approved a support programme for troubled borrowers. The programme was prepared in cooperation with Latvian banks and the International Monetary Fund. Under the programme, the state will underwrite mortgage loans which have previously been restructured on which the borrower, due to the economic situation, is likely to default or has defaulted.
Consumer Rights Protection Law Amended to Protect Mortgage Borrowers
12/06/2009 The Saeima (Parliament) has adopted amendments to the Consumer Rights Protection Law aimed at protecting mortgage borrowers from the unreasonable requirements of credit institutions. The amendments contain specific provisions regarding loans which have been provided to consumers and secured with mortgages.
Parliament Adopts New Law on Bank Takeovers
06/03/2009 The new Law on Bank Takeovers recently came into force, stipulating the conditions and procedures for bank takeovers by the state. According to the law, a bank takeover is permissible in exceptional cases where the stability of the banking system and the smooth operation of payment systems are seriously threatened or potentially threatened.
Switzerland
The UBS Case: Consequences for Swiss Bank Secrecy
05/06/2009 In February 2009 the identities and account details of around 300 clients of UBS were transmitted to the US authorities following a decision of the Financial Market Supervisory Authority. The legality of this decision is being challenged before the Federal Administrative Supreme Court. Taxpayers with bank accounts in Switzerland would be well advised to monitor these developments closely.
Incentive Systems and Conflicts of Interest in Distribution of Financial Products
27/03/2009 The Financial Market Supervisory Authority has released a report on the issues raised by 'distribution compensation', the term used to describe practices whereby banks or independent asset managers receive benefits from originators of financial products in exchange for their distribution services. Where the distribution partners also have loyalty duties towards their clients, conflicts of interest can arise.
Capital Markets
India
SEBI Notifies Regulations on the Delisting of Equity Shares
29/09/2009 The Securities and Exchange Board of India recently notified new regulations on the delisting of listed company equity shares. As well as providing greater clarity on the procedures involved in the delisting of equity shares, the regulations introduce more stringent requirements for the voluntary delisting of equity shares, making this process more difficult for company promoters.
SEBI Introduces Measures to Rebuild Investor Confidence
21/07/2009 The Securities and Exchange Board of India (SEBI) has announced a series of measures to boost investor confidence in the primary market and mutual funds. Among other changes, SEBI has now approved the concept of 'anchor investors', which is widely used around the world. An anchor investor is an investor which subscribes to up to 30% of the quota for institutional investors in an initial public offering.
Promoters’ Disclosure of Pledged Shares Made Mandatory
17/02/2009 The Securities and Exchange Board of India has made it mandatory for company promoters to reveal details of shares they have pledged in their listed entities. Promoters must provide details of the pledge of shares and the release or sale of pledged shares to the company, and the company will report the same to the public through the stock exchanges.
Securities and Exchange Board Investigates Post-Satyam
03/02/2009 Following the Satyam scandal, the Securities and Exchange Board of India has initiated a brainstorming session to assess the role of top company personnel (eg, promoters and independent directors) and to address problematic grey areas in various pieces of legislation (eg, the insider trading regulations).
Austria
Short-Selling Measures Update
07/07/2009 Previously, short selling was addressed only in the context of market manipulation and under the Vienna Stock Exchange trading rules. However, in light of the global financial crisis, the government has introduced measures to mitigate the effects on the Austrian economy by providing stability to the financial market.
Banks Rediscover Participation Capital
24/02/2009 Trying to rely on governmental support to increase a bank's Tier I ratio while keeping state influence to a minimum? Austrian credit institutions recently rediscovered the benefits of participation capital when it comes to increasing their Core Tier I ratio and enhancing their risk-bearing capacity.
Colombia
Self Regulation in Securities Markets
14/07/2009 Decree 039/2009 allows self-regulatory organizations, among other things, to regulate every activity, transaction, service, product or market activity performed by the entities supervised by the Superintendencia Financiera (Colombian supervisory agency for financial institutions and securities market entities) and any other entity developing related activities that voluntary accepts the self-regulatory organization's jurisdiction.
Guernsey
Investor Protection Regulations Amended
09/06/2009 Changing market conditions are having an effect on the risk appetite of investors in selecting investments. Increasingly, investors are mindful of the level of regulation in place in the jurisdictions in which investment vehicles are established. In response, Guernsey has finalized the detail on a number of measures that have been in the pipeline and enacted three new laws.
Indonesia
New Regulations on Public Offerings
01/09/2009 The Capital Market and Financial Institution Supervisory Agency is continuing its efforts to improve the efficiency and effectiveness of public offering procedures. Among other things, a new regulation allows the agency to issue a statement that allows an issuer to conduct book building. It also provides issuers with mechanisms for discontinuing and suspending an offering because of market conditions.
New Standards for Securities Rating Agencies
04/08/2009 The Capital Market and Financial Institution Supervisory Agency has issued long-awaited rules and regulations on securities rating agencies. The new regulations require an agency's directors, commissioners and analysts to meet standards of integrity, competence and expertise.
New Regulation on Margin Trading and Short Selling
28/04/2009 The Indonesian Stock Exchange's Regulation on Margin Transactions and Short Selling is aimed at providing greater clarification on the procedures for obtaining approval for margin and short-selling activities by members of the stock exchange. It clarifies the reporting requirements and periodical inspection regime to which members are subject.
Russia
Default by Corporate Bond Issuers on Bonded Loan Obligations
14/04/2009 Bonds are widely used as a means of raising funds for corporate expansion and the state has encouraged the development of the exchange-traded bond market. However, since the final quarter of 2008 Russian bond issuers have increasingly been defaulting on their bonded loans, exposing uncertainties in bond market legislation and its application in practice.
Czech Republic
Implementation of the EU Transparency Directive
29/09/2009 An important amendment to the Capital Markets Act recently became effective. Among other things, the amendment implemented the EU Transparency Directive. The provisions in question deal with periodic financial reporting and other issuer obligations, major shareholding disclosures and the provision of information to investors.
Spain
New Procedures for Securities Issuers to Communicate Material Information
08/09/2009 The Ministry of Economy and Finance has approved an order to enforce new procedures and methods for securities issuers to communicate material information. The order establishes that securities issuers must communicate material information to the market and the Comisión Nacional del Mercado de Valores as soon as they become aware of the event.
New Requirements for Custodians of Collective Investment Institutions
01/09/2009 The National Securities Market Commission Circular regulates the content of communications that custodians must send every six months to the commission for each management company for whose collective investment institutions they are custodians, or for each self-managed open-end investment company for which they are custodians, on the reference date of the six-monthly report.
Securities Commission Guide to Transmission of Inside Information to Third Parties
12/05/2009 The Stock Exchange Commission recently published a guide on the transmission of inside information to third parties. The guide contains a series of non-binding measures and recommendations to ensure the confidentiality of inside information held by issuers and disclosed to third parties in accordance with the Securities Market Act.
Requirements for Financial Advising Firms
13/01/2009 The EU Markets in Financial Instruments Directive creates a new kind of investment service, which will be carried out by so-called ‘financial advising firms’ (FAFs) and places it among the financial services subject to prior authorization. Royal Decree 217/2008 regulates the procedure to authorize a FAF, as well as the financial requirements and the aspects which must be fulfilled for its establishment.
Jersey
Cash-Box Structures and Convertible Bond Issues
12/05/2009 Companies in the United Kingdom are facing needs to recapitalize their balance sheets and raise money from their assets. Convertible and exchangeable bonds offer a way of meeting these various requirements. Structuring a convertible or exchangeable bond issue using a Jersey cash-box structure can make it easier to implement the bond issue and may also offer other benefits.
Cash Boxes: Use of Jersey Companies in Rights Issues
24/03/2009 Structuring a rights issue for a UK listed company using a Jersey cash box vehicle can make it easier to implement and add to the benefits therefrom. The advantages that a cash box structure offers are flexibility in relation to making the offer and, in relation to the proceeds of the issue of the shares, the availability of merger relief under the UK Companies Act.
Kenya
Commercial Banks in Stockbrokerage
25/08/2009 Traditionally, stockbrokerage firms have had the mandate to deal in listed shares at the bourse. However, a new trend is emerging whereby commercial banks, which previously participated only in underwriting, are taking over stockbrokerage firms. The question has arisen as to whether such takeovers are grounded in law or whether they represent an exploitation of loopholes in capital markets legislation.
Oman
New Executive Regulations for Capital Market Authority Law
14/07/2009 The Capital Market Authority has issued a new set of executive regulations to the Capital Market Authority Law. Although the new regulations contain new provisions - including, for the first time, regulations dealing specifically with credit rating companies - their primary focus appears to be consolidation.
United Kingdom
The Future of Prime Brokerage: Practical Issues for Hedge Funds
24/02/2009 The Lehman Brothers insolvency has thrown the spotlight onto prime brokerage agreements, the prime brokerage model and the crucial role that both play in dealing with prime broker credit risk. Among the central issues are the level of protection provided by segregating assets, the speed with which assets can be returned to hedge funds and the common market practice of rehypothecation.
Recent Short Selling Developments
10/02/2009 The Financial Services Authority has issued its long-awaited discussion paper on the long-term treatment of short selling. The paper sets out a variety of policy options for what should replace the current disclosure regimes relating to the shares of listed companies undergoing a rights issue and quoted UK financial sector companies.
FSA Reviews Listing Regime Structure
27/01/2009 The Financial Services Authority (FSA) has published its consultation on amendments to the Listing Rules to amend the structure of the listing regime. Among other things, the FSA invited views on the super-equivalent standards of the listing regime in light of the Financial Services Action Plan directives and the FSA's role in standard setting.
Treasury Publishes Responses to Consultation on Part 7 of Companies Act
27/01/2009 The Treasury has issued a summary of the responses to its consultation on amendments to Part 7 of the Companies Act 1989. Among other things, the proposed changes provide for the operation of default rules where interoperability arrangements exist between recognized clearing houses and recognized investment exchanges, and amend the provisions on margin set-off agreements between such entities.
FSA Consults on Expansion of Approved Persons Regime
20/01/2009 The Financial Services Authority is consulting on proposed changes to its approved persons regime that could affect fund manager structures involving a UK authorized manager. Among other things, UK fund managers structured as companies rather than limited liability partnerships may need to register their parent companies' senior executive management teams as approved persons.
Canada
Full Disclosure: Proposed Changes to Mutual Fund and Segregated Fund Sales
23/06/2009 The Joint Forum of Financial Market Regulators recently assessed disclosure of mutual funds and segregated funds. The forum's view is that the current disclosure regime is inadequate. Specifically, it found that the current disclosure regime does not give meaningful information to fund investors before investors make purchase decisions.
Italy
Borsa Italiana Unveils AIM Italia
24/02/2009 A recently launched market, AIM Italia, gives small and medium-sized enterprises with strong growth potential the opportunity to access international venture capital. However, its success will ultimately depend on the company's determination to attract investment, the efficiency of the market's rules and the independence and impartiality of its nominated advisers.
Singapore
Monetary Authority Consults on Mandatory Annual General Meetings for REITs
09/06/2009 The Monetary Authority of Singapore has invited public comments on a proposal to require real estate investment trusts (REITs) in Singapore to hold annual general meetings once every calendar year. In light of the volatile market conditions, opponents of the proposal will be hard pressed to justify a rejection of the measures, which would benefit REITs, REIT managers and unitholders.
Disclosure of Pledges over Shares by Directors and Controlling Shareholders
02/06/2009 The financial meltdown has raised a new issue: should directors and controlling shareholders disclose that they have pledged their shares in the company as collateral for personal loans? Proponents for greater transparency assert that investors' interests are at risk if directors or controlling shareholders do not disclose that their shares in the company have been pledged.
New and Revised Listing Rules Promise Greater Market Efficiency
31/03/2009 Singapore Exchange Limited has introduced new and revised listing rules to meet varying market needs. The broadening of the range of listings and the strengthening of corporate governance and disclosure requirements are a welcome response to the global financial downturn.
SGX Gives Issuers Greater Fundraising Flexibility
24/03/2009 In response to increased market volatility and difficult market conditions, Singapore Exchange Limited has introduced measures - in consultation with the Monetary Authority of Singapore - to give listed issuers greater flexibility in raising funds. The measures include an extension of the right to issue shares on a pro rata basis and an increase in the discount for placement exercises.
A Boost for Biotech: Life Sciences Companies on Catalist
17/03/2009 Singapore Exchange Ltd has invited comments on its proposed listing rules for non-commercialized life sciences companies on Catalist, its sponsor-supervised board for fast-growing companies. The proposed rules impose requirements in terms of a company's track record and the adequacy of its working capital, but these safeguards will foster public confidence and boost the life sciences industry.
Parlliament Passes Amendments to Securities and Futures Act
03/03/2009 Parliament has passed a bill which will effect several substantial changes to the Securities and Futures Act. Among other things, it introduces a one-off licensing regime for the granting of capital markets services licences, alters the terms of the prospectus exemption and introduces compulsory acquisition provisions for real estate investment trusts and business trusts.
Sweden
One Year With MiFID: The FSA's Assessment
01/09/2009 The Swedish Financial Supervisory Authority (FSA) has investigated over 100 financial institutions to identify problems and issues arising from the implementation of the EU Markets in Financial Instruments Directive. Its overall evaluation is that the institutions examined have taken steps to adapt to MiFID and that most fulfil the regulations' requirements. The FSA is planning several investigations based on its results.
Burgundy: A New Multilateral Trading Facility for Nordic Securities
19/05/2009 Burgundy, a new Nordic marketplace for securities trading, has received regulatory approval from the Swedish Financial Supervisory Authority to operate a multilateral trading facility. The facility will aim to ensure high liquidity, low transactional costs, short response times and optimal execution. Burgundy aims to become a leader in the Nordic securities trading market.
Commercial Property
Ireland
Green Buildings: The Building Energy Rating System
20/03/2009 According to recent regulations, every new dwelling and non-domestic building offered for sale or rent to any prospective purchaser or tenant must have an energy rating certificate provided by a certified building energy rating assessor and be accompanied by an advisory report.
Lithuania
Long-Term Lease Agreements: Made to Be Kept?
09/10/2009 The commercial property sector has been hit hard in 2009 and many tenants are trying to terminate or modify their long-term lease agreements. Recent first instance decisions are worrying for landlords and much will depend on whether the economic downturn and its effect on real estate rental values can be said to constitute a significant change in circumstances.
Energy Performance Certificates for Old and New Commercial Buildings
24/04/2009 Until recently the requirement to obtain an energy performance certificate applied only to newly built and certain renovated buildings. However, the requirement has since been extended to most commercial buildings with a useful floor space of over 1,000 square metres, regardless of their construction date.
Poland
Terminating a Lease Agreement in Case of a Tenant's Bankruptcy
19/06/2009 The consequences of the financial crisis are already being witnessed in the form of bankrupt entrepreneurs and enterprises. The consequences of a tenant's bankruptcy for an existing lease or tenancy agreement will be of significant interest to landlords, which should be aware of their rights in such cases. For instance, can a landlord terminate a lease agreement before bankruptcy proceedings have been completed?
Draft Building Law Amendments
24/04/2009 Parliament is currently considering revolutionary amendments to the Building Law. The proposed regulations provide for extensive amendments in respect of the construction and development processes. The main purpose of the amendment is to facilitate the investment process and make it less formalized - developers will no longer need to obtain a building permit to carry out an investment project.
Austria
Court Intensifies Directors' Personal Liability in M&A Deals Involving Property
24/07/2009 Section 12a of the Tenancy Act provides that if the shares in a company that rents property are sold, the landlord has the right to increase the rent to market level. The managing directors of such company must inform the landlord of the change in ownership. In a recent judgment the Supreme Court held that failure to notify the landlord can result in managing directors being held personally liable by future landlords.
New Act on Security Deposits: Tenant Rights, Landlord Troubles
01/05/2009 As in most countries, landlords in Austria regularly require a security deposit as a condition of the rental agreement. This deposit provides the landlord with a degree of protection from any damage done to the rented premises or any failure on the part of the tenant. Despite its significant practical importance, no previous legal framework existed for the security deposit. A recent amendment to the Rent Act has filled this gap.
Energy Performance Certificates: A Toothless Tiger?
30/01/2009 The EU Energy Performance of Buildings Directive provides that when a building or apartment is sold or rented out, an energy performance certificate (EPC) must be made available by the owner of the building to the prospective buyer or tenant. This update outlines the circumstances in which an EPC must be produced and examines the consequences of violations of the Act on the Presentation of Energy Performance Certificates.
Switzerland
Falling Reference Mortgage Interest Rate May Trigger Requests for Rent Reduction
03/07/2009 The Switzerland-wide reference mortgage interest rate which is published quarterly by the Federal Housing Office forms the basis for requests by landlords or tenants for rent increases or reductions. This update outlines the existing rules on rent reductions in lease agreements and considers whether the existing, rather complex system is likely to be changed in the near future.
Bermuda
Condominium Owners: It Pays to Be Neighbourly
08/05/2009 Homes in Bermuda are generally owned either by way of freehold ownership or condominium ownership. This update looks at long leasehold condominiums, where the condominium owner is the tenant and the condominium association is the landlord. The condominium long lease governs the relationship between owners and condominium associations.
Ukraine
Extending State and Municipal Real Estate Agreements
18/09/2009 A recent statement from the State Property Fund has clarified the application of legislative amendments on the renewal of state and municipal real estate lease agreements, setting out the terms on which a lessor of state property may extend a lease agreement without the explicit approval of the authority that manages the property for the state.
Obtaining State Certification of Ownership Rights
18/09/2009 The Cabinet of Ministers has instituted a simplified procedure for the issuance and execution of state certificates of land ownership rights for Ukrainian citizens. The implementing order states that the authorities may not accept payment from citizens for the execution and issuance of certificates or the provision of additional and related services relating to the preparation of land development documentation.
New Procedure of Providing Initial Data for Urban Planning Projects
14/08/2009 The Cabinet of Ministers has recently issued the Resolution on the Adoption of the Procedure for Providing Initial Data for Planning Urban Construction Objects. Among other things, it defines the principal elements of initial data for the planning of urban construction.
Change in Concession Conditions for Communal Properties
19/06/2009 The Cabinet of Ministers has issued a resolution amending the model concession agreement to specify concession terms for central heating systems, cold and hot water supply and drainage for communal property. It sets out the obligations for concessionaires and stipulates the conditions for cancelling a concession agreement.
Real Estate Markets: What Chance of Recovery?
12/06/2009 Ukraine has seen a far greater fall in real estate prices than many other European countries; moreover, investors are unwilling to enter the market because they have no clear view of the national economy's prospects and are unsure whether property prices have hit rock bottom. However, many would be prepared to invest if the political and economic situation were to stabilize.
Land Code Changes Simplify Registration of Title
01/05/2009 In Ukraine, the period between the conclusion of a purchase agreement for land and the issuance of a state certificate can be up to one year, which essentially limits the buyer's right to use or dispose of a plot during that time. Recent changes to the Land Code - the legal basis for recording title in land - have been widely welcomed and further implementing regulations are expected soon.
Canada
Sub-tenants' Rights under the Commercial Tenancies Act (Ontario)
15/05/2009 The ongoing uncertainty in the economy and the resultant market slowdown have tenants re-evaluating their space needs. After considering their options and weighing demand, some tenants determine that the appropriate way to shed space on a cost-effective basis is to sub-let all or a portion of it to a third-party sub-tenant. Often a condition of a sub-lease is the sub-tenant's waiver of its rights in case of termination of the head lease.
Preventing an Insecurity Complex: What to Do Before Your Landlord Goes Under
08/05/2009 In economic downturns, talk in the commercial leasing industry inevitably turns to what to do with unreliable tenants and how best to protect the position of the landlord. However, it is not only landlords and sub-landlords that are facing problems; tenants and sub-tenants are increasingly finding themselves left out in the cold, figuratively and literally, when their landlord or sub-landlord faces financial difficulties.
Buying Time: Rent Relief Agreements
01/05/2009 As a result of the current economic downturn, many commercial tenants are finding themselves in precarious financial positions and are approaching landlords to seek rent relief in order to survive until the economy recovers. While landlords are often hesitant to diminish their revenue stream by granting rent relief, they may have a strong self-interest in facilitating a successful lease restructure if the tenant's need is genuine.
Tenant Exit Strategies
24/04/2009 Given the weak economy, many tenants may find themselves with premises that they no longer require or which they need to dispose of in order to cut costs. This update explores some of the more common exit strategies employed by tenants, each of which is fraught with business and legal issues.
Commercial Lease Gross-Ups
13/03/2009 Commercial leases often contain gross-up provisions relating to the calculation of the tenant's share of operating costs and realty taxes. In addition, commercial leases often include gross-up provisions relating to the calculation of the tenant's rentable area. What are gross-up provisions? Why are they necessary and are they fair? What are the issues associated with gross-ups that landlords and tenants must consider?
Developers Beware: New Amendments to Financial Crime Legislation Apply
06/03/2009 Key amendments to the regulations under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act have now come into force. These amendments include real estate developers in the group of people required to keep records and report certain transactions. Most importantly, real estate developers will have to develop comprehensive compliance regimes specifically to manage this reporting.
Germany
Court of Justice to Permit 'Cold Eviction' from Commercial Properties
14/08/2009 In a surprising ruling the Federal Court of Justice has decided that, under certain circumstances, the landlord of a commercial lease agreement is not obliged to maintain the supply of heating and other utility services to the tenant following the expiry of the lease agreement. This means that, in strictly defined scenarios, the court will now permit the use of so-called 'cold eviction'.
Real Estate Restructuring: A Necessity in a Time of Crisis
06/03/2009 It is predicted that 2009 will see emergency sales become a dominant feature of the transaction market due to the shortage of credit. Where there is a risk of a property or portfolio failing, all involved parties should prepare themselves by considering what action to take. The situation requires cooperation between all involved parties; emergency sales and execution proceedings can and must remain a last resort.
New Zealand
Instruments of Encumbrance and Restrictive Covenants in Gross
04/09/2009 The High Court has delivered a judgment that questions the practical use of registered encumbrances to bind successors in title to what are effectively covenants in gross. The use of encumbrances to secure collateral obligations is widespread and if this use were to be deemed invalid, a large number of formerly legitimate arrangements would be struck down. It is hoped that the Court of Appeal will reverse the decision.
Law Commission Review Raises Fundamental Land Transfer Issues
20/03/2009 The Law Commission has embarked on a fundamental review of the Land Transfer Act 1952. Among other things, the commission issues paper considers the courts' development of a concept of 'land transfer fraud' and problematic questions relating to unregistered interests and indefeasibility of title.
Spain
Real Estate Investment Trusts Continue Passage through Parliament
04/09/2009 The bill regulating real estate investment trusts, as sent by Parliament's lower house to the upper house, was published in the Official Gazette of the upper house in June 2009. The bill underwent various changes before its approval by the lower house. Although the special tax regime has not changed substantively, several material changes have been introduced into the version now before the upper house.
Regulating Real Estate Investment Trusts
15/05/2009 The government recently introduced a bill to regulate a new form of corporate entity - public listed companies for investment in the real estate market. The creation of such a corporation would reduce the impact of economic cycles (particularly in the real estate market, which represents 16% of Spain's gross national product) by creating a vehicle for small and medium-sized investors.
Cadastral Registration Numbers to Affect Energy Tariffs
06/02/2009 Royal Decree 1578/2008 established limits on the power capacity that can be installed per project to benefit from related energy tariffs. The decree has established a restrictive definition of ‘project’, which has a direct impact on how real estate is configured and registered.
United Kingdom
Change Is Coming for Green Property Tax Incentives
27/02/2009 Buildings generate almost half of the United Kingdom's carbon dioxide emissions. Any attempt to reduce emissions must deal with retrofitting commercial buildings, but no effective tax incentives are available for improving the energy efficiency of existing commercial stock. However, it is understood that the government intends to launch a major consultation on sustainability and existing property.
Common Sense Prevails: House of Lords Decision in Raguz
13/02/2009 The Court of Appeal described its own decision in Scottish & Newcastle plc v Raguz as "an uncommercial burden for landlords, without any real compensating benefit to former tenants". However, the House of Lords has established that a landlord need not serve a protective nil notice on a former tenant (or the latter’s guarantor) if there is an outstanding rent review or service charge reconciliation.
Lease Renewals: Tactics and Timing in a Falling Market
06/02/2009 For the next year at least, rents are likely to fall and tenants will face difficult trading conditions which will affect the lettings market. One way in which landlords will be affected is in relation to a tenant’s lease renewal strategy. If more tenants are willing to delay negotiations or fight lease renewals to trial in order to achieve better terms and lower rents, landlords may need to adopt a new approach.
Empty Threats and Rating Wars
30/01/2009 Empty properties are a growing concern for landlords. The potential tax burden on owners has risen and in a downturn the potential for disputes is greater. Some landlords are starting to consider extreme steps to minimize their liability, but a number of possible mitigation strategies can be applied.
Belgium
Clearer Visualization of Rights with a Three-Dimensional Land Register?
29/05/2009 A plot of land is seldom the exclusive domain of a single owner that chooses to use it only at surface level and for a single purpose. Real estate practitioners often struggle to gain a clear view of the extent and origin of each right ad rem that is vested in the various parts of a building. Each such right relates to a particular space, which would be easier to visualize with a three-dimensional land register.
Mortgage Information: The Dangers of the Blind Spot
30/01/2009 A notary public is ultimately responsible for the accuracy of the property deeds that he or she certifies. However, flaws in the mortgage registration and certification procedures create two periods during which a notary is uncertain of the property's status. The Royal Federation of Belgian Notaries and the Ministry of Finance are studying various remedies, but a perfect solution will be hard to find.
Sweden
Tenant Adjustments and Company Reorganizations
27/02/2009 The Land Code includes an explicit regulation regarding how landlords shall act towards bankrupt tenants. However, when a decision is made concerning company reorganization for a tenant, the rules are not as clear. One specific question relates to when tenant adaptations are to be carried out by the landlord and when they must be executed during the period of company reorganization in order to be completed on time.
Freehold Flats to be Introduced
20/02/2009 A new form of real estate - the freehold flat - is due to be introduced in Sweden in 2009. For parties that prefer to own property rather than renting it, this form of ownership will create certain benefits compared with cooperative apartments. Among other things, the freehold flat can be pledged and let in the same manner as a house.
Mexico
Modernization of Property Registry to Encourage Real Estate Transactions
16/01/2009 The often slow process of registering and searching property records has not helped the development of Mexico's primary and secondary housing credit market. It is hoped that a national programme to modernize the Public Registry of Property will facilitate real estate transactions and boost the sector in difficult economic times.
Portugal
New Transfer, Encumbrance and Registration Regime Gains in Popularity
16/01/2009 Until mid-2007 the execution of a transaction involving the transfer or encumbrance of real estate was generally subject to the execution of a notarized public deed and the subsequent registration of the transfer or encumbrance at the office of the Property Registry. A new regime for urban properties combines the two requirements in a single process.
Company & Commercial
Cayman Islands
Changes to the Exempted Limited Partnership Law
01/06/2009 The Exempted Limited Partnership Law (2007 Revision) has been amended by the Exempted Limited Partnership (Amendment) Law 2009. Many of the changes clarify the existing law and place greater reliance on the expressed provisions set forth in the partnership agreement. The amendments took effect on May 11 2009.
Kenya
Commercial Litigation and Financial Audit: Evidentiary Aspects
26/10/2009 Every financial enterprise operating under the veil of incorporation must undergo audit. Under existing legislation, auditors have no express duties beyond those of professional persons. Since the result of a litigation claim of a technically commercial nature often depends on an auditor's evidence as an expert witness, that auditor's legal liability should reflect his or her ability to influence the outcome of a case.
Problems with Hire-Purchase Transactions
23/02/2009 Although hire-purchase transactions have been beneficial to parties interested in acquiring goods, many of the requirements of such agreements have proven cumbersome. Minimum payment clauses often treat parties unfairly and the requirement for agreements to be registered is superfluous. The situation calls for a review.
Latvia
Commercial Transactions: New Chapter Added to Commercial Law
22/06/2009 The Saeima (Parliament) has amended the Commercial Law, adding a new chapter on commercial transactions. The new chapter will introduce to the legal system provisions regulating commercial transactions, with the aim of increasing the speed and simplicity of commercial relationships, providing them with greater stability and allowing for higher levels of trust and responsibility between parties.
Commercial Law Supplemented by Chapter on Commercial Transactions
02/03/2009 The absence of regulation on commercial transactions had long been considered one of the most significant drawbacks of the Commercial Law. The Saeima recently supplemented the law with a chapter entitled "Commercial Transactions", containing general provisions on commercial transactions, as well as special provisions on specific types of commercial transaction.
Poland
Draft Amendment Adopted to Enhance Corporate Governance
19/01/2009 In response to the EU Directive on the Exercise of Certain Rights of Shareholders in Listed Companies, Parliament recently adopted an important amendment to the Commercial Company Code. Its main purpose is to enhance corporate governance in Polish joint stock companies by strengthening and facilitating the exercise of shareholders' rights.
A Welcome Change? Minimum Capital Requirements Lowered
12/01/2009 A relatively high minimum share capital requirement has long been considered an effective tool to safeguard the interests of creditors in dealings with capital companies. However, this approach has recently been revised due to pressure from legal and commercial commentators and researchers. Following in the footsteps of recent EU legislation, changes have been made to Polish law in a bid to promote entrepreneurship.
United Arab Emirates
Minimum Share Capital Requirements for LLCs Amended
28/09/2009 The federal government has issued a decree amending Article 227 of the Commercial Companies Law, with the effect of abolishing minimum share capital requirements for limited liability companies (LLCs) in the United Arab Emirates. According to the amendment, shareholders have the right to determine the share capital of their LLCs, provided that the LLC has sufficient capital to achieve its objects.
Restrictions on Foreign Ownership of UAE Companies Reviewed
15/06/2009 UAE federal laws require nearly all types of foreign-owned company to have at least 51% of their shares owned by a UAE national or a company wholly owned by UAE nationals. The World Bank has identified this statutory requirement for a UAE national partner as an impediment to higher levels of investment. Thus, the government is looking to amend the Companies Law to allow for greater foreign equity participation in UAE companies.
Family Offices in the DIFC
14/04/2009 Family businesses are dominant in the Middle East and are the key to long-term economic development, job creation and prosperity. The new Family Office Initiative in the Dubai International Financial Centre will help families to overcome challenges, manage their wealth and plan the succession of their business.
Austria
New Rules Governing Share Registers Introduced
01/09/2009 The Stock Corporation Amendment Act 2009 has not only brought about important changes to the provisions governing the shareholders' meetings of Austrian stock corporations, but also introduced new rules governing share registers, which must be kept by all stock corporations that have issued registered shares. The new act introduces a procedure that allows a company to seek the deletion of an entry in the share register.
New Act Facilitates Foreign Shareholder Participation in Shareholders' Meetings
03/08/2009 The EU Shareholder Rights Directive was recently implemented into Austrian law by the Stock Corporation Amendment Act 2009. The act introduces new rules that are applicable to Austrian listed corporations. The rules are aimed at facilitating (foreign) shareholder participation and voting in shareholders' meetings, and thus increasing free float shareholder participations.
Supreme Court Rules on Automatic Accession of Shareholders
08/06/2009 In a recent case before the Supreme Court a provision in a limited liability company's articles of association was disputed. The provision set forth that in case of the opening of insolvency proceedings or the initiation of an enforcement action against a shareholder, such shareholder would automatically cease to be a shareholder and its share would transfer to the co-shareholder(s) by way of automatic accession.
Supreme Court Rules in Golden Handshake Case
09/03/2009 In a recent decision the Supreme Court had to deal with the issue of whether two golden handshakes, which had been handed out to (former) members of a listed company's management board to achieve an early termination of their management contracts, were unjustifiably high.
Pakistan
Revised Ordinance Makes Companies More Accountable
15/06/2009 Certain key amendments that were brought into effect by the provisions of the Finance Act 2008 continue to affect commercial activity in Pakistan. The main aim of the amendments to the Companies Ordinance 1984 seems to be to enhance the Securities and Exchange Commission's powers and to make companies more accountable to it.
Sweden
Supreme Court Rules on Personal Liability of Boards of Directors
14/09/2009 In a recent ruling in which the Supreme Court clarified the position regarding personal liability of board members, the court had to answer the question of who should bear the burden of proof for the existence or absence of a 'reason to believe' that the shareholders' equity was less than one-half of the registered share capital.
Committee Reconsiders Nordic Reservation to Part II of CISG
22/06/2009 When Sweden adopted the UN Convention on Contracts for the International Sales of Goods, it made a reservation - along with the other Nordic countries except Iceland - not to be bound by Part II (ie, the part that deals with the formation of contracts). Under pressure from businesses, the Nordic Committee of Senior Officials for Legislative Affairs recently assigned Swedish Professor Jan Kleineman to report on the issue.
USA
Court Converts Voting Preferred Stock into Non-voting Common Stock
19/01/2009 In a recent decision the Delaware Chancery Court fashioned an extraordinary remedy by converting the convertible preferred stock issued by Loral Space and Communications Inc to its controlling stockholder into non-voting common stock based upon a court-determined 'fair price' for Loral common stock.
Guernsey
Guernsey to Introduce Limited Liability Partnerships
29/06/2009 A proposal to introduce limited liability partnerships (LLPs) into Guernsey law has been approved by the government. Guernsey's LLP regime will bear some similarities to that of the United Kingdom. Although their use will not be limited in scope, it is expected that the LLPs will mostly appeal to practitioners in professional firms who currently work within a general partnership.
Audit Requirements for Guernsey Companies
05/05/2009 The entry into force of the Companies Law 2008 brought a significant change to the types of company that still require a statutory audit. It also introduced a different process for adopting the extended exemptions from audit now allowed. While the number of companies that can qualify for audit exemption has increased, the potential for missing critical filing deadlines has grown.
Albania
New Rules on Licensing of Business Activities
01/09/2009 Parliament and the Council of Ministers recently introduced a new regime for the licensing procedures of specific activities by adopting some important legislative initiatives. The general principle established by the new licensing law is that business activities in Albania may be freely conducted and are not subject to licensing, authorization or permits, unless required by applicable law.
New Law on Auditing and Organizing of Auditors and Certified Accountants
15/06/2009 The Law on Statutory Auditing and Organization of Registered Chartered Auditors and Approved Accountants governs the organization and activity of registered chartered auditors and approved accountants. This update looks at the requirements of the new law.
New National Licensing Centre
27/04/2009 The National Licensing Centre is a new public entity with its head office in Tirana. The centre will support the Ministry of Economy, Trade and Energy in preparing the normative and institutional framework of a one-stop system for issuing and managing professional licences and permits.
Electronic Communication Now Possible in the Decision-Making Process
09/03/2009 Law 9901 on Entrepreneurs and Commercial Enterprises enhances shareholder participation in company decision making. This is reflected in the possibility for companies to use electronic notification, electronic participation and electronic voting in shareholders' meetings.
Cyprus
New Amendments Regarding Corporate Seals
28/09/2009 It is a long-established rule that a Cypriot company must have a corporate seal, which must be kept at the company's registered office under the custody of the company secretary as directed by the board of directors. Recent amendments to the Company Law have clarified the position on corporate seals.
Implementation of EU Statutory Audit Directive
13/07/2009 After some delay, Cyprus has implemented the EU Statutory Audit Directive through its enactment of the Law on the Obligatory Audit of Annual and Consolidated Accounts by Legally Registered Accountants and Audit Firms. The new law introduces statutory requirements for the audit profession and a public oversight system for regulating auditors and audit firms and clarifying their duties in line with the EU directive.
Establishing a Branch in Cyprus
23/02/2009 A company incorporated outside Cyprus may establish a branch or representative office in Cyprus, provided that within one month of the establishment date it registers itself as an overseas company with the registrar of companies. Overseas companies intending to establish a branch in Cyprus are subject to certain regulatory filing requirements.
Germany
Upstream Loans and Cash Pooling: New Risks for Directors
27/04/2009 A recent ruling of the Federal Court of Justice has better defined the new legal regime for upstream loans and cash pooling under German company law. However, although it brings good news for shareholders, it also means increased risks for directors of German companies.
Ireland
Corporate Killing – a Summary
19/01/2009 The larger a company, the greater the number of deaths that are likely to occur should its operational systems fail or safety policies prove inadequate. However, under current legislation it is extremely difficult to identify an individual director or board member with the required degree of control over a large corporate entity to charge with corporate manslaughter.
Russia
Amended Law on Joint Stock Companies Introduces Shareholders' Agreements
29/06/2009 The Federal Law Amending the Law on Joint Stock Companies gives shareholders' agreements a basis in Russian legislation. The innovation will be welcomed by businesses and by legal practitioners, who have long argued for the formal introduction of such agreements in order to strengthen the legal foundations of joint stock companies and improve their corporate governance.
Switzerland
Revision of Joint Stock Company and Accounting Legislation
10/08/2009 In light of the global financial crisis, the federal government has extended the revision of the law on corporations and new accounting legislation that will create standardized rules for all company forms in Switzerland. It has also issued an additional opinion as a counter-proposal to a popular initiative submitted in 2008.
Compensation upon Termination of Distributorship Agreements
08/06/2009 In a recent landmark ruling the Supreme Court deviated from its previous practice to hold that, in certain circumstances, exclusive distributors have a claim for mandatory compensation upon termination of the distributorship agreement. The court further held that the distributor's claim for client compensation is mandatory and cannot be waived in the distributorship agreement.
Delegation of Management by Board of Directors
05/01/2009 In two recent decisions the Supreme Court took the opportunity to lay down the minimum standards for an authorized delegation of management competency from the board of directors to individual board members or a third person. Board members in Switzerland may now want to take appropriate steps to ensure that they have correctly delegated the management of their company.
Argentina
Trade Secrets Protection
01/09/2009 Trade secrets or confidential information regimes grant protection to valuable secret commercial information from misappropriation by third parties. Such regimes constitute an adaptive discipline seeking to respond to increasing employee mobility, changing technology and rising entrepreneurial activity. In Argentina, trade secrets are protected by Section 156 of the Penal Code and the Confidentiality Law.
Aruba
Parliament Approves New Form of Limited Liability Company
06/04/2009 In 2006 the Aruban government presented its plan for a form of Aruban limited liability company, known as a vennootschap met beperkte aansprakelijkheid. Parliament has now finally approved legislation on the new corporate entity. Simple and flexible, it promises to be particularly useful for tax planning.
Belgium
The 2009 Corporate Governance Code: A Welcome Update
28/09/2009 The 2009 Corporate Governance Code was issued against the background of the financial crisis and applies to all companies incorporated in Belgium whose shares are admitted to trading on a regulated market. The main amendments to the first edition relate to executive remuneration, the board of directors' monitoring role and the roles of chairman of the board of directors and chief executive officer.
Publication Formalities for Belgian Branches of Foreign Companies
21/09/2009 A foreign company that opens a Belgian branch office must comply with certain publication formalities. However, all too often companies fail to comply with these requirements and complete the process correctly. This update considers the requirements to submit annual and consolidated accounts and to publish information in the Official Gazette
New Rules on Filing Annual Accounts Online
14/09/2009 Most companies in which the liability of the shareholders or members is limited to their contribution must file accounts with the National Bank of Belgium online. Failure to do so on time results in an automatic fine. Moreover, a presumption of joint and several liability applies to all directors and damage suffered by third parties will be held to be the result of non-compliance unless the company can prove otherwise.
Audit Committee Requirements for Listed Companies and Financial Undertakings
27/07/2009 By introducing a new law on audit committees, the government has sought to reinforce the quality of financial reporting. Most large Belgian companies already have an audit committee, but all such companies should review the new criteria, particularly the rule that independent directors may not have had significant business relationships with the company.
Effect of EU Unfair Commercial Practices Directive on Commercial Practices Act
13/07/2009 The Brussels Court of Appeal recently ruled on a private sale held by the INNO department stores in the black-out period which precedes the two annual sales periods, during which no price reductions can be announced or suggested. It held that these black-out periods fall outside the scope of the EU Unfair Commercial Practices Directive.
New Rules on Contributions in Kind and Share Buy-Backs
06/07/2009 Royal Decree 10/2008, implementing EU Directive 2006/68/EC, has come into force, substantially modifying the Belgian Companies Code in respect of contributions in kind, purchase of own shares and financial assistance. The decree applies to all forms of limited liability company and simplifies the procedure for contributions in kind.
India
Ministry of Corporate Affairs Urges Recognition of LLPs
12/10/2009 According to recent reports in the Economic Times, pursuant to the registration of more than 100 entities under the Limited Liability Partnership (LLP) Act 2008, the Ministry of Corporate Affairs wants LLPs to be recognized by other ministries, state governments and sectoral regulators.
General Meeting Regulations: Are Private Companies Free Not to Comply?
07/09/2009 The Companies Act provides some flexibility to private companies with regard to compliance with its provisions concerning general meeting regulations. For example, it provides that the general meeting regulations contained in Sections 171 to 186 will apply to private companies that are not subsidiaries of a public company, unless the act or the company's articles of association provide otherwise.
The Companies Bill 2008: An Analysis
06/07/2009 The long awaited re-codification of Indian company law has begun to take shape through the government's recent introduction to Parliament of the Companies Bill 2008 and the referral of the same to the Select Committee. The bill seeks to establish a new benchmark for corporate governance in comparison to the existing framework under the Companies Act 1956.
Issue and Redemption of Preference Shares
15/06/2009 A company cannot be formed with only preference capital, as preference shares do not carry voting rights except in certain circumstances. Voting rights form the basis for corporate actions, particularly in respect of matters placed before general meetings. As the name suggests, preference shares carry preferential rights in relation to other classes of share.
Enhancing the Role of Independent Directors
02/03/2009 Independent directors are appointed to a board of directors in order to provide objectivity for board decisions. The new Companies Bill 2008 reproduces and reaffirms the concept of independent directors, with certain modifications - for example, it seeks to harmonize governance norms and bring listed companies under the jurisdiction of the act.
Benefit of a Single Point Clearance Committee for Foreign Investors
16/02/2009 In light of the current global market, it is hoped that foreign businesses will continue to invest in India in order to marginalize their losses in other slowing economies. However, India also has a dubious distinction when it comes to corruption. This issue may be resolved by reducing the exposure of foreign entities to government departments and officials by providing a one-stop clearance window.
Isle of Man
New Directors' Disqualification Regime Takes Effect
22/06/2009 A significant new directors' disqualification regime has come into force. The Company Officers (Disqualification) Act 2009 has replaced much of the previous statutory provision, in particular Section 26 of the Companies Act 1992. It will be interesting to see what impact the new law has on the number of judicial disqualification orders that will be made in future.
Competition
Argentina
A 'Beyond the Borders' Interpretation of the Antitrust Law
04/06/2009 The National Commission for the Defence of Competition recently unveiled a new interpretation of the applicable exemptions to the mandatory notification procedure set out by the Antitrust Law. According to a new advisory opinion issued by the commission, in certain cases the global value of the transaction, as well as the value of the assets that are being transferred, should be taken into account.
Antitrust Commission Clears Major Deal in Retail Industry
26/03/2009 The National Commission for the Defence of Competition recently authorized an important transaction in the retail industry involving two of the largest supermarket and hypermarket chains in Argentina. The authorization is significant because it involved an in-depth analysis of the definition of relevant markets for the retail and product supplier sectors.
Antitrust Commission Rejects Cartel Accusation
15/01/2009 The National Commission for the Defence of Competition recently rejected an accusation initiated by a distributor of liquid gas against a producer of liquid gas alleging infringement of the Antitrust Law. The distributor claimed that the producer had exercised its dominant position in order to prevent the distributor from buying liquid gas from other companies.
France
Bidders Must Maintain Autonomy with Respect to Project Contractors
29/10/2009 Following convictions for exchanges of information prior to several competitive tender invitations, the Competition Authority took the opportunity to define the obligations of undertakings bidding in a permeable market. In the authority's view, such exchanges of information between competing undertakings present a threat to competition.
Access and Content Exclusivity in Pay-Television Market under Scrutiny
20/08/2009 The Competition Authority has rendered an eagerly awaited opinion on exclusivity relationships between electronic communications operators and distributors of contents and services. The minister of the economy asked whether exclusive rights acquired by some internet service providers were not likely to capture other operators' customers, thus distorting competition on the downstream market.
Unfairly Obtained Evidence: Court of Appeal Digs Its Heels In
11/06/2009 There has been a new development concerning the admissibility of unfairly obtained evidence. In a case involving the secret recording of telephone conversations in support of a claim of price fixing, the Paris Court of Appeal accepted this evidence but the Court of Cassation did not, claiming that evidence must be obtained fairly. However, the court of appeal legitimized its approach in light of the specificity of competition cases.
Competition Law: Commercial Weapon of Choice in Times of Crisis
09/04/2009 According to a recent survey of the French legal services market, 65% of law firms active in the business law market have reported feeling the effects of the economic crisis. However, competition law is a powerful tactical and strategic weapon, which - more so in times of crisis than any other - helps to ensure the success of a company's commercial objectives.
Paris Court of Appeal Confirms Competition Council's iPhone Decision
05/03/2009 In a recent judgment the Paris Court of Appeal has confirmed the decision by which the Competition Council had, in an application for interim measures, ordered the suspension of the exclusive right conferred by Apple on Orange for the distribution of the iPhone in France as network operator and exclusive wholesaler.
Israel
Antitrust Commissioner Applies 'Illegal Per-Se' Approach to Information Exchanges
30/07/2009 The antitrust commissioner recently made a declaratory decision pursuant to Section 43(a)(1) of the Antitrust Law, according to which information exchanges concerning fees that were allegedly held between five major banks in Israel constituted an illegal restrictive arrangement. The decision seems to apply an 'illegal per-se' approach to information exchanges made in oligopolistic markets.
Potential Competition and Merger Control in the Telecommunications Market
30/04/2009 Mergers that meet certain threshold requirements are subject to a mandatory pre-notification process and require approval from the antitrust commissioner. In 2006 the commissioner blocked a transaction planned by Israel's leading telecommunications firm on account of it eliminating a potential source of competition in the market. The Antitrust Court recently overturned this decision.
Should Sensitive Data Collected by the Antitrust Authority be Exposed?
26/02/2009 The antitrust commissioner has the power to request any information that it deems necessary for the proper implementation of the Antitrust Law. A recent decision gives important guidance on the application of the Freedom of Information Act to sensitive business data submitted by firms to the Antitrust Authority through notification forms, responses to data requests or voluntary submissions.
Lithuania
Overview (October 2009)
29/10/2009 Including: Legislation and Jurisdiction; Notification and Clearance; Substantive Assessment; Remedies and Restraints; Involvement of Other Parties or Authorities; Judicial Review; Recent Enforcement Record.
Seimas Enacts Amendments to Competition Law
11/06/2009 The Seimas has adopted amendments to the Competition Law which expand the powers of the Competition Council to allow it to seal the premises of an undertaking where documents are kept during an investigation and to impose liability for damaging such a seal. In addition, the council will be allowed to enter and inspect private premises for the purposes of competition investigations.
Competition Authority Seeks Greater Power over Regulated Markets
28/05/2009 The Competition Authority has found that an energy company abused its dominant position by charging unfair prices. However, it based its findings solely on the fact that the company's prices did not correspond to the relevant regulator's pricing methodology. If the courts uphold this position, it will affect all undertakings in regulated markets, including the telecommunications, gas and electricity sectors.
Recovering Damages for Competition Council Ruling
21/05/2009 Following the judicial review of a Competition Council ruling on dominant position, the company in question brought a claim for compensation. However, the court ruled that the mere recognition that a state authority's decision was legally unsound is insufficient grounds for bringing a damages claim. Rather, such a finding depends on a state authority having committed procedural infringements.
Australia
Extraterritorial Activity within Reach of ACCC Information-Gathering Powers
30/04/2009 The Federal Court has dismissed applications by Emirates and Singapore Airlines challenging the validity of Section 155 notices issued by the Australian Competition and Consumer Commission for the purpose of compulsorily obtaining information and documents relating to an alleged international air cargo cartel.
Overview (April 2009)
09/04/2009 Including: Changes in Merger Review; Changes to Misuse of Market Power Prohibition; Criminalizing Cartel Conduct; Creeping Acquisitions; Unit Pricing Code; Meaning of 'Understanding' in Section 45.
Cyprus
Changes to Competition Law to Combat Cartels
22/10/2009 Cartels are considered to be the most serious form of competition law violation, against which regulatory authorities across the world have been waging hostile campaigns. However, adopting competition laws with tough penalties has not been sufficient to suppress cartel activity. This update discusses the changes that have been made to competition law in Cyprus in order to combat cartels.
Turkey
Competition Authority Issues New Guidelines on Vertical Agreements
08/10/2009 Since the Law on the Protection of Competition came into force in 1994, there has been concern that the competition law regime lacks secondary legislation. However, over the past two years the Competition Authority has attempted to address this problem by issuing back-to-back regulations and guidelines. Its latest piece of legislation is the extended version of the Guidelines on Vertical Agreements.
Competition Board Fines Leading Flat Steel Producers
09/07/2009 The Competition Board has finalized its investigation into the Turkish flat steel market. As a result of its investigation, the board has fined three leading flat steel producers. The fine was based on the fact that the existing shareholding structures of two of the undertakings enabled them to conduct coordinated market behaviour in the flat steel market.
Regulations Providing Details of Leniency Programme and Monetary Fines Enacted
30/04/2009 Recent amendments to the Law on the Protection of Competition introduced a stricter fining regime, together with a leniency and immunity programme for infringing companies. Steps are now being taken to implement this new and revised legislation.
Board Reconfirms Transfer of Turnover-Generating Trademark as an Acquisition
12/02/2009 The Competition Board does not limit the scope of acquisitions involving straightforward share transfers. Instead, it defines transactions involving the acquisition of assets as the "acquisition or control by an entity or a person of another undertaking’s assets or a part or all of its shares or instruments granting it management rights".
United Kingdom
Court Reverses Tribunal Decision on Whether Damages Action is Time-Barred
02/07/2009 A recent judgment of the Court of Appeal provides clarification of the statutory provisions relating to the still relatively infrequently used right to bring follow-on damages actions under Section 47A of the Competition Act 1998. The dispute derived from a European Commission infringement decision regarding a price-fixing cartel in relation to the sale of vitamins for use in animal feedstuffs.
Impact of the 2009 Budget on Competition Law and Regulation
14/05/2009 A number of the reforms included in the recent Budget Report 2009 have a potential impact on competition law and regulation. For example, in order to lower energy prices and encourage competition across the entire sector, the government is proposing a number of reforms.
OFT and Competition Commission Publish Report on Merger Decisions
09/04/2009 The Competition Commission and the Office of Fair Trading have published a review of merger decisions under the Enterprise Act 2002. The report provides the first methodical examination of the act's implementation regarding merger decisions. It concludes that the decision-making process has generally been sound, but that certain concerns may need to be addressed when revising merger guidelines.
OFT and Competition Commission: Reviewing Undertakings and Orders
05/03/2009 The Office of Fair Trading and the Competition Commission have published a memorandum of understanding outlining their working practice for the review of merger, monopoly and market undertakings and orders. It sets out a transparent framework for every stage of the review of undertakings and orders, thereby giving parties subject to such remedies a clearer point of reference for the processes involved.
Court of Appeal Rules against Competition Appeal Tribunal in Floe Telecom
05/03/2009 After much debate as to whether it should hear the case, the Court of Appeal has ruled in favour of the Office of Communications (OFCOM) and T-Mobile in relation to an appeal against an order of the Competition Appeal Tribunal. The tribunal had upheld OFCOM's overall non-infringement decision; however, it had also taken the unusual step of setting aside parts of the decision.
Administrative Court Rules in OFT's Favour on Case Closure
05/02/2009 Following an application for judicial review, the Administrative Court has ruled that the Office of Fair Trading (OFT) acted reasonably in closing a Competition Act investigation. This is the first time that the Administrative Court has ruled on the OFT's discretion to close a case on administrative priority grounds.
Belgium
Court's Limited Power to Annul Competition Law Rulings by Arbitral Panel
22/10/2009 The Brussels Court of Appeal has ruled that it is competent to review an arbitral decision if the decision threatens public order - for example, on a question relating to Articles 81 and 82 of the EC Treaty. However, it cannot review a decision by an arbitration panel which relates merely to an award of damages between parties to an agreement that has been declared void for infringing EU competition law.
Courts Not Required to Apply Article 81(3) if Parties Fail to Invoke It
10/09/2009 The Supreme Court has ruled that the Belgian courts can find - on the basis of Article 81(2) of the EC Treaty - that clauses imposing an exclusive purchase obligation of more than five years are void without having to invoke an individual exemption under Article 81(3) on their own initiative. The decision calls into question the public policy nature of Article 81(3).
Public Prosecutor and Competition Council at Odds over Joint Venture Clearance
03/09/2009 The Competition Council found that a joint venture by two firms in the highly concentrated tourism coach transport market did not restrict competition. This case is significant because the public prosecutor and the council took opposing views of the merits of the case. It is also the first time that the prosecutor has taken ex officio action against an agreement notified for clearance to the Competition Authority.
Competition Council imposes highest-ever fine on mobile operator Proximus
02/07/2009 The Competition Council has fined mobile operator Proximus €66.3 million for abuse of a dominant position. The fine amounted to 15% of the sales made by Proximus in the relevant market sector during 2005 (€340 million), increased by 30% because the behaviour was proven to have continued over two years.
Competition Act Amendments: Greater Scope for Policy Decisions in Investigations
11/06/2009 Among the largely procedural amendments to the Competition Act, the clarification of the prescription rules and the option of dismissing cases on policy grounds have caught the eye of competition lawyers. Previously, every complaint or request had to be investigated; the Competition Council could halt only the investigations that it launched on its own initiative. The change should cut the number of pending but inactive cases.
Dominant Pharmaceutical Companies Can Refuse to Sell to Pure Exporters
21/05/2009 The competition authorities recently addressed refusal to supply by dominant pharmaceutical companies when dismissing an appeal by Bofar, an exporter of pharmaceutical products. As Bofar is not entitled to supply in Belgium, the Competition Council ruled that pharmaceutical companies can protect their commercial interests without abusing their dominant position.
Canada
Competition Bureau Publishes Final Merger Review Process Guidelines
22/10/2009 The Competition Bureau has published its final Merger Review Process Guidelines, describing the bureau's approach to Canada's new two-stage merger review process adopted following the March 2009 amendments to the Competition Act. The guidelines express a commitment to minimizing the burden of supplementary information requests on merging parties and stress that the preferred approach is cooperation.
Competition Tribunal Issues Key Ruling on Refusal to Deal
27/08/2009 The Competition Tribunal has dismissed an application which would have forced the largest chicken producer in New Brunswick and two smaller producers to continue selling their entire production of live chickens to the applicant, despite there being no contract of supply between the parties. The ruling afforded the tribunal an opportunity to clarify the scope of Section 75 of the Competition Act, which deals with refusal to deal.
New Two-Stage Merger Review Process Begins to Take Shape
25/06/2009 Canada has adopted a two-stage merger review process following amendments to the Competition Act contained in the recent federal budget. The amendments created a single form of pre-merger notification with a single, 30-day initial waiting period. The commissioner of competition also gained the power to issue requests for supplementary information within that initial 30-day period.
Substantial Changes Made to Competition Act - Businesses Must React
19/03/2009 After being expeditiously passed by both houses of Parliament, Bill C-10 has received royal assent and is now law. In light of this development, businesses are recommended to undertake a number of actions, including reviewing and appropriately revising their pricing policies in light of the decriminalization of price discrimination, predatory pricing, discriminatory promotional allowances and resale price maintenance.
Dramatic Changes to Competition Laws Proposed
12/02/2009 Prime Minister Stephen Harper’s Conservative government has followed through with its pre-election promises to amend Canada’s competition and foreign investment laws. The changes to the Competition Act envisaged by Bill C-10 are the most significant changes to the statute in decades.
Estonia
State-Owned Electricity Monopoly Fined for Abuse of Dominant Position
10/09/2009 The Competition Board recently fined Narva Elektrijaamad AS, a subsidiary of the state-owned electricity monopoly Eesti Energia, Ekr250,000 for an abuse of its dominant position. This is one of the biggest fines to be imposed in the board's history, confirming that the board is taking serious action against dominant companies that abuse their dominant position.
Investigations into Water Companies Initiated
28/05/2009 The Competition Board has initiated investigations into the local water supply and wastewater discharge services market in order to verify its compliance with competition laws. The main reason behind the investigations is the dramatic increase in the prices charged for water supply and wastewater discharge services in Estonia over the last three years.
Draft Leniency Programme Prepared
05/03/2009 The Ministry of Justice has drafted amendments to the Penal Code, the Code of Criminal Procedure and the Competition Act regarding the introduction of a leniency programme designed to assist in the battle against cartels. The amendments were presented to the public at the beginning of 2009.
European Union
European Commission Imposes €20 Million Fine for Failure to File Transaction
27/08/2009 The European Commission has imposed a fine of €20 million on a company which infringed its obligation to file a transaction prior to implementation, despite no competition concerns having been raised by the transaction. Given the recent tendency of competition authorities to impose ever-increasing fines for procedural breaches, companies should be careful when examining their filing duties under EU regulations.
European Commission Imposes Highest Ever Competition Fine
18/06/2009 The European Commission has imposed a fine of €1.06 billion on Intel for allegedly abusing its dominant position (under Article 82 of the EC Treaty) on the worldwide market for x86 central processing unit computer chips from October 2002 to December 2007. The fine is the highest ever imposed on one company for infringement of the EC competition rules.
Commission Plans Private Antitrust Enforcement Directive
11/06/2009 It has recently become known that the European Commission is to propose a directive on rules governing damages actions for infringements of Articles 81 and 82 of the EC Treaty. The proposed directive seeks to promote private antitrust actions and would require EU member states to introduce various new measures into their national laws.
Advocate General Renders Opinion on Schneider/Legrand Merger
26/03/2009 The advocate general at the European Court of Justice has proposed to set aside in part the recent European Court of First Instance decision to award Schneider Electric damages resulting from the European Commission's illegal prohibition of its merger with Legrand. The opinion will have a significant impact on future cases which revisit the consequences of the commission's unlawful prohibition of mergers.
Finland
Supreme Court Hits Asphalt Cartel with Record Fines
22/10/2009 The Supreme Administrative Court has ruled on the largest cartel case ever to be tried in Finland, finding that asphalt companies had participated in a cartel. The court dismissed the asphalt companies' appeal of the Market Court's 2007 decision and approved, to a significant extent, a counter-appeal by the Competition Authority. The court imposed fines totalling €82.5 million across the industry.
Competition Restrictions Regulations to be Overhauled
30/07/2009 A working group under the Ministry of Employment and the Economy has published its long-awaited proposal for a comprehensive reform of the Act on Competition Restrictions. The proposed amendments will in many respects clarify the current applicable legislation and further harmonize the national competition rules with the EU competition law regime.
Market Court Imposes Fines for Abuse of Dominant Position
07/05/2009 The Market Court has imposed a competition infringement fine in the amount of €100,000 on Suomen Numeropalvelut Oy for the abuse of a dominant position in relation to the sale of subscriber information for the production of telephone directories. The decision follows the Competition Authority's proposal to the court to impose a competition infringement fine of €150,000 on Suomen Numeropalvelut.
FCA Clears Media Merger Subject to Conditions
26/02/2009 The Finnish Competition Authority (FCA) has cleared, subject to conditions, a concentration whereby Swedish media group Bonnier, through TV4 AB, acquired sole control of another Swedish media company, C More Group AB. The FCA has accepted a number of behavioural and structural conditions on the concentration and the acquirer has appealed.
Latvia
Competition Law Amended Again – New Notification Threshold
06/08/2009 Recent amendments to the Competition Law contain an obligation to notify a merger if the combined turnover of the parties involved exceeds Lats25 million, or the combined market share of the parties in the relevant market exceeds 40%, unless the turnover of one of the parties to the merger is less than Lats1.5 million for the previous financial year.
Application of EU Law by Competition Council
11/06/2009 Since Latvia joined the European Union in 2004 the Competition Council has adopted six decisions involving the application of Articles 81 and 82 of the EC Treaty. The council has found violations of the treaty in only two of these decisons - one involving Riga International Airport, and the other the Association of Latvian Architects.
Freeport of Riga Authority Abused Dominant Position
23/04/2009 The Competition Council has ruled that the Freeport of Riga Authority abused its dominant position by denying the company PKL permission to provide towboat serivces within the port. It also ordered the authority to introduce transparent and objective requirements for the provision of towboat services, and ordered the authority to divest from its operations of towboat services within a one-month period.
Competition Council Publishes Performance Report
05/03/2009 The Competition Council's report on its activities in 2008 indicates that the council was keener to investigate and deliver decisions on antirust cases in 2008, whereas in 2007 the council spent more time scrutinizing merger applications. It is predicted that 2009 will see even more antitrust investigations, since more undertakings may be tempted to collude in order to survive contractions in the markets.
Mexico
Leniency for cartel participants under Federal Competition Law
01/10/2009 The Federal Competition Law and its regulations make provision for reductions in fines for cartel participants that come forward with information about such practices. The commission has indicated that it may fine a cartel participant the equivalent of the daily minimum wage - a negligible amount, given that the commission has the authority to impose a fine of up to 1.5 million times this amount.
Proposed Amendments to Federal Law of Economic Competition
21/05/2009 The public and private sectors have expressed their desire to increase competition in the Mexican economy. In order to do so, the powers of the Federal Competition Commission need to be strengthened. Therefore, Senator Santiago Creel has presented a proposal to amend the Federal Law of Economic Competition.
Simplified and Full Merger Notification Filings: Providing the Right Information
05/03/2009 Parties that are required to submit a full pre-merger filing to the Federal Competition Commission should try to provide all the information that the commission requires in their initial submission, as the review period does not begin to run until the commission's file is complete. In practice, this means carrying out a detailed analysis of the information to be submitted.
New Filing Thresholds and Fees
05/02/2009 Mexico's competition filing thresholds and the filing fees payable to the Federal Competition Commission are determined according to the Federal Competition Law and the Federal Law on Government Rights, respectively. These figures have now been updated for 2009.
Corporate Restructuring: An Exception to Pre-merger Filing Rules
15/01/2009 The Federal Competition Law provides that pre-merger filings are required if a transaction meets any of three monetary thresholds. However, certain exceptions apply to so-called 'risk-free' transactions, for which a post-closing notice is sufficient. One such exception applies to corporate reorganizations that meet certain requirements.
Waiting Periods and Stop Orders in Pre-merger Filings
08/01/2009 The Federal Competition Law imposes a waiting period of 10 business days on all transactions that are subject to pre-merger filing. During this period the Federal Competition Commission can issue a stop order to prevent the closure of the transaction, and usually does so if the parties’ activities overlap, regardless of whether this results in anti-competitive effects in the relevant market.
Poland
Competition Authority Assesses PKP Cargo's Business Strategy
10/09/2009 Following antitrust investigations against incumbent railway carrier PKP Cargo, in July 2009 the Competition Authority issued two important decisions: one in which it found no anti-competitive practice, and the other by which it fined PKP Cargo PLN60 million for an alleged illegal practice. Both proceedings were started as a result of complaints lodged by PKP Cargo customers, one of which also competes with it.
Changes to Leniency Regulation
09/04/2009 The new Leniency Regulation, which sets forth procedural rules for the submission of leniency applications, recently entered into force. The adoption of the regulation coincides with the issuance of the first-ever Competition Authority leniency guidelines, which are intended to raise awareness of leniency and inform potential candidates of their duties and rights under the programme.
Competition Authority Adopts Guidelines on Fines
29/01/2009 The Competition Authority has adopted its first official guidelines on setting fines for competition-restricting practices. The basic purpose of the guidelines is to enhance the transparency of fining policies and thus allow companies further insight into the financial penalties that they may face for breach of competition rules.
Romania
State of the Nation: Competition Council Report Examines Key Sectors
29/10/2009 The Competition Council and an independent think tank have prepared a report that examines seven key sectors of the economy: banking, food retail, public procurement, energy, pharmaceuticals, professional services and taxi services. It highlights factors that may affect the functioning of the national markets and offers guidance on a number of practices that are encountered or envisaged on such markets.
Constitutional Court Strikes Down Time Limit for Challenges to Council Regulations
01/10/2009 The Constitutional Court has ruled unconstitutional the provisions in Article 28(2) of the Competition Law on the right to challenge regulations issued by the Competition Council before the administrative courts. It held that requiring parties to challenge regulations within 30 days of notification or publication contravenes constitutional provisions on free access to justice and judicial control over administrative acts.
The Wrigley Romania Case: Lessons on Price Fixing and Market Partitioning
14/05/2009 The investigation of Wrigley Romania and 26 of its distributors for alleged fixing of resale prices and market partitioning ultimately reached the Supreme Court. The case provided greater legal certainty on the issues of a supplier's alleged abuse of dominant position and the significance of documentary evidence of a supplier's anti-competitive practice where there is no proof of acceptance by its trading partners.
USA
FTC Commissioners Issue Duelling Statements over Cancelled Merger
29/10/2009 In response to an announcement by Endocare, Inc terminating its proposed merger with Galil, Ltd because of delays in the Federal Trade Commission (FTC) review of the transaction, several FTC commissioners have taken the unprecedented step of issuing contrary statements on the causes for the delayed review.
FTC Releases Reports on Authorized Generics and Follow-on Biologics
29/10/2009 Highlighting its continued focus on drug competition, the Federal Trade Commission recently released two significant reports relating to competition in the life sciences industry. The first dealt with the state of competition in the area of follow-on biologics, while the second examined the effects of authorized generics on competition at the request of three senators.
CSL Scraps Talecris Acquisition in Response to FTC Complaint
01/10/2009 Facing a Federal Trade Commission (FTC) complaint alleging that their proposed combination violated federal antitrust laws, CSL Limited and Talecris Biotherapeutics Holdings Corporation have announced that they have mutually agreed to terminate their merger agreement. The FTC had alleged that the merger would violate the Clayton Act and the Federal Trade Commission Act.
FTC Is Given Go-Ahead in Suit against Ovation
24/09/2009 A district court judge has denied motions for summary judgment filed by Lundbeck, Inc, formerly Ovation Pharmaceuticals, Inc. The Federal Trade Commission and the Minnesota attorney general brought suit against Ovation seeking divestiture and disgorgement of profits for alleged price-gouging in relation to Ovation's acquisition of NeoProfen.
Enforcement Agencies Stand United against Reverse Payment Patent Settlements
17/09/2009 Under the previous administration, the Federal Trade Commission's (FTC) pursuit of antitrust challenges to patent settlements with so-called 'reverse payments' ran into two major hurdles. However, under the Obama administration, recent activity indicates that the Department of Justice has cleared the second hurdle from the FTC's path, and the FTC is continuing to mount an aggressive push to clear the first.
Antitrust Challenges to Petitions Required to Demonstrate Delay of ANDA Approval
10/09/2009 In two recent cases involving antitrust claims against branded manufacturers, the plaintiffs alleged that each branded manufacturer filed a frivolous citizen petition with the US Food and Drug Administration (FDA), which delayed FDA approval of generic products. In each case, a threshold question was whether the plaintiff could even show that the citizen petition actually delayed the Abbreviated New Drug Application approval.
Hungary
Competition Office Blocks Telecommunications Merger
15/10/2009 The Competition Office has refused to clear the planned acquisition by Magyar Telekom Nyrt, the Deutsche Telekom-owned incumbent, of regional competitor Vidanet Zrt. It found that the planned transaction was likely to result in the creation of a dominant position that would hinder the development of effective competition in all horizontally affected markets.
Revised Competition Act Incorporates Updated Leniency Policy
30/07/2009 Until recently, the Competition Office's leniency policy was not represented in legislation. The revised Competition Act incorporates the most important features of the leniency regime and amends the previous policy in light of the European Competition Network's model leniency programme. Explanatory notes offer a guide to the practical implementation and application of the revised rules.
Amendments to Competition Act Update Merger Control and Cartel Provisions
02/07/2009 Parliament has amended the Competition Act to harmonize the act's merger rules with EU competition law principles and facilitate private enforcement claims in antitrust cases. A significant amendment to the cartel regime is the introduction of an automatic presumption that unless otherwise proved, horizontal price fixing or market-sharing arrangements are deemed to result in a 10% increase in contract prices.
Turnover Calculations under Hungarian and EU Rules
23/04/2009 Hungary's competition rules are almost identical to the EU regime. However, there is a crucial difference in the turnover correction rules: the Hungarian rule disregards all sales among all affected undertakings, but the EU Merger Regulation excludes only the sales among the affected undertakings within the same affected group. This can lead to surprising outcomes in multinational merger transactions.
Heavy Fines for Motorway Construction Cartel
26/02/2009 The Competition Office has imposed fines totalling around €10 million on the Hungarian subsidiaries of construction companies Strabag and Colas for participating in bid-rigging and market-sharing arrangements over a number of years. The investigation was triggered by a leniency application by another construction company, He-Do Kft, which was granted immunity in return for its cooperation.
Portugal
Assessing Market Share: Divergent Data Leaves Drinks Companies Over the Limit
10/09/2009 Portugal is one of the few EU member states that still uses the market share criterion to determine whether a merger notification is required. However, market definition is not an exact science. A notification submitted by the drinks company Schweppes illustrates the difficulties involved, especially when different research and data management companies provide contradictory information.
Competition Authority Report on Fuel Sector: Continued Scrutiny for Industry
23/07/2009 The Competition Authority has found no evidence that significant fuel price increases and variations in 2008 involved business conduct that contravened competition law. However, it has indicated serious structural barriers to the functioning of the fuel sector and its president recently announced that the content of distribution agreements remains under investigation.
Non-life Insurance in the Regulator's Spotlight
04/06/2009 Following complaints about agreements between insurance companies and vehicle repairers, the Competition Authority is focusing on the relationship between the sectors. No evidence has been found to justify the commencement of formal proceedings, but with the revision of the EU Block Exemption Regulation still undecided, a future examination by the authority cannot be ruled out.
Competition Authority Imposes Provisional Measures on Promotional Campaign
09/04/2009 The first quarter of 2009 saw the Competition Authority's first use of its power to adopt interim or provisional measures under Article 27 of the Competition Act. The authority temporarily suspended a promotional campaign by film distributor and cinema company ZON Multimédia that offered free cinema tickets to subscribers to ZON's television service.
Competition Authority Evaluates Performance of First Council
12/03/2009 The Competition Authority's annual report for 2007 assesses the organization's first five years. Among other things, it reviews the authority's merger review work, its action on restrictive behaviour and its advisory role - it estimates that every euro of the authority's funding has yielded €20 in benefits to consumers. However, the report also identifies concerns about judicial challenges to the authority's decisions.
Joint Venture in Travel Sector Prompts Clarifications on Merger Notifications
22/01/2009 The Competition Authority has ruled on two significant points in assessing the scope of and responsibility for merger notifications: the issue of interrelated transactions and the issue of which undertakings should notify a concentration involving a change of controlling shareholders of an existing joint venture.
South Africa
Competition Tribunal Approves Bafokeng Merger
29/10/2009 The Competition Tribunal has unconditionally approved the merger between Royal Bafokeng Resources (Pty) Ltd and Bafokeng Rasimone Platinum Mine Joint Venture. The tribunal noted that there was a product overlap between the merging firms, but concluded that such an overlap would not change the market structure or result in increased market share.
Tribunal Approves Masscash/Sunshine Cash and Carry Merger
29/10/2009 The Competition Tribunal recently unconditionally approved the merger between Clidet No 851 (Pty) Ltd and Sunshine Cash and Carry CC. The tribunal considered the effect that Masscash's acquisition of a controlling stake in Sunshine would have on the market for supply of wholesale grocery in the Roodepoort area.
Competition Tribunal Conditionally Approves Stationery Market Merger
22/10/2009 The Competition Tribunal has considered the acquisition of Pretoria Wholesale Stationers by Bidpaper Plus. The Competition Commission's main concern was that the merged entity would have a significant share of the wholesale market for the supply of stationery. However, in view of factors such as alternative sources of supply and ease of market entry, conditional approval was granted.
Tribunal Unconditionally Approves Investec Bank/Stella Group Holdings Merger
22/10/2009 The Competition Tribunal recently unconditionally approved the acquisition of Stella Group Holdings (Proprietary) Limited by Investec Bank Limited and Business Venture Investments 1343 (Proprietary) Limited. The tribunal found that Investec Bank and Business Venture Investments were not involved in Stella Group Holdings' activities and that consequently the merger would not result in overlap between the parties.
ICASA to Aid Competition Commission in Mobile Operator Probe
15/10/2009 The Independent Communications Authority of South Africa has stated that there is a need to investigate South Africa's relatively high mobile phone rates, as these costs marginalize low-income citizens. The authority has offered to cooperate with the commission in its investigation into possible collusion and anti-competitive behaviour by mobile operators.
Competition Tribunal Approves Aquarius Platinum/Ridge Mining Merger
15/10/2009 The Competition Tribunal recently delivered written reasons for its decision to approve unconditionally the merger between Aquarius Platinum Ltd and Ridge Mining plc. The commission determined that the merging parties' share in the exploration and mining of platinum group metals market is insignificant and is unlikely to lead to a prevention or lessening of competition.
Sweden
Sale of AstraZeneca Drugs Portfolio to GlaxoSmithKline Approved
23/04/2009 Following an in-depth investigation, the Competition Authority has unconditionally cleared AstraZeneca's proposed divestment of its subsidiary AstraZeneca Tika SNC – a portfolio of over-the-counter products – to GlaxoSmithKline. Both companies manufacture and sell, among other things, non-prescription drugs for pain and fever.
Competition Authority Rules on EuroBonus Scheme
26/02/2009 The Competition Authority has ruled that an order issued by the Market Court in 2001 prohibiting Scandinavian Airlines Systems from applying its EuroBonus can no longer be enforced. It did not examine whether such reintroduction of the scheme on routes exposed to competition would represent an infringement and it is for the airline to assess on what routes the scheme can now be applied.
Algeria
Regulatory Reform: Anything New under the Sun?
22/01/2009 Recent regulatory reforms include a sweeping prohibition of exclusive agreements and the attachment of the Competition Council to the Trade Ministry. It is unclear whether the council will manage to balance effective enforcement and independence, but the moves indicate that undertakings keen to break into the Algerian market or extend their market share can no longer afford to ignore the regulator or the law.
Austria
Non-discrimination Rule to Apply to Everyone
08/10/2009 In 2008 and 2009 the Supreme Court, acting as Higher Cartel Court, rendered rare decisions on the basis of the Local Supply Act. These controversial decisions may have significant consequences for the qualification of undertakings' discriminatory practices.
No Declaratory Decisions against Principal Witnesses
16/07/2009 The Supreme Court, acting as Higher Cartel Court, recently confirmed a second Cartel Court fine decision based on the 2006 leniency programme. According to the Supreme Court's decision, in future, before filing its applications with the Cartel Court, the Federal Cartel Authority will have to examine in detail whether the preconditions for accepting an undertaking under the leniency programme have been met.
Third-Party Contracts Continue Infringement
23/04/2009 The Supreme Court, acting as the Higher Cartel Court, recently rendered a new decision on a previous infringement of antitrust law that had ongoing effects. The case involved the allegedly abusive promotion of contracts no longer available on the market by the defendant.
Brazil
CADE Imposes Record Fine on AmBev
15/10/2009 The Administrative Council for Economic Defence (CADE) recently fined AmBev R352.7 million for anti-competitive conduct in the beer market. This is the highest fine that CADE has imposed on a company. CADE considered that AmBev's reseller loyalty and subsidy programme had the potential to harm competition, close the market and artificially increase competitors' costs.
Secretariat of Economic Law Publishes Anti-cartel Statistics
23/07/2009 The Secretariat of Economic Law (SDE) of the Ministry of Justice recently published a detailed report of its activities in 2008. The statistics demonstrate that the SDE has made some major improvements in its interaction and cooperation with the federal and state police and the federal public prosecutors in order to strengthen anti-cartel enforcement in Brazil.
CADE Confirms Previous Interpretation of Filing Criteria
07/05/2009 The Administrative Counsel for Economic Defence has issued a decision confirming its previous interpretation of the filing criteria set out in Law 8,884/94. If the new interpretation of the criteria becomes binding precedent, the number of transactions which will require a merger filing will be reduced.
Proposed Changes to Merger Filing Review Procedures
30/04/2009 The Administrative Council for Economic Defence (CADE) is consulting on a bid resolution which would create Article 101-A in the CADE Rules of Procedure. According to the proposal, merger filings which are currently considered through the trial block proceeding could be decided by a decision of the reviewer, ad referendum of the plenary session, rather than by a decision taken by all seven commissioners.
China
Getting in a (Price) Fix? Draft Rules on Anti-monopoly Law's Pricing Provisions
24/09/2009 The draft Anti-price Monopoly Rules represent the National Development and Reform Commission's first formal indication of how it intends to implement the law. This welcome guidance sheds light on some of the uncertain or controversial provisions of the law, but also leaves significant issues in need of further clarification.
The Anti-monopoly Law and IP Rights: A Relationship under Strain
16/07/2009 It is difficult to draw a line between the permitted protection of IP rights and activities that prompt competition concerns. The regulation of this uneasy relationship has been of particular concern in China since the Anti-monopoly Law entered into force in August 2008. The law has been left in an unclear and unsatisfactory state and there is a pressing need for guidance and judicial interpretation.
Approval of Lucite Acquisition Sheds Further Light on Review Process
04/06/2009 The Ministry of Commerce's conditional approval of the proposed acquisition of Lucite International Group Ltd by Mitsubishi Rayon Co Ltd demonstrates a willingness to adopt relatively complex and flexible undertakings and to issue an early decision where appropriate. However, some aspects of the conditions, particularly the decision to require a temporary divestment of production capacity, are ambiguous.
SAIC Finally Publishes Draft Guidance on Anti-monopoly Law
04/06/2009 Following in the footsteps of the Ministry of Commerce, the State Administration for Industry and Commerce has finally published its long-awaited draft guidance on the application of the Anti-monopoly Law in non-price-related cases. However, apart from a few minor clarifications, much of the drafts repeat provisions of the Anti-monopoly Law, rather than providing detailed practical guidance.
Baidu in the Crossfire over Abuse of Dominant Position
21/05/2009 Baidu, a Chinese internet search engine, is the subject of an action for alleged abuse of a dominant market position. The court faces a number of significant questions in determining the market and the nature of dominance and abusive activity, but the case could provide much-needed guidance for other business operators.
Does the Anti-monopoly Law Apply to State-Owned Enterprises?
14/05/2009 Since the Anti-monopoly Law came into force, foreign investors have been trying to assess its impact on existing and planned investments in China. In particular, the issue has been raised of whether state-owned enterprises are fully or partially subject to, or are exempt from, the law. The answer to this question remains far from clear, but further questions will be raised if they are held to be exempt.
Germany
Germany Introduces Second Domestic Merger Control Threshold
26/03/2009 A recent bill amended, among other things, the Act against Restraints of Competition, introducing a second domestic turnover threshold aimed at reducing the number of planned mergers which are subject to notification and control. The new legislation aims to relieve the cartel authorities of the necessity to investigate cases with only marginal domestic relevance and to focus on cases of macro-economic importance.
Mars Fined for Gun Jumping
12/02/2009 The Federal Cartel Office (FCO) has fined US company Mars Inc €4.5 million for closing a deal to acquire US pet food producer Nutro Products without awaiting FCO approval of the transaction. The decision is a signal that the FCO is determined to enforce compliance with the suspension obligation in merger cases by imposing considerable fines.
New Decision Division and Auxiliary Senate Established for Cartel Cases
05/02/2009 The Federal Cartel Office (FCO) and the Dusseldorf Higher Regional Court have enhanced their resources for handling cases involving the prosecution of cartels by establishing an additional decision division and a new auxiliary senate for competition cases. The move illustrates the FCO’s determination to increase its focus on the prosecution of cartels.
Italy
Setting a Benchmark? Regulator's Policy and Proceedings on Interchange Fees
29/10/2009 In the past few years the European Commission and the Italian Competition Authority have both examined the retail banking sector and multilateral interchange fees. Seen in the context of the Italian regulator's previous interventions in the sector, the ongoing proceedings against MasterCard and several other banks could have significant consequences in the European context.
Merger Notifications: What Constitutes a 'Concentration'?
20/08/2009 The Competition Authority has published the new pre-merger notification thresholds. Following a decision by the Council of State, the authority has also published a revised version of its notification form to clarify the meaning of a 'concentration'. The decision establishes that the mere acquisition of a commercial licence does not automatically constitute a 'concentration' under the act.
Supreme Court Rules on Assessing Joint Bids under Antitrust Law
23/07/2009 The Supreme Administrative Court recently addressed the controversial issue of the assessment of joint bidding under antitrust provisions prohibiting anti-competitive agreements. The applicable laws provide no prohibition for undertakings which individually meet the requirements to enter a bidding consortium. Therefore, case law has admitted 'over-dimensioned' bidding consortia.
Council of State Decisions Shed Light on Competition Authority's Fining Policy
22/01/2009 Decisions issued by the Council of State have prompted the Competition Authority to reconsider fines imposed following cartel investigations. The authority reduced its fines for participants in a disinfectant products cartel, but confirmed and explained the €13.2 million fine imposed on oil company Total for cartel activity in the jet fuel market following a reassessment of Total's market share.
Regulator Rules on Abuse of Dominant Position in Airport Services Markets
15/01/2009 The Competition Authority has fined Aeroporti di Roma SpA, the exclusive concessionaire for the management of Rome’s Fiumicino and Ciampino airports, around €1.7 million for abusing its dominant position. The authority found that the company had engaged in excessive pricing and margin squeezing.
Netherlands
Double Criminality: Competition Crime Bill Opens Door to Extradition
15/10/2009 The Netherlands does not allow for criminal enforcement for competition law infringements, such as price fixing and market allocation. However, a bill introducing criminal penalties for competition law violations is being prepared. When the bill becomes law, it will be possible for individuals to be extradited from the Netherlands to countries in which competition law violation constitutes a crime.
Double Check: Authority Imposes Fine for Incorrect Information
15/10/2009 The Competition Authority has imposed a fine of €468,000 on soft drink producer Refresco for providing incorrect and incomplete information in a 2008 notification of its acquisition of Schiffers Food. The authority can impose a fine of up to €450,000 or 1% of a company's turnover for failure to provide accurate and complete information. Refresco's fine of €468,000 represents 0.22% of its turnover in the Netherlands.
Big Brother is Listening: Authority Can Use Public Prosecutor's Telephone Taps
01/10/2009 The Competition Authority, like the European Commission, is not authorized to tap telephones when investigating possible anti-competitive practices. However, the District Court of The Hague recently ruled that the public prosecutor can lawfully provide the authority with transcripts of telephone taps that are installed for criminal investigation purposes.
Pre-emptive Class Actions in Competition Damages Claims
01/10/2009 Claimants no longer seem to await the outcome of the legislative process to seek collective redress for damages allegedly suffered from cartels. In various EU member states, including the Netherlands, private organizations have launched innovative actions in an attempt to collect damages on behalf of groups of injured parties that have allegedly suffered from cartels.
Dawn Raids on Fruit and Vegetable Companies
17/09/2009 The Competition Authority recently carried out dawn raids on several companies active in the fruit and vegetable sector to collect information on suspected price fixing and information exchange. More and more roads appear to lead to the authority as it taps new sources of information on possible competition law infringements.
Two for One: Advice on Interrelated Transactions
17/09/2009 The Competition Authority has concluded that an intended transaction was so closely related to a 2007 transaction as to constitute a single concentration. Even though a substantial period of time had elapsed between the two transactions, the authority found the factual cooperation during this period decisive for its conclusion that the transactions constituted a single concentration.
Norway
Opening-Up of Websites for Private Sellers of Residential Property
15/10/2009 In January 2009 the Competition Authority proposed a regulation allowing access to websites to be granted to anyone wishing to place advertisements on non-discriminatory conditions. The Ministry of Government Administration and Reform has now adopted the regulation.
Competition Authority Adopts Merger Control Best Practice Guidelines
10/09/2009 The Competition Authority has published best practice guidelines on the conduct of merger control proceedings. The purpose of the guidelines is to improve the predictability of proceedings and establish an efficient review process. The guidelines discuss both pre-notification contacts and case handling after receipt of a formal notification.
Acquisition of Securities - Partial Exception from Suspension of Concentrations
21/05/2009 According to a newly adopted regulation, certain types of acquisition of listed securities are no longer subject to the general standstill obligation under the Competition Act. The regulation provides that a public bid or a series of transactions in securities admitted to trading on a market can be partly implemented notwithstanding the automatic suspension of all concentrations subject to notification under the act.
Tine BA Cleared of Infringement of Competition Act
14/05/2009 The Oslo District Court recently decided that the largest producer, distributor and exporter of dairy products in Norway, Tine BA, did not infringe the Competition Act when it entered into an exclusive distribution agreement with one of the four major retail chains in Norway, Rema 1000.
Administrative Fine Levied for Violation of Prohibition on Implementation in Mergers
26/02/2009 For the first time since the amendment of the Competition Act, the Competition Authority has imposed an administrative fine - of Nkr150,000 (approximately €17,000) - on a Norwegian company for violation of the prohibition against implementation of a concentration before the authority's case handling is complete.
Switzerland
Competition Commission Approves Merger of Tamedia and Edipresse
15/10/2009 The Competition Commission has approved the proposed concentration between Tamedia and Edipresse - two of Switzerland's main regional newspaper publishers - following a second-stage assessment. The concentration was cleared without conditions and commitments under the so-called 'failing firm' doctrine.
Commission Imposes Fines for Collusive Tendering in Electrical Equipment Sector
08/10/2009 The Competition Commission has fined eight undertakings Sfr1.24 million for collusive tendering for electrical equipment in construction projects. This decision marks the first time that the commission has imposed fines for collusive tendering and confirms the principle that the reaching of an amicable settlement does not rule out fines in respect of infringements that took place before the conclusion of that settlement.
Competition Commission to Assess Newspaper Distribution Merger
06/08/2009 The Competition Commission has sent the proposed concentration between Swiss Post, NZZ Group and Tamedia to a second-stage assessment. The companies plan to pool their resources to provide early delivery of newspapers and magazines. If approved, the concentration will result in a system of early distribution under the management of Swiss Post.
Commission Opens Investigation into Roadworks Sector
30/07/2009 The Competition Commission has initiated an investigation into undertakings that are active in the roadworks and civil engineer sectors in the cantons of Zurich and Aargau. The commission discovered evidence which pointed to market sharing in the way that tenders for roadworks contracts are submitted. The commission has conducted dawn raids as part of the evidence-gathering process.
Competition Commission Fines Felco and Landi for Retail Price Fixing
23/07/2009 The Competition Commission has fined Felco SA and Landi Schweiz AG – two companies active in the industrial cutting tools sector – for retail price fixing. This is the first case in which penalties have been imposed due to the finding of a vertical agreement setting prices for resale, considered by Article 5 of the Competition Act to be particularly harmful to competition.
Secretariat Opens Preliminary Investigation into Maestro Interchange Fee
09/07/2009 The secretariat of the Competition Commission has opened a preliminary investigation into Maestro's introduction of an interchange fee for the use of its debit card. The investigation followed a preliminary notification which was filed by Maestro with the commission before it implemented its project.
Construction
Turks & Caicos Islands
Building on the Spoken Word: A Guide to Oral Construction Contracts
11/05/2009 In the Turks and Caicos Islands, parties often begin building commercial or residential properties or engage in engineering works without taking legal advice on the appropriate form of building contract and without signing a formal building contract. This update provides advice to parties regarding their rights when engaging in building or engineering work in the absence of a formal written contract.
Switzerland
Timeliness of Defect Notices in the Event of Uncertain Liability of Multiple Contractors
03/08/2009 A recent Supreme Court decision confirmed the opinion that, in the event of the discovery of a defect with uncertain liability between multiple contractors, the owner must establish not only the existence of a defect, but also which contractor is contractually liable for that defect. Only at that point does the time limit to notify defects commence.
Veto Rights Within a Construction Consortium
01/06/2009 A recent case demonstrated that, in disputes over a consortium member's refusal to pay for supplies additional to those stated in the building contract, a contractual veto right is not unlimited. The case showed the member's right to refuse to provide additional supplies without additional payment, although it is unlikely that a veto right could allow a party to refuse to provide such supplies where additional payment has been offered.
Germany
Federal court sets out principles of sound insulation in residential construction
28/09/2009 The Federal Court of Justice has recently ruled on several cases regarding the problem of what standard of sound insulation is required in the construction of semi-detached houses and owner-occupied apartments. The issue arose following significant regulatory changes. This update discusses the most important case law principles which have emerged from the court's rulings.
Contract Award Process Risk to be Borne by Public Sector Client
03/08/2009 A recent case has demonstrated that, in future, public sector clients for construction projects will have to pay any extra costs resulting from an unexpected delay in the award of the contract. The case law regarding the problems relating to delayed contract award proceedings remains in a developmental phase.
Court Clarifies Wording on Return of Guarantee Certificates
15/06/2009 The Federal Court of Justice has clarified that a contractor can demand the return of the guarantee certificate both to itself and to the guarantor. This ruling seems sensible since under its own contractual relationship with the guarantor, the contractor is obliged to act for the benefit of the guarantor in ensuring that the guarantee certificate is not left in the hands of the client for longer than is necessary.
Federal Court of Justice Rules on Contractor's Burden of Proof
01/06/2009 The Federal Court of Justice has ruled on the determination of the burden of proof in a case related to substitute performance. The contractor would normally be liable to determine the specific cause of the defect, since no acceptance had yet been made in this respect. However, the court held that the contractor is relieved of this obligation in cases where the client has made it impossible for the contractor to do so.
Federal Court Rules on Unethical Practices
26/05/2009 The Federal Court of Justice has ruled on a case in which a contractor had agreed a unit price for an item in the specifications which was 200 times higher than the national average price. The case demonstrates that the court will not accept arguments suggesting that a price agreement as a whole is ethical because overpriced items in the specifications are compensated for by other items specified at below-average prices.
Federal Court Rules on Turnover Tax Liability
11/05/2009 The Federal Court of Justice has clarified the circumstances in which a client is liable for turnover tax on accounts receivable by a contractor arising from construction delays. The findings are significant for developers and building owners that are unable to reclaim turnover tax (currently 19%) from the Tax Office (ie, public sector clients and non-profit corporations).
Ireland
Construction Contracts and Design Responsibility
03/08/2009 All parties to a construction project should understand at the outset who is responsible for the design element of that project. Parties should also be aware of the situations in which design responsibility or a standard of fitness for purpose in respect of design responsibility can be implied into a contract.
Ownership of Materials: On and Off Site
26/05/2009 The global and domestic economic downturn and the resultant increase in instances of insolvency in construction companies have reinforced the importance for employers to take security over materials that have been paid for but not received, and the need for contractors and suppliers to assert retention of title over goods and materials that have been delivered but not paid for in full.
Ukraine
Construction Financing Fund Agreement: Compulsory Insurance of Property Risks
21/09/2009 The Cabinet of Ministers has issued Order 805, which sets out rules on the compulsory insurance of property risks in respect of agreements for participation in the government's construction financing fund. The coverage under a compulsory insurance agreement is determined by the amount of funding stipulated in the fund participation agreement.
Parliament Approves Streamlined Procedure for Commissioning New Buildings
09/03/2009 Two recently approved laws are intended to expedite the procedure for approving new buildings for use. Although the reformed regime has a number of benefits, many critics within the sector find it difficult to believe that it will improve a time-consuming and heavily bureaucratic procedure.
Corporate Finance/M&A
Guernsey
Guernsey to Adopt City Code on Takeovers and Mergers
17/06/2009 The Companies (Panel on Takeovers and Mergers) Ordinance 2009 will come into force shortly, formalizing an agreement under which the UK-based panel regulates Guernsey takeovers and mergers by administering the City Code on Takeovers and Mergers.
First Scheme of Arrangement under Companies (Guernsey) Law 2008
18/02/2009 One of the many changes introduced in Guernsey's comprehensive new companies law allows a Guernsey company and its members to enter into a scheme of arrangement where 75% or more of the members vote in favour. The Royal Court has now approved the first such scheme under the new legislation.
Canada
New Approval Requirements for Acquisitions Involving Share Exchanges
21/10/2009 The Toronto Stock Exchange recently announced that it will amend its rules to eliminate an important exemption from its security holder approval requirements that are generally applicable to acquisitions involving the issuance by a listed issuer of securities from treasury.
OSC Allows Shareholder Rights Plan to Stand
08/07/2009 The Ontario Securities Commission recently released a decision dismissing an application by Pala Investments Holdings Limited and its subsidiary to cease trade two shareholder rights plans of Neo Material Technologies Inc. This decision potentially indicates a shift towards providing boards of directors with greater flexibility in resisting takeover attempts.
Recent M&A Developments in Light of the Current Market Turmoil
13/05/2009 A substantial number of the deals originating prior to the current market turmoil have faced considerable challenges. Some have been renegotiated or terminated and a relatively large number have resulted in litigation, often involving scrutiny of the actions of boards and management. Against this backdrop, a number of recent illustrative developments merit particular consideration.
Injunction of RIM's Certicom Bid Necessitates Review of Confidentiality Agreements
04/03/2009 The Ontario Superior Court of Justice's recent decision in Certicom Corp v Research In Motion Limited has significant implications for M&A practice in Canada, particularly in hostile situations. In the wake of the Certicom decision, acquirers contemplating hostile transactions in Canada will have to review and consider carefully the terms of any non-disclosure agreements that they have entered into with the potential target.
Supreme Court of Canada Releases Reasons in BCE Decision
25/02/2009 The Supreme Court of Canada recently released reasons supporting its unanimous decision to overturn the controversial Quebec Court of Appeal decision and approve BCE's proposed plan of arrangement. The Supreme Court's reasons provide valuable clarification regarding the duties of directors and the thresholds for challenging a transaction under the oppression remedy or the statutory standard for approval of a plan of arrangement.
Price Reductions in Takeover Bids
14/01/2009 There have been a number of recent takeover bids in Canada where the bidder has varied the bid after commencement to reduce the price offered for the securities. This kind of variation is unusual in Canada and may raise a number of potential issues that bidders should consider. These issues are particularly relevant where the bid is not supported and may be actively resisted by the target.
China
Battle for the Company Seal: Foreign Private Equity Investors and Management
07/10/2009 China's laws and practices can seriously restrict foreign investors' ability to protect their rights and interests in a Chinese company that they control. The courts and government authorities tend to be flexible when a company presents a case where wrongdoing is clear on the facts. However, in order to obtain an optimal settlement in a complex private equity dispute, foreign investors must plan ahead.
Ministry of Commerce Facilitates Outbound Investment
29/04/2009 The new Measures on Administration of Outbound Investment delegate the authority to verify Chinese outbound investment projects within certain thresholds to provincial verification authorities; they also simplify the verification application process and review standards. The changes are expected to facilitate outbound investment by state-owned and private companies.
Ministry of Commerce Delegates Approval of Foreign Direct Projects and Acquisitions
11/02/2009 The Ministry of Commerce has issued a circular which delegates part of its approval authority over foreign-invested projects to its provincial counterparts. The change applies to acquisitions by foreign investors of the assets of - or an equity interest in - existing Chinese enterprises, facilitating many foreign acquisitions by bringing them under the authority of the provincial approval entities.
Switzerland
Swiss Takeover Regulations Revised
08/04/2009 The Federal Act on Stock Exchanges and Securities Trading and its associated ordinances have been revised. The new takeover regulations reflect the existing practice of the Takeover Board, but also include several amendments to the rules governing public tender offers. This update summarizes the general rules to be considered by a bidder when determining an offer price and the new rules on exchange offers.
Acquiring Private Companies: Protection against Undisclosed Liabilities
07/01/2009 The principal methods of buying a Swiss company are to buy its assets or shares, or to merge the target with the acquirer or with a newly formed subsidiary of the acquirer. Choosing the appropriate legal structure for the acquisition is the starting point of each transaction and will have a major impact on the risks of the acquirer to assume undisclosed liabilities.
Finland
EU Acquisition Directive Implemented
10/06/2009 The EU Acquisition Directive has been implemented in Finland through amendments to the Act on the Financial Supervisory Authority, the Act on Credit Institutions, the Act on Insurance Companies and several other acts regarding entities supervised by the Finnish Financial Supervisory Authority.
Jersey
Private Placement of Shares in a Jersey Company
27/05/2009 As a result of the shortage of liquidity in the bank lending markets, many businesses need additional funding. One source of funds might be a private placement of shares. This update looks at some of the Jersey law issues that may arise in the context of a private placement of shares by a Jersey company.
Austria
Is There a Future for Callable Bonds in Austria?
07/10/2009 In recent times corporate bonds have proved to be an alternative to traditional bank loans. However, a recent Higher Regional Court of Vienna decision, which is pending before the Supreme Court, may cause callable bonds to disappear as a means of raising money for corporate activity.
Contractual Non-compete Provisions on Trial
15/07/2009 The Supreme Court has ruled on the enforceability of a contractual non-compete provision. In its ruling the court contributed to the interpretation of the 'good morals' standard in the context of M&A transactions. The decision reiterates certain parameters regarding the geographical or temporal reach of non-compete provisions and their relation to the final purchase price.
M&A Market Weathers Financial Crisis
08/04/2009 Limited liquidity in the global markets has led to banks tightening their financing policies, which in turn has resulted in a significant reduction in the number of leveraged transactions. However, despite the negative market sentiment, the latest statistical data indicates that the Austrian M&A market has done surprisingly well in the recent past and could continue to resist the depression throughout the coming year.
Cyprus
Cross-Border Mergers of Limited Liability Companies
09/09/2009 A cross-border merger may take place between limited liability companies that are incorporated in accordance with the legislation of a member state and have their registered office, central administration or main place of establishment in the European Union. This update summarizes the main provisions of the Companies Law that apply to cross-border mergers involving a Cypriot limited liability company.
Latvia
Procedure for Acquiring Qualifying Holding in Financial Market Participants Amended
17/06/2009 The Saeima (Parliament) has adopted amendments to several laws, including the Law on Reinsurance, the Law on the Market for Financial Instruments, the Law on Credit Institutions and the Law on Insurance Companies and Supervision Thereof, giving effect to the provisions of the EU Acquisitions Directive. The amendments apply to the operations of financial market participants.
M&A Developments in the Current Financial Climate
25/03/2009 In comparison to the period of economic boom, during the last year the number of M&A transactions in Latvia has dropped considerably. Foreign and local investors are still interested in certain sectors of the Latvian economy; however, the present economic downturn has had a considerable impact on M&A activities, which have now almost come to a halt.
New Zealand
Review of Foreign Investment Rules
24/06/2009 The government is conducting a review of the Overseas Investment Act 2005, which regulates foreign investment in New Zealand. The review aims to simplify the foreign investment rules making investment in New Zealand simpler and more attractive, while protecting sensitive land, assets and resources.
Takeovers Panel Consults on Upstream Takeovers
17/06/2009 The Takeovers Panel has published a consultation paper on the implications of the Takeovers Code in relation to upstream takeovers. The panel wishes to adopt a transparent policy on dealing with such takeovers so that it can provide clarity on the applicable rules and certainty to the market.
Turkey
Media Company Fined TRY3.76 Billion for Share Transfer
21/10/2009 The competent tax authority in Turkey, the Revenue Administration of the Ministry of Finance, recently fined one direct subsidiary and three indirect subsidiaries of media company Dogan Yayin Holding AS a total of TRY3.76 billion for delinquent taxes and a tax loss penalty. The fines were a result of share exchange transactions (share swaps) between Dogan Yayin's group companies.
USA
Implications for Private Equity Funds with Portfolio Company Pension Liability
19/08/2009 Since the Appeals Board of the Pension Benefit Guaranty Corporation issued a decision holding a private equity fund liable for the pension underfunding of one of the fund's bankrupt portfolio companies, it is vital that such funds remain focused on this issue and follow ongoing developments in this area. One way to avoid the issue, or to minimize its impact, is to perform thorough due diligence on target companies.
Secondary Transactions in Private Equity Interests: Market Report
24/06/2009 As a result of recent market turmoil, there are many indications that 2009 will be a boom year for secondary transactions in private equity fund interests. Fund investors increasingly view secondary funds as an alternative means to gain liquidity and rebalance their portfolios, and buyers are motivated by the opportunity to purchase fund interests at discounted prices.
Key Legal and Transactional Issues in Secondary Private Equity Fund Transaction
13/05/2009 The secondary market for private equity partnership interests has grown dramatically over the last decade. Unlike initial investors in a fund, secondary buyers are investing not just in the fund's management team and track record, but also in its existing portfolio companies. This provides the opportunity for careful due diligence and analysis of each of the fund's portfolio companies.
Czech Republic
Amendment to Commercial Code Lifts Complete Ban on Financial Assistance
05/08/2009 A recent amendment to the Commercial Code lifts the complete ban on a company providing any financial assistance in relation to acquiring its own shares. However, even after the amendment, the ban still applies to both limited liability companies and joint stock companies. This update looks at the conditions under which financial assistance can be provided by these companies.
Guarantees Among Related Parties Need Not Be Appraised By Court-Appointed Expert
27/05/2009 The Supreme Court recently issued a controversial judgment stating that guarantees falling under Section 196a of the Commercial Code need not be appraised by a court-appointed expert in order to be valid. However, while the judgment may decrease transaction costs and speed up business transactions, it remains to be seen whether it will be accepted as authority by the lower courts and legal scholars.
Title Issues - Implications for Due Diligence
18/03/2009 Investors are often confronted with uncertainty regarding a seller's legal title to shares in a joint stock company or an ownership interest in a limited liability company. This update looks at certain title issues that often arise when undertaking due diligence prior to acquiring a Czech target.
France
Stock Options and Free Share Plans in Company Acquisitions
03/06/2009 This update highlights the key corporate issues that must be dealt with when acquiring a company with existing plans or that is likely to implement new plans following the acquisition. Acquirors that are not sensitive to the importance of these plans run the risk of missing out on favourable social and tax regimes in case of non-compliance with Commercial Code requirements.
Seller's Liability for Business Facing Financial Difficulty
08/04/2009 A court decision has outlined the exact measure of risk involved when a company undergoing reorganization aims to sell a branch of activity in economic distress. The decision raises a number of questions relating to the extent of a seller's liability following the sale of a business facing financial difficulty.
Earn-Out Clauses: A User's Guide
25/02/2009 Following an increase in M&A transactions over the past 15 years, Anglo-Saxon concepts have been pursued in French law in response to demands caused by the increasingly international nature of these transactions. One of these concepts, the earn-out clause, has appeared in business acquisitions.
Recent Case Law on Warranty and Indemnity Claims
21/01/2009 This update examines French warranty and indemnity claims case law. It should help foreign companies to assess the importance of the terms of agreement whenever a stock purchase agreement is subject to French law, and thereby to avoid pitfalls. A few sample decisions illustrate the importance of careful drafting and strict performance of the warranty terms in share purchase agreements.
Germany
'Phoenix' and 'Cuckoo' Businesses: Liability Risks Related to Business Transfers
26/08/2009 The treatment of 'phoenix' companies under German law is quite distinct from that in other jurisdictions. A new owner that carries on an existing business under an identical or similar name as that used by the original company may face unlimited liability for all debts arising from the business activity of the original company. Although this liability can easily be excluded, there are several pitfalls which must be avoided.
Regulations on Acquisitions by Non-EU Investors Added to Foreign Trade Act
10/06/2009 Amendments to the Foreign Trade Act and the Foreign Trade Ordinance have taken effect. They empower the Federal Ministry of Economic Affairs and Technology to control - and, in certain circumstances, block - the acquisition of companies and interests in companies in Germany by non-EU investors.
Acquisition of Enterprises and Disclosure Obligations
04/02/2009 When negotiating a corporate acquisition, the buyer and the seller often agree on a standardized share purchase agreement. It is impossible for a seller to exclude itself from any liability for damage sustained by the buyer due to a defect which the seller was aware of but did not disclose. Many recent civil actions against enterprise sellers have been based on alleged breaches of disclosure obligations.
Italy
Financial Assistance Rules for Joint Stock Companies and Limited Liability Companies
28/10/2009 Civil Code changes have removed the prohibition against financial assistance in the case of joint stock companies, but make the provision of loans and guarantees subject to safeguards and set requirements to protect shareholders and third parties. For some commentators, it would be reasonable to extend the regime to limited liability companies, which have the same need to protect their corporate capital.
Anti-crisis Legislation Seeks to Balance M&A Transactions
21/10/2009 The government's legislative response to the financial crisis has included measures on M&A activity. Among other things, it has removed certain thresholds on the acquisition by industrial corporations of equity interests in banks' corporate capital, and has sought to shield Italian companies from hostile takeovers by downgrading the passivity and neutralization rules. Although widely welcomed, some changes have attracted criticism.
Mexico
Shareholders' Agreements in Investment Promotion Corporations
18/02/2009 The Securities Market Law provides that shareholders in an investment promotion corporation may agree on certain rights and obligations. The flexibility of this corporate structure, particularly the ability to provide for 'drag-along' and 'tag-along' rights and agreements on voting rights, makes it useful in mergers and acquisitions.
Belgium
Key Points for Providing Financial Assistance
05/08/2009 Since the start of 2009 financial assistance has been allowed in Belgium on certain conditions. However, the new rules have been received unenthusiastically because some of the conditions are considered too burdensome, particularly the requirements to make public the price of the share transfer and to create an unavailable reserve for an amount equal to the aggregate financial assistance.
India
Merger Review under the Competition Act: Regressive or Progressive Steps?
23/09/2009 The Competition Act 2002, which recently replaced the Monopolies and Restrictive Trade Practices Act 1969, establishes merger review and control procedures designed to prevent anti-competitive combinations. However, the Competition Commission must be sensitive to the concerns of interested parties and ensure that combinations are regulated in a way that is conducive to national growth.
Impact of Latest FDI Regime on M&A and the Bharti-MTN Deal
15/07/2009 Foreign direct investment (FDI) is essential for long-term economic development. It not only facilitates capital inflow, but also enhances the competitiveness of the domestic economy. It is considered an indispensable tool for the Indian economy and the government monitors all inflow through its specialized departments. Radical changes were recently made to the FDI norms in anticipation of increased foreign investment.
Valuation in a Global Downturn
24/06/2009 In this global downturn it might be asked whether it is timely and appropriate to plan mergers, takeovers, disinvestments and acquisitions. Some say it is a buyers' market, since the value of business assets is low - but does that mean it is also a good time to sell? How do companies determine the value of an asset and what is the legal impact of the valuation?
Strict Compliance with Provisions of Chapter III of Takeover Code Relaxed
25/03/2009 The Securities and Exchange Board of India (SEBI) has announced a second 2009 amendment to the Substantial Acquisition of Shares and Takeovers Regulations 1997 (the Takeover Code). Newly inserted Regulation 29A states that on a target company's application, SEBI may relax one or more of the provisions of Chapter III, subject to certain conditions.
Netherlands
Numico, Grolsch and Hagemeyer Clarify New Squeeze-Out Procedure
28/10/2009 The new squeeze-out procedure - which gives a bidder the option of buying out the remaining minority shareholders within three months of its public bid - has recently been applied for the first time in the Numico, Grolsch and Hagemeyer Cases. These cases have clarified the potential of the procedure.
Sweden
Rules on Public Takeovers on Stock Market Revised
14/10/2009 The Commerce Stock Exchange Committee's revised rules for public takeover bids on the Swedish stock market have been adopted by NASDAQ OMX Stockholm and NGM Equity. The review of the rules has been undertaken in light of recent developments on the Swedish and international capital markets and a number of high-profile transactions.
Share Purchase Agreements: Key Issues in a Changing Market
18/03/2009 The harsher financial market conditions over the last 12 months have had an adverse impact on the way in which deals are carried out, especially in relation to the purchaser's ability to secure financing. The slowdown in M&A activity has resulted in a less competitive market, putting the purchaser in a better position to negotiate favourable agreement terms at the expense of the seller.
Ukraine
Attracting New Investment or Holding Back an Outgoing Tide?
05/08/2009 Many experts in the sector believe that the government must liberalize procedures for foreign investment and the repatriation of investments and profits. Would-be investors see aspects of Ukrainian M&A law, such as the regulations on the settlement of accounts through Ukrainian banks, as confusing and unnecessary, but the fact that some are still willing to invest is an indication of the market's potential.
Supreme Court Resolution Reduces Options for Corporate Raiders
04/02/2009 A resolution issued by the Supreme Court will help to prevent the submission of frivolous claims before different commercial courts as a tactic in hostile takeovers. Corporate raiders will find it harder to seek aggressive interim measures with the intention of disrupting a target company's operations.
Corporate Immigration
USA
USCIS Reports on Amount of H-1B Petitions Received
16/10/2009 US Citizenship and Immigration Services has posted an update on the amount of H-1B petitions it has received. Due to the recession, the number of filed petitions is much lower than usual: by September 25 2009, roughly 46,700 H-1B cap subject petitions and 20,000 H-1B petitions that qualify for the advanced degree cap exemption had been received.
Senator Pushes for New Probe of H-1B Outsourcing Firms
02/10/2009 As US Citizenship and Immigration Services (USCIS) prepares to issue the annual allotment of visas, Senator Charles Grassley is calling for sweeping new investigations of H-1B. He wants a USCIS inquiry and new powers to push companies to produce additional evidence that H-1B visa holders have a job awaiting them in the United States.
Federal Contractors and Subcontractors Must Now Use E-Verify
02/10/2009 After a number of legal hold-ups, the E-Verify system has become a required system for the verification of employee eligibility for federal contractors and subcontractors. All companies with contracts with the federal government and their subcontractors must use E-Verify to verify the employment eligibility of their employees.
Recent Expansion of USCIS Enforcement: H-1B and L-1 Site Visits
25/09/2009 In recent months US Citizenship and Immigration Services has begun unannounced site visits to workplaces and administrative offices of companies with H-1B and L-1 petition employees. The visits are part of a major programme of compliance enforcement for the Department of Homeland Security and promise to be the focus of expanding workplace inspections by several federal agencies
US and Mexico Work Together to Create New Cross-Border Communications Network
25/09/2009 Senior officials of the US-Mexico High-Level Consultative Commission on Telecommunications have signed a bilateral agreement that will support the creation of a new cross-border communications network for law enforcement and public safety officials to use to strengthen border security.
USCIS Increases Number of Worksite Audits
28/08/2009 Recent feedback has revealed that US Customs and Immigration Services has significantly increased the number of surprise visits to the worksites of US employers of H-1B and L-1 visa beneficiaries. The goal of these visits is to verify the identity of the petitioner and beneficiary, and to make certain that the beneficiary is working within the terms of the visa received.
Mexico
Changes to Exit and Re-entry Permits May Catch Tourists and Business Travellers
23/10/2009 The National Immigration Institute recently published a circular that introduces new guidelines, forms and procedures for exit and re-entry permits. If an individual enters Mexico as a tourist or with the temporary business immigration form and his or her change of immigration category or exchange of documents for Form FM3 is pending, he or she may not leave Mexico without obtaining an official authorization.
New Immigration Procedures for Tourism and Business Travel
25/09/2009 Mexico has established new immigration procedures for the temporary entry of businesspeople and tourists whose sources of income are located abroad, expediting visa issuance and simplifying the entry criteria for applicants. It is also important to understand the function of Form FM3, which guarantees an alien's right of lawful residence.
Multiple 10-Year Consular Visas
31/07/2009 The government has authorized the issuance of consular visas for 10 years for individuals of regulated nationality who may obtain their visa from the Mexican consular representations for travel to Mexico for tourist, transient immigration or business purposes.
New Entry Permit and Documentation Rules Challenge Legal Principles
09/04/2009 The National Immigration Institute has established a new procedure for granting aliens entry permits and documents. Mexican embassies and consulates must interview aliens who intend to enter Mexico in order to verify that the activity which they plan to undertake in Mexico is consistent with the terms on which they requested and were granted entry clearance.
Belgium
Protecting the Labour Market and the Battle for Brainpower
09/04/2009 Belgium has extended conditions on the freedom of movement of workers from Bulgaria and Romania, but transitional measures for nationals of the other eight new EU member states are due to end soon, despite government consensus on further restrictions. However, the government is taking steps to encourage highly qualified workers and to simplify the work permit process for long-term residents.
Switzerland
Switzerland Renews Commitment to Free Movement with European Union
12/06/2009 Under its Bilateral Treaty on Free Movement with the European Union, in June 2007 Switzerland lifted its quota rules. Since then, nationals of 17 EU member states have enjoyed the right to reside and work in Switzerland. Despite the fact that the criteria for the reimposition of restrictions were recently met, the federal government has decided not to invoke the protection clause.
United Kingdom
Tier 2 of Points-Based System: Is Change Around the Corner?
21/08/2009 The Migration Advisory Committee has submitted a report to the government on the Tier 2 (work permit) category. It appears that the committee found no evidence to remove either the Tier 2 Intra-Company Transfer or the Resident Labour Market Test routes. However, there are likely to be policy recommendations and suggestions that particular elements of Tier 2 be altered.
Using Migration as a Weapon in the Fight against the Economic Downturn
22/05/2009 The UK government is increasing restrictions on foreign workers seeking to enter the country to provide greater protection for UK workers. However, these existing restrictions are a step towards far more onerous restrictions on foreign workers in the United Kingdom.
An Investors' Guide to New Points-Based System
06/03/2009 The new points-based immigration system came into force in 2008 and has radically changed the routes and options for the overseas investor looking to do business in the United Kingdom. This update reviews what has changed for the better, what has changed for the worse, the options for doing business in the United Kingdom and what else is on the horizon.
Tier 2 of New Points-Based Immigration System and Its Impact on Employers
23/01/2009 Tier 2 is the main UK immigration category used by employers to sponsor the employment of foreign nationals in the United Kingdom. As a sponsorship licence holder, the employer or its representative issues the relevant work authorization or certificate of sponsorship, which the potential employee can then use to obtain the relevant immigration permission from the UK immigration authorities to commence work.
Ukraine
Resolution Tightens Work Permit Requirements
22/05/2009 A new resolution on the work permit system is aimed at protecting the Ukrainian labour market and imposes stricter requirements on foreign workers. Among other things, it imposes new requirements on employees transferred within a company or between companies in the same group.
Germany
ECJ Decision on Central Foreigners' Register
09/01/2009 In December 2008 the European Court of Justice decided that personal data of EU citizens kept by the Central Foreigners' Register must be made anonymous when used for statistical purposes. The data must not be used for crime prevention or investigation, as the register does not collect similar data on German citizens and must not discriminate against EU citizens.
Corporate Tax
Canada
Reporting Requirements for Foreign-Constituted Partnerships with Canadian Partners
31/07/2009 Managers of foreign investment funds must carefully monitor the level of Canadian investment in these funds if they are to avoid exposure to reporting requirements. Under Canadian tax legislation, a reporting entity for a fiscal period is required to file with the tax authorities for that period a prescribed form setting out basic details about the entity, the type of foreign property owned and the income derived from that property.
Foreign Investors Beware Canada's New LOB Provision
24/07/2009 The Fifth Protocol revisions to the Canada-US Income Tax Convention include a comprehensive limitation on benefits (LOB) provision. The new LOB clause presents a significant challenge for foreign investors with US operations that receive cash flows from Canada or proceeds on the disposition of Canadian holdings.
Corporate Reorganization Not GAAR-able
17/07/2009 In a recent case the Tax Court was asked to address whether the corporate reorganization and subsequent recapitalization of a US multinational car parts manufacturer with significant Canadian operations resulted directly or indirectly in a misuse or abuse of the provisions of the Canadian taxing legislation as described in Section 245(4) of the Income Tax Act.
Landrus: Specificity Ousts GAAR
05/06/2009 The Federal Court of Appeal recently affirmed the decision of the Tax Court of Canada in The Queen v Gary Landrus, holding that the general anti-avoidance rule (GAAR) did not deny the deduction of a 'terminal loss' under Section 20(16) of the Income Tax Act. This case is notable for its use of an 'overall results' analysis for the purposes of applying the GAAR.
Courts Validate Use of Intermediary Holding Entity
13/03/2009 A recent Federal Court of Appeal decision provides some certainty for multinationals with foreign holding companies that receive dividends from Canadian subsidiaries. However, the decision leaves open a question about the contractual obligations that a holding company may assume without becoming a mere conduit, agent or nominee acting for the account of a beneficial owner for treaty purposes.
Budget 2009: Canada's Economic Action Plan
13/02/2009 The minister of finance recently tabled the government's federal Budget 2009 entitled "Canada's Economic Action Plan". While the government has not proposed any acceleration or enhancement of the corporate tax reductions which will be fully phased in by 2012, Budget 2009 includes new personal tax reductions and other tax measures totalling C$20 billion which will benefit Canadian taxpayers.
Hungary
Temporary Tax Amnesty Offered for Repatriation of Offshore Profits
30/01/2009 A tax amnesty has been offered for the tax years 2008 and 2009 providing a significantly discounted corporate tax exposure for dividends and certain capital gains received from controlled foreign corporations. The amnesty is primarily intended to attract funds that are trapped in tax havens into Hungary and ultimately foster investment in Hungarian state bonds.
Netherlands
Proposals to Amend Taxation of Interest and Participation Exemption
17/07/2009 The Ministry of Finance has published a consultation document which outlines possible amendments to the corporate income tax treatment of interest and the participation exemption. It is expected that after the 2009 summer recess, a tax bill will be submitted to Parliament based on the consultation document.
Cyprus
Guidance on Margins for Intermediary Financing Vehicles
30/10/2009 The Cyprus tax authorities have recently provided guidance on the parameters to be observed in arriving at the acceptable margin of taxable interest which should apply in transactions involving Cypriot entities as intermediary financing vehicles in back-to-back financing arrangements.
Additional Protocol to Cyprus-Italy Double Tax Treaty Signed
31/07/2009 Cyprus and Italy have signed an additional protocol to their agreement on the avoidance of double taxation. According to the Cypriot minister of finance, the additional protocol will remove Cyprus from Italy's blacklist and resolve outstanding tax issues between the two states.
New Double Tax Treaty Between Cyprus and Czech Republic
10/07/2009 The Ministry of Finance has announced the signing of a new double tax treaty between Cyprus and the Czech Republic to replace the 1980 agreement between Cyprus and the former Czechoslovak Socialist Republic. The treaty is subject to ratification by the legislatures of both countries. If it is ratified before the end of 2009, it will take effect from January 1 2010. This update looks at the key changes introduced by the new treaty.
New Protocol Added to Cyprus-Russia Tax Treaty
12/06/2009 The Cypriot and Russian governments have signed a new protocol amending the existing Cyprus-Russia double taxation treaty. The protocol will not come into effect until it has been fully ratified by the legislatures of both countries. The ratification process is expected to be completed by the end of 2009 and the protocol should come into force during 2010.
Cyprus Removed from Spanish Tax Blacklist
08/05/2009 A recent Spanish legislative change has had a beneficial tax impact on Cyprus resident companies. Despite having complied with all the relevant information exchange requirements, Cyprus was included on the Spanish tax authorities' blacklist of so-called 'tax havens', making various tax benefits and exemptions unavailable to entities that were tax resident in Cyprus. Fortunately, this anomaly has now been resolved.
Overview (April 2009)
03/04/2009 Including: Basis of Taxation; Income Tax; Social Insurance; Special Defence Contribution; Capital Gains Tax; Double Taxation Agreements; Succession Taxes; Advance Rulings; Capital Duty; Stamp Duty; Value Added Tax; Immovable Property Tax; Fees on Transfer of Immovable Property.
Liechtenstein
Government Proposes New Tax Law
13/03/2009 Liechtenstein's tax law dates from 1961 and originates from Swiss tax law. Since 1961 there has been little modification and attempted legislative reforms have failed. However, several years ago Liechtenstein's government recognized the need to adjust tax law in line with changes in the economic and legal environment, both in Liechtenstein and abroad.
Algeria
Further Measures under Complementary Finance Act
11/09/2009 The Complementary Finance Act 2009 covers a range of fiscal measures, including amendments that reflect the government's new policies on the reduction of advantages for direct investment and on limitations on, and increased control over, transfers of funds. The changes particularly affect beneficiaries of tax privileges and parties involved in importing goods and services.
Complementary Finance Act Passed
21/08/2009 The Complementary Finance Act 2009 has significant implications for Algerian and foreign companies. Among other things, this new legislation affects the regime for building and civil engineering contractors, amends the tax consolidation regime, introduces an enhanced tax credit for research and development expenses and allows for revaluations resulting from the adoption of new accounting standards.
New Tax Issues for Foreign Entities and Algerian Companies
14/08/2009 The 2009 Finance Act introduced several amendments that affect foreign entities, typically by either creating a heavier tax burden on foreign investment or introducing new procedural requirements. For example, profits transferred to a non-resident foreign company by its branch established in Algeria or an Algerian permanent establishment are considered distributed profits and are subject to a 15% withholding tax.
Mexico
Income Tax: Anti-avoidance Amendment for Personnel Service Companies
25/09/2009 Personnel services companies have been used in Mexico for many years as a legal and effective means of managing labour-related risks. Unfortunately, in some cases this practice has given rise to abusive schemes in which the real nature of an employment relationship is concealed or misrepresented in order to avoid payroll-related taxes. An amendment to the Income Tax Law has clarified the legal position.
President Faces Uphill Struggle to Implement Tax Reforms
21/08/2009 For the first three years of the Calderón government, a simple majority in the Chamber of Deputies allowed the National Action Party to implement a number of tax measures, including the introduction of a flat-rate business tax. However, the shift in power at the recent elections will make it harder for the administration to introduce the revenue-raising reform programme that Mexico badly needs.
Portugal
Lower Withholding Tax Rate as EU Interest and Royalties Directive Phased In
17/07/2009 The second phase of Portugal's implementation of the EU Interest and Royalties Directive has begun with the entry into force of a lower 5% withholding tax rate. The rate reduction, the introduction of simplified tax forms and the authorities' improved attitude promise companies easier access to greater benefits.
Government Responds to Crisis with Supplementary Budget Law
24/04/2009 The government has approved a supplementary budget law which, among other things, introduces new tax credits in a range of sectors and extends the tax regime for Portuguese-incorporated holding companies to certain EU-incorporated entities. However, a muted reaction suggests that not all companies share the government's confidence in the tax credit regime as an economic stimulus.
Switzerland
Parliament Passes Bill to Overhaul VAT System
04/09/2009 Parliament has passed the Value Added Tax Act Reform Bill. Barring a referendum, this new legislation will completely replace the existing legislation and will introduce significant changes in key areas; businesses will have only a few months to prepare for the transition.
USA
Addressing the Economic Downturn under Existing Transfer Pricing Methods
21/08/2009 The current economic downturn is bringing several basic transfer pricing issues to the fore. These include the ability of controlled taxpayers to modify existing advance pricing agreements to take account of adverse business conditions and to change their existing business structures. Controlled taxpayers and practitioners are also devoting greater attention to the transfer pricing analysis of events.
The High Price of Failing to Disclose Listed Transactions
23/01/2009 In 2004 Congress provided the Internal Revenue Service (IRS) with powerful tools to regulate the perceived proliferation of abusive tax shelters. One of those tools, Section 6707A of the Internal Revenue Code, imposes a significant penalty on taxpayers that fail to disclose a ‘reportable’ transaction to the IRS. Failure to report properly the transaction can have devastating consequences.
Estonia
Income Tax Act Amendments - Effect on Corporate Taxpayers
13/03/2009 In March 2008 Parliament adopted amendments to the Income Tax Act to bring it into compliance with the EU Parent-Subsidiary Directive. Among other things, the amendments introduced an annual taxable period and advance payments for corporate taxpayers. However, following developments in European Court of Justice case law, new amendments have now been adopted.
South Africa
Non-compliant Vendors Could Be Removed from VAT Register
30/10/2009 The South African Revenue Service has announced plans to clean up the value added tax register and remove certain non-compliant vendors. During the first phase of the clean-up process, 20,665 vendors were identified for possible deregistration on account of their potential failure to meet the legal requirements for registration.
SARS Loses Fringe Benefits Case
23/10/2009 Justice Davis recently delivered his judgment in the unreported Vacation Exchanges International (Pty) Ltd v South African Revenue Service, holding that the South African Revenue Service could not hold an employer liable for under-deducted employees' tax where the value of a fringe benefit was redetermined.
Beware Changes to Taxation of Share Schemes
11/09/2009 Employers and employees alike should take note of the recent changes to the tax regime relating to share incentive schemes. The Revenue Laws Amendment Act 2008 contains various amendments to Section 8C which will affect the taxation of such schemes and structures.
Apportionment of Purchase Price
28/08/2009 It is always contentious whether the revenue authorities will accept the allocation of a purchase price paid by a purchaser to a seller in respect of a business. In a recent case the Tax Court indicated that the allocation agreed upon by the parties would be accepted, provided that it complied with the established principles of offer and acceptance.
Amendments to Controlled Foreign Company Imputation System
10/07/2009 In general, South African residents are required to impute into their net income an amount equal to the net income derived by controlled foreign companies (CFCs), to the extent that South African parties collectively hold more than 50% of the CFC participation rights. However, a number of exemptions apply in circumstances where a resident does not need to impute the CFC's income in its own income for tax purposes.
Share Issue Anomalies
12/06/2009 Section 24B of the Income Tax Act has recently been amended in regard to situations where a company acquires an asset from any person as consideration for shares issued by that company. However, the section, which was originally introduced to provide certainty for companies when they issue shares in return for the acquisition of an asset, seems to have created more problems than solutions over the years.
Argentina
Inflation Adjustments: Are They Now Allowed?
25/09/2009 Argentine tax law used to allow inflation adjustments to correct the reporting and taxing of corporate income for inflation on nominal income. When Argentina pegged its currency to the US dollar in 1991, Congress eliminated all types of inflation adjustment. However, while inflation adjustments were unnecessary during the next 10 years, the legislature never actually repealed the income tax rules permitting such adjustments.
Recent Developments in Corporate Restructuring
03/07/2009 Corporate restructurings enjoy special tax treatment under Argentine tax laws. Statutory tax-free status requirements advance various legislative objectives regarding the tax-free reorganization regime. One such goal is to neutralize the taxation of corporate reorganizations to facilitate international cooperation between groups of companies.
Rules on Tax Amnesty, Unregistered Employment and Undeclared Assets Announced
27/03/2009 Congress recently enacted a comprehensive law to induce taxpayers to come clean about undeclared assets and underpaid taxes. The Executive Branch has issued implementing regulations. However, despite the publication of these technical rules, several questions remain, the answers to which could significantly affect the decision making of Argentine economic participants.
Belgium
ECJ Rules on Belgian Participation Exemption Regime
03/04/2009 In Cobelfret v Belgium the European Court of Justice held that the Belgian tax rules on dividends paid between parent companies and their subsidiaries breach EU law. Therefore, Belgium must review its legislation. The judgment will enable parent companies to claim carry-over tax losses to which they are entitled under the correct application of EU law.
Italy
Tax Amnesty Allows Regularization of Undisclosed Foreign Assets and Activities
16/10/2009 The government has enacted a new tax measure to allow Italian individuals and partnerships to repatriate foreign assets held abroad illegally and to regularize foreign operations. A legislative amendment introduces an extraordinary tax on financial activities and assets - including money, shares, bonds, offshore assets, real estate and works of art.
Albania
Shareholder Companies May Reduce Taxable Incomes
06/03/2009 A recent amendment to the Income Tax Law, which also regulates corporate tax, allows companies' taxable incomes to be reduced for the purposes of corporate tax. Albanian companies that hold shares in other companies benefit from this recent amendment in comparison to the tax obligations under the previous law.
France
Holding Shares in Company Devoid of Substance Constitutes Abuse of Law
04/09/2009 A recent Supreme Court decision has confirmed that tax schemes which are devoid of substance and economic justification are abusive. Companies should exercise caution when structuring investments, especially with regard to the location of the intermediate entity. This is particularly true in respect of companies which are active in capital market investments where the human capital is generally limited.
Recent Tax Measures in Reaction to the Economic Downturn
12/06/2009 France has recently adopted several temporary tax incentives in order to deal with the economic crisis. This update looks at the measures, which relate to corporate income tax instalments, the declining-balance depreciation method and the de minimis regulations.
New Legislation Encourages Companies to Invest
06/03/2009 Parliament enacted the Finance Bill 2009 and the Amended Finance Bill 2008 at the end of 2008. In the current economic context the most significant provisions relating to corporate tax aim to encourage companies to invest and to improve their cash flow. However, the legislature has also tried to persuade companies not to enter into excessive compensation arrangements with their directors.
Morocco
Continuing Harmonization of Tax Legislation
03/07/2009 The Finance Act 2009 continues the harmonization of Moroccan tax legislation and aims to centralize all tax legislation into a single document, the General Tax Code. Among other changes, the act provides for the mandatory online filing of tax returns and a new obligation to provide information at the request of the tax authorities.
New Zealand
Amendments Update Double Tax Agreements
23/01/2009 A protocol on the double tax agreement between New Zealand and the United States includes a reduction in withholding tax rates for dividends and royalties between parties to which the agreement applies. New Zealand also updated its agreement with the United Kingdom and concluded an agreement with the Czech Republic.
Parliament Considers CFC Reform
09/01/2009 Parliament is considering radical changes to the controlled foreign companies (CFC) regime that would affect all businesses with operations offshore. Among other things, the proposed changes would introduce an 'active business' test for CFCs, provide an income tax exemption for certain foreign dividends and remove the conduit tax regime.
Sweden
Government to Change Rules on Forbidden Loans
19/06/2009 The government has proposed changes to the taxation of certain loans granted by legal entities equivalent to Swedish aktiebolag (limited companies) to related parties, and plans to stop the deduction of interest paid on such loans. However, certain issues remain unresolved. For example, the question of which foreign legal entities are to be considered equivalent to aktiebolag remains unanswered.
Derivatives
Cyprus
Recent Forex Market Developments
12/08/2009 According to a new regulation, foreign exchange trading transactions now fall within the ambit of the Law on Provision of Investment Services. In practice, the regulation means that the reception, transmission and execution of orders relating to certain financial instruments are considered to be an investment service which can be provided only by an authorized Cypriot investment firm.
Kazakhstan
Tread Warily Following Restructuring of Financial Instruments Legislation
22/04/2009 Amendments to the terminology for financial instruments in the Civil Code could have unforeseen consequences. Previously, the term 'derivative financial instrument' could be held to include derivative securities or derivative contracts, but its definition has been narrowed to cover only contracts. Among other things, this theoretically limits the capacity of Kazakh banks to enter into derivatives transactions.
Panama
National Securities Commission Reverses Position on CFDs as 'Security'
04/03/2009 The National Securities Commission recently issued Opinion 13-2008, offering its administrative position on whether contracts for difference (CFDs) may be the object of a public offering in Panama. The commission has decided to re-evaluate its prior position to make it consistent with criteria that maintain that CFDs are not a 'security' under the definition in the Securities Law.
USA
Off to the Races: Credit Default Swaps
28/01/2009 The credit default swap (CDS) market is the most significant component of the credit derivatives market and has grown considerably in recent years. However, the market has been identified by some commentators as contributing to the financial crisis. This update summarizes the situation regarding the CDS market and the calls for its tighter regulation.
Spain
Contradictory Case Law on Swaps Linked to Loans Granted to General Public
07/10/2009 The debate on the regulation of derivative products has always existed and remains unresolved. However, without underestimating the importance of regulation and the usefulness of adequate external control, strict internal control is essential to prevent new financial scandals as experts warn of a lack of understanding of financial instruments and a tendancy to focus on the product, not the customer.
British Virgin Islands
Metavante and ISDA Master Agreement: BVI Perspective
28/10/2009 The judge responsible for the Lehman bankruptcy proceedings recently held that Metavante Corporation could not rely on Section 2(a)(iii) of the International Swaps and Derivatives Association Master Agreement to suspend payments. Historically, a BVI court would uphold the contractual provisions of Sections 2(a)(iii) and 6(a) on the occurrence of a Section 5(a)(vii) bankruptcy event in respect of a BVI counterparty.
France
Over-the-Counter Market Clearing Accepted
18/02/2009 At the 2008 annual public meeting of the Autorité des marchés financiers (AMF), market professionals approved the European Commission's proposals demanding the introduction of a centralized clearing house for credit default swaps. The AMF put in place a working group to draft its own proposals by the end of 2009.
E-commerce
Finland
Domain Name Act Amended
09/07/2009 From September 2009 the validity period for Finnish domain names will be extended to a maximum period of five years at a time. Under the amended Domain Name Act it will be possible to reserve '.fi' domain names or a period of one, three or five years at a time.
France
Court Rules Search Engines Not Obliged to Monitor and Control Indexed Results
07/05/2009 Search engines are not subject to a statutory liability regime. In a recent case the Paris Court of Appeal reiterated several rules relating to the technical role of a search engine. Within this framework, the court reiterated search engines' obligations and then determined how they may be held liable.
India
Tackling Online Gambling
28/05/2009 With the emergence of the Internet, gambling and betting have become borderless activities, as websites set up anywhere in the world can solicit and play host to such activities, even in jurisdictions where they are banned. Although there are no laws that specifically ban online gambling, the official government stance is that the existing laws governing gambling offline are also sufficient to curb gambling online.
Norway
Government Proposes Advisory Committe for Defamatory Information Online
02/07/2009 The number of people who find that defamatory information about themselves is available on the Internet is increasing. The government proposes that a committee should answer questions on violations on the Internet. Its primary aim will be to provide telephone and email advice to the general public to determine whether a published piece of information contravenes any relevant legislation.
Italy
Online Cash Gaming and Taxation Changes
30/07/2009 New legislation that allows for new online lotteries and new means of playing lottery-style games is likely to introduce online cash gaming in Italy. Other provisions implement changes in taxation and allow for measures to give operators greater choice in the betting products that they offer. However, the State Monopolies Authority retains broad control over the sector.
Netherlands
Dedicated Search Engines Seek Relief
14/05/2009 A district court recently decided in AutoTrack v Gaspedaal that Autotrack had made a substantial investment and that Gaspedaal had made a substantial part of AutoTrack's database accessible to the public, resulting in damage to Autotrack.
Germany
Data protection policy and terms of service for online service providers
08/10/2009 Google, a leading online service provider in Germany (among other countries), has been exposed to legal action on various aspects of its business regarding the terms of service relating to its use of data generated by its users. A recent decision of the Hamburg Regional Court raised fundamental questions regarding data protection and the validity of terms and conditions for online service providers.
Korea
Amendment to Internet Address Resource Act Announced
03/09/2009 An amendment to the Internet Address Resource Act which will provide protection for domain names in Korea was recently announced. Petitioners filing actions under the Uniform Domain Name Dispute Resolution Policy may now also raise a claim under the Internet Address Resource Act since its scope has been extended to cover not only country-code top-level domain names, but also generic top-level domain names.
Turkey
Consequences of Forwarding Spam Emails
05/03/2009 If a spam email containing defamatory information is forwarded, after just one day the company targeted by that email could face significant damage to its reputation among customers, thus losing market share. The introduction of Law 5651 has made it possible to bring criminal prosecutions against those who create and forward spam emails, as well as filing compensation claims against them.
Austria
Prohibiting Domain Names Based on Another Person's Name Rights
06/08/2009 In a conflict between a domain name and another person's trademark the content of the domain is key. In a recent decision the Supreme Court had to decide whether to apply the same principle if the conflict is between a domain name and another person's name.
United Arab Emirates
'.ae' Domain Administration: one year on
24/09/2009 August 2009 marked one year since the '.ae' Domain Administration (.aeDA) registry system went live. This update provides some background to the .aeDA, along with information relating to '.ae' domain name eligibility. It also looks at the '.ae' dispute resolution policy and briefly contrasts this with domain name dispute procedures in other Gulf Cooperation Council countries.
Employment & Labour
Brazil
Labour Court Reserves Right to Determine Employment Relationships
09/09/2009 The Fourth Labour Court of Vitoria has held that only a labour judge is competent to declare the existence of an employment relationship between parties, thus invalidating two notices of infraction issued by a Labour Ministry inspector recognizing an employment relationship between the company and its contractors.
New Legislation on Temporary Expatriation of Brazilian Employees
05/08/2009 Law 7,064 originally regulated the temporary expatriation of employees of engineering companies. Through the enactment of Federal Law 11,962/2009, the regulation now applies to any employee who is temporarily expatriated from Brazil. Generally, the law provides that Brazilian labour law shall apply if it is more favourable to the expatriated employee than the foreign law.
Labour Liabilities of Distressed Companies Under Reorganization
08/07/2009 According to the Labour Code, anyone that acquires a company or its shares will also acquire the target company's labour liabilities, regardless of any agreement executed with the seller. This concept is applied strictly by the labour courts to prevent fraudulent acts against employees. However, the new Bankruptcy and Reorganization Law provides for an exception to this traditional concept of succession.
Harassment in the Workplace
10/06/2009 Heavy workloads imposed by competitive and demanding work environments can have an impact on employees' mental health. While at present there is no specific Brazilian legislation that describes harassment as illegal conduct which may affect the health of employees, employers should not ignore the risks of harassment in the workplace.
New Perspectives on Mass Layoffs
13/05/2009 The employment law does not provide for cases of mass layoffs - moreover, no legal definition of such activity is given. Recent decisions have raised the question of whether the Brazilian labour courts are setting a new trend regarding employee protection in cases of mass layoffs.
Legislative Bill to Introduce New Conditions for Outsourcing
01/04/2009 Outsourcing has always been a delicate issue in Brazil, since many companies employ it fraudulently. Even though it is designed to improve a company's services through the specialization of activities, many consider it a way to reduce labour costs, in contravention of Labour Law stipulations. A bill is pending at the Labour Ministry which, if approved, will significantly change the regulations applicable to outsourcing.
Italy
Supreme Court to Reconsider Timeframe for Contesting Dismissal
17/06/2009 A line of court decisions has established that if a dismissed employee wishes to contest his or her dismissal, the employer must receive a communication contesting the dismissal within 60 days, otherwise the objection is null and void. However, two recent Supreme Court decisions mark a significant divergence from previous practice.
Discrimination and Harassment: The Role of the Equal Opportunities Adviser
03/06/2009 In implementing the principle of equal treatment for men and women in employment matters, the Supreme Court has recognized the right of an equal opportunities adviser to act as aggrieved party in criminal proceedings and to claim damages as an interested party in a case arising from collective discrimination in the workplace.
Can Constructive Dismissal Amount to 'Mobbing'?
20/05/2009 The Supreme Court has held that a sequence of disciplinary measures can be considered victimization if they are groundless, disproportionate or manifestly exaggerated and are intended to bring about the employee's resignation or dismissal. The court found that such behaviour amounts to 'mobbing' - the term commonly used in Italy to describe bullying in the workplace.
Privacy Authority Rulings on an Employee's Right to Access Personal Data
13/05/2009 Recent decisions of the Privacy Authority and the Supreme Court emphasize that employees' personal data must be carefully managed. Employers must take particular care to comply with the rules applying to data processing and the electronic circulation of personal data.
Stricter Supreme Court Rulings on Liability for Injury in the Workplace
14/01/2009 Two Supreme Court decisions on an employer’s liability for injury in the workplace mark a departure from previous court decisions that punished employers only if they had violated standards imposed by law. Moreover, they establish that an employer cannot avoid liability simply by offering training and information.
Austria
Whistleblowing Hotlines: Employment and Data Protection Issues
28/10/2009 Following the demise of Enron and ensuing US legislation, US companies have introduced mechanisms to safeguard the compliance of their European operations with the new legal framework. Such mechanisms have included implementing codes of conduct or ethics, which often provide for a whistleblowing hotline. The issue of whether the implementation of such codes is in line with Austrian legislation is twofold.
Supreme Court Rules on Inadequate Publication of Collective Agreement
29/07/2009 Under Austrian rules on collective bargaining, certain matters that affect the interests of staff are subject to regulation at plant level. Section 30 of the Labour Relations Act specifically requires that employers must make employees aware of any such plant agreements. In a recent Supreme Court case the employer failed to publish a plant agreement adequately, costing it dearly.
Kurzarbeit: An Alternative to Lay-Offs
27/05/2009 In response to the global economic downturn, Austria has in place a system wherein employers are permitted to reduce their employees' working hours while keeping the employment relationship intact. In accordance with this system, employers pay their employees government-subsidized special allowances instead of regular pay in order to cover most of the earnings shortfall.
Self-employed Eligible for Unemployment Benefits
04/03/2009 Unemployment insurance is compulsory for all employees. Employers and employees must each contribute 3% to the social security provider. Since January 1 2009 self-employed indiviuals can opt into the system. It is hoped that this support programme will foster entrepreneurship and expand the Austrian social system.
China
Email Communications Can Constitute Employment Contract
16/09/2009 The Changning District People's Court in Shanghai has reportedly ruled that an employment contract was agreed when an offer emailed from an employer to a job applicant was accepted by email. Central to the decision was the fact that the content of the offer letter sufficed as an employment contract, since it contained provisions on starting date, job position, working location and compensation, among other things.
Supreme People's Court Urges Counter-crisis Approach to Employment Disputes
09/09/2009 Recent guidance from the Supreme Court instructs lower courts to consider the development of enterprises as well as workers' rights in resolving employment disputes and to have regard to the government's counter-crisis policies in addition to laws and regulations. This appears to be another step back from the rule of law, with courts being urged to follow political considerations in deciding employment cases.
Tax Changes Could Raise Cost of Expatriate Secondments
09/09/2009 Many multinational companies assign personnel from foreign group companies to take positions in their Chinese subsidiaries under secondment arrangements, but a new tax audit programme may raise the cost of doing so. Multinational companies could face a difficult choice between an additional tax burden and the application of Chinese employment law.
Employer Cannot Dismiss Unmarried, Pregnant Employee
26/08/2009 A court in Zhejiang province has found that an unmarried, pregnant employee was unlawfully terminated from her employment on the basis of her violation of China's family planning rules. The woman was reinstated, then dismissed again for taking unauthorized leave after the birth of her child. The court found her termination for unauthorized absence unlawful and awarded her Rmb30,000 in severance.
Court Decisions on Meaning of 'Equal Pay for Equal Work'
12/08/2009 A district court in Jiangsu province recently ruled that the 'equal pay for equal work' rule does not require that employees holding the same position be paid equally. Instead, employers are permitted to compensate employees holding the same job differently depending on factors such as their skills and productivity.
Unions Flex Muscles at Wal-Mart China
05/08/2009 Local unions reportedly played a key role in the decision by retailer Wal-Mart to abandon its attempt to eliminate assistant manager positions at all of its stores in China. However, employees affected by a new plan not to renew employment contracts may find the company's decision harder to challenge.
Finland
Supreme Court Rules on Employers' Obligation to Treat Employees Equally
21/10/2009 The Employment Contracts Act imposes an obligation on employers to treat employees equally with regard to benefits. In a recent case, the Supreme Court ruled that a construction company was not entitled to offer its entire clerical staff a superior level of occupational healthcare to that offered to its construction workers, since it had not shown that the clerical staff were strategically important employees.
Cancellation of Employment Contract During Probationary Period
19/08/2009 The Supreme Court recently made a key ruling regarding the use of probationary periods, cancellations of employment contracts during such periods and the allocation of the burden of proof in disputes arising from contracts terminated during probation periods.
Termination of Employment in Connection with Transfer of Business
10/06/2009 A recent case before the Supreme Court addressed the question of whether an employee is entitled to indemnity which corresponds to the compensation for unlawful termination of his or her employment contract in cases where the employee terminates the employment contract due to the deterioration of his or her working conditions resulting from a transfer of business.
Supreme Court Rules on Unilateral Changes in Terms of Employment
01/04/2009 In a recent case the Supreme Court ruled that the office manager's managerial role meant that he did not belong to the same occupational group as a shop steward. As a result, it held that the employer was justified in changing the terms of his employee's contract unilaterally in order to relocate and rearrange work assignments, irrespective of the employee's status as a shop steward.
Supreme Court Clarifies Fundamental Characteristics of Employment Relationships
04/02/2009 To fulfil the definition of an employment relationship, the employment must be based on an agreement whereby the work is done on another's behalf in return for pay or other remuneration. A recent case concerned whether the contractual relationship between two parties was to be considered an employment relationship.
Netherlands
Termination of Employment Agreement at 65
07/10/2009 Discussions are taking place on the government's plan to increase the pension age under the General Old Age Act from 65 to 67. Although there is no legislative proposal as yet, such an increase is unlikely to affect the debate on the forced termination of employment agreements.
Partial Unemployment Benefits Decree Aims to Maintain Skilled Employees
06/05/2009 As of March 21 2009 employers can no longer opt for the special working hours reduction. However, in response to the ongoing economic crisis, the government has introduced a subsequent measure - the Partial Unemployment Benefits Decree, which has now come into effect.
Right of Works Council to Speak at General Meetings
18/03/2009 The House of Representatives is considering a legislative proposal intended to provide works councils of public limited companies with the right to speak in respect of proposed resolutions of the general meeting regarding, among other things, the company's remuneration policy and the appointment, suspension and dismissal of board members.
Turkey
Short-Time Working under the Labour Law
08/07/2009 In order to prevent collective redundancies in an unexpected economic crisis and to reduce adverse effects on employees, employers may take measures to protect employees by employing them for shortened periods. Provisions regarding short-time working are presently regulated under the Unemployment Insurance Law and the Regulation on Short-Time Work and Short-Time Work Payment.
New Legislation on Subcontracting Relationships Introduced
08/04/2009 The new Regulation on Subcontracting Relations recently entered into force. It intends to tackle the problems that arise in subcontracting by emphasizing and clarifying the restraints imposed by the Labour Law on the use of subcontracted labour and the regulatory obligations of employers and subcontractors.
USA
No Harassment in Asking Receptionist to Get Coffee
21/10/2009 A federal district court has ruled that asking a female receptionist to make and serve coffee to male supervisors does not constitute sex discrimination or sexual harassment. However, managers and supervisors must consider whether it is appropriate to ask support staff of either gender to get or serve them beverages or meals, unless it is part of a formal client meeting.
Court Finds No Employer Retaliation in Terminating Harrassed Employee
14/10/2009 In an environment of increasing employer caution about retaliation claims, a Florida federal district court has vindicated one employer's decision to take disciplinary action against an employee who had complained of discrimination but subsequently engaged in misconduct with respect to her alleged harasser.
EEOC Issues New Guidance on Religious Discrimination
15/07/2009 The Equal Employment Opportunity Commission (EEOC) has updated the religious discrimination section of its Compliance Manual, detailing its policy on what constitutes religious discrimination under Title VII. The section analyzes various fact patterns and summarizes case law and areas in which the EEOC's position differs from legal precedent.
Applying Performance and Conduct Standards to Disabled Employees
15/07/2009 The Equal Employment Opportunity Commission guidance on the application of the Americans with Disabilities Act to situations in which an individual's disability may impact on his or her performance assists employers struggling to understand when to provide a reasonable accommodation and when disciplinary action is warranted, among other things.
Emails that Modify Employment Agreements Can Satisfy Frauds Statute
08/07/2009 A New York court recently held that emails constituted "signed writings" and served to modify an employment agreement even though the employment agreement required that any modifications be in writing. The court viewed the typed name of the sender at the bottom of an email message as sufficient to serve as a signature.
Genetic Information Non-discrimination Act Impacts on Employers
08/07/2009 The Genetic Information Non-discrimination Act prohibits employers from discriminating against employees on the basis of genetic information, including the results of genetic tests of employees or their family members, and the existence of any condition in family members. It further limits employers' ability to gather genetic information on their employees.
Australia
Exposure Draft of Model OHS Act Released for Public Comment
14/10/2009 Safe Work Australia has released the exposure draft of the model occupational health and safety legislation for public comment. This update provides an overview of some of the key proposals in the model act, including provisions on the primary duty of care, incident notification, the regulator's enforcement and information-gathering powers, and offences and penalties.
Model OHS Laws - One Step Closer to Becoming a Reality
17/06/2009 The Workplace Relations Ministers Council has agreed to a framework for model occupational health and safety (OHS) laws and has given instructions for the drafting of model OHS laws to commence. During a recent meeting the council provided its response to the recommendations of the Panel for the National Review into Model OHS Laws regarding the optimal structure and content of a model OHS act.
Workplace Relations Transitional Bill Introduced
15/04/2009 The Fair Work Bill has passed through the Senate after an agreement was reached with Senator Steven Fielding on phasing in its definition of a 'small business' for the purpose of excluding unfair dismissal claims. The agreement means that the government can implement its timetable of amendments to unfair dismissal and enterprise bargaining laws from July 1 2009.
Harmonization of Occupational Health and Safety Laws - Second Report
08/04/2009 The National Review Panel into Model Occupational Health and Safety Laws has delivered its second report. This update provides a preliminary summary of the key recommendations in the report, including recommendations regarding definitions of certain terms, the roles of inspectors and codes of practice.
Overview (January 2009)
21/01/2009 Including: National Review of Model Occupational Health and Safety Laws; Safe Work Australia Bill; Fair Work Bill 2008.
Canada
Court of Appeal Strikes Down Workers' Compensation Board's Mental Stress Policy
28/10/2009 A successful charter challenge to the British Columbia Workers' Compensation Board's mental stress policy has resulted in a direct change to British Columbia's policy on the complex issue of determining entitlement to workers' compensation benefits for work-related mental injuries. It may also herald challenges to the manner in which all Canadian workers' compensation boards adjudicate mental stress claims.
Kerry: Supreme Court of Canada Brings More Good News for Pension Plan Sponsors
26/08/2009 The Supreme Court decision in Nolan v Kerry (Canada) Inc provides much-needed clarity with respect to payment of expenses from pension funds and gives timely support for employers' use of surplus assets in both defined benefit and defined benefit/defined contribution pension plans.
Impact of the Global Financial Crisis on the Labour Market
03/06/2009 The impact of the global economic crisis has reached the Canadian labour market. Employers that are thinking of reducing their workforces as a strategy for coping with the economic crisis would be well advised to consider their potential liability under common law and statutory regimes before taking such action, and to craft severance packages that will comply with their legal obligations in advance of initiating any dismissals.
Another Court Refuses to Enforce Trade Union Fines
14/01/2009 The Ontario Court of Appeal has ruled that trade unions may not resort to the courts to enforce fines levied against workers who choose to cross picket lines during a work stoppage. While the court acknowledged the importance of solidarity to trade union activities, it sent a clear message that trade unions should re-think their strategies for promoting solidarity.
Isle of Man
Annual Leave Entitlement and Long-term Sickness: The Manx Difference
02/09/2009 In Stringer v HM Revenue and Customs the House of Lords ruled that an employee accrues statutory holiday throughout any periods of sickness and that such accrued holiday is to be paid in lieu in the event that the employee's contract of employment is terminated. However, the Manx Department of Trade and Industry has since clarified that this judgment does not apply in the Isle of Man.
Tribunal Rules: All Change for 2009
18/03/2009 The employment tribunal is a less formal setting for resolving employment disputes than the High Court. A number of significant new labour law rights granted in the Employment Act 2006 have increased the workload of the tribunal. As a result, the rules on tribunal procedure were updated and have been in force since January 31 2009.
Appeal Court Clarifies Work Permit Appeal Procedure
04/02/2009 The Court of Appeal has clarified the procedure to be adopted when a party wishes to appeal to the High Court a decision of the island’s Work Permit Appeal Tribunal. Interim decisions of the tribunal cannot be appealed until the tribunal has reached its final decision on the appeal it is hearing.
Mexico
Social Security Law Changes on Subcontracts and Outsourcing
27/05/2009 A decree to amend various provisions of the Social Security Law further regulates outsourcing and establishes various mechanisms which strengthen the regulatory powers of the Social Security Institute. However, the new obligations imposed on personnel services providers and companies that use them may be unconstitutional
Social Security Institute: Leniency for Employers
29/04/2009 The Technical Board of the Social Security Institute has published a resolution that introduces provisions to help employers wishing to regularize their status with the institute. Employers may apply for a reduction in, or even complete immunity from, fines in respect of non-payment of social security contributions.
New Bill to Implement Counter-crisis Social Security Plans
18/03/2009 The government's counter-crisis programme includes provisions that make it easier for unemployed workers to draw on their benefit entitlement. A bill to amend the Social Security Law sets out the revised terms for access to such benefits, as well as proposing a change to federal social security contributions that would benefit nearly 95% of the 15 million workers registered with the Social Security Institute.
Secret Ballots in Inter-union Conflicts: A First Step Towards Union Democratization
04/03/2009 The Supreme Court has issued a resolution to resolve a case concerning the process whereby employees may vote for a union to represent them. The court definitively established that the Labour Authority must guarantee that the voting process in an inter-union conflict allows workers to express their union preference in a personal, free, direct and secret ballot.
Counter-crisis Programme Offers Hope for Labour Market
11/02/2009 The government has responded to the international financial crisis by announcing its National Programme to Foster Family Finances and Employment for Improved Living Standards, a five-point package of measures designed to boost employment and sustain levels of family income.
Overtime and Social Security Contributions: Do the New Regulations Go Too Far?
04/02/2009 The Social Security Institute has issued new regulations on the addition of overtime pay to basic salary for the purpose of social security contributions. However, as its communiqué appears to contradict the terms of the Social Security Law on overtime pay, employers may have reasonable grounds for a legal challenge if the institute attempts to enforce the regulations.
South Africa
Overview (October 2009)
21/10/2009 Including: Legislation and Agencies; Worker Representation; Applicants; Hiring Employees; Terms of Employment; Employers' Liability for Employees' Actions; Taxation of Employees; Employee-Created Intellectual Property; Business Transfers; Termination of Employment; Dispute Resolution; Trends.
Do Tax Changes Mean End of Travel Allowances and Medical Benefits?
30/09/2009 The Taxation Laws Amendment Bill 2009 contains a number of proposals affecting employees. The two most significant proposals affect employees with a travel allowance, and employer contributions to medical aid. Employers should be aware of a number of issues which may arise from the proposed legislative changes.
Communication with Employees in Business Transfers
16/09/2009 Contracts of employment transfer automatically to the purchaser when a business (or part of a business) is transferred as a going concern. There is no requirement to obtain the agreement of employees to effect the transfer; it occurs by operation of the law. However, proper communication with employees is key to the avoidance of disputes, even when there is no legal requirement to do so.
When Employees Fail to Give Proper Notice
22/07/2009 A recent Labour Court case highlights two important issues for employers. First, employers should clearly stipulate what they mean by a 'calendar month's notice' if that term is used when formulating employment contracts. Second, before considering going to court to claim breach of contract, employers should be sure that they have suffered a loss and can prove the extent of the loss.
Swine Flu and Employers' Health and Safety Obligations
24/06/2009 Employers should take steps to educate employees and to prepare for the impact of a swine flu outbreak in the workplace, especially in high-risk workplaces, such as hospitals, medical offices, schools and workplaces that provide services to high-risk populations. However, it is important that employers help employees to avoid undue fear by creating a response plan.
Disciplinary Hearings Should Not Be Over-complicated
10/06/2009 In Trustees, National Bioinformatics Network Trust v Jacobson the judge harshly criticized the employer because it had ignored the guidelines laid down in the Code of Good Practice for Disciplinary Hearings. Employers should think twice before making an internal disciplinary process too complex and should be wary of trying to review commissioners' rulings before arbitration proceedings have been completed.
Spain
Unilateral Amendments of Contractual Working Hours by Employees
26/08/2009 In recent years the governments of developed countries have focused on helping employees to achieve a work-life balance. In pursuit of this goal, several Spanish laws and regulations have been amended or issued and various court resolutions and judgments have been passed in order to improve and define clearly the scope and limitations of the rights set forth in Spanish law regarding work-life balance.
Administrators' Remuneration Must be Determined in Bylaws to Allow Offsetting
18/02/2009 The Supreme Court has recently issued two decisions regarding administrators' remuneration in public limited companies. The decisions clarify that administrators' remuneration cannot be offset from corporate income tax because the amount of such remuneration is not clearly determined in advance in the company's bylaws.
Data Protection Agency Clarifies Employee Data to be Transferred by Contractors
14/01/2009 The Data Protection Agency has declared that principals in a contracting relationship are not entitled to access contractors’ employees’ payslips or TC2 social security payment forms because these documents include personal data that is protected by the Data Protection Act and the Workers Statute does not provide for such disclosure.
Switzerland
Supreme Court Rules in Favour of Diplomatic Domestic Servants
07/10/2009 The Geneva Employment Appellate Court has ruled that a domestic servant employed by a foreign diplomatic household in Geneva can claim a full-time salary despite being employed on a part-time basis. The decision was based on the fact that the guidelines on the private employment of domestic household staff by foreign diplomats provided entitlements that could be claimed between private employers and employees.
New Compensation Regulations Issued for Swiss Banks and Insurance Companies
26/08/2009 FINMA, the supervising authority for banks and insurance companies, has issued new compensation regulations. Unlike other comparable international legislation, the regulations will apply not only to large banks with so-called 'systemic risks', but to all financial institutions supervised by FINMA.
Germany
Courts Rule on Employee Protection during Transfers of Business
14/10/2009 A recent European Court of Justice ruling has widened the requirements dictating whether a transfer of business has taken place, thereby extending the protection afforded to employees by Section 613 of the Civil Code. The Federal Labour Court ruled on the forfeiture of the employee's right of objection against the transfer of his or her employment relationship as a consequence of a transfer of business.
Post-contractual Non-competition Clause
09/09/2009 Once an employment contract has ended, an employee is not prevented from using the experience, knowledge and skills gained during his or her time working for the previous employer in order to, for example, solicit its customers. The only way to avoid this scenario is to stipulate a post-contractual non-competition clause. This update outlines the main requirements, advantages and disadvantages of such clauses.
Employee Rights During the Restructuring of Insolvent Companies
26/08/2009 In times of economic and financial crisis an increasing number of companies are affected by insolvency. Insolvency generally goes hand in hand with restructuring, which in turn often necessitates redundancies. This update outlines a number of employment-related issues which arise when a company files for insolvency.
New Pay Framework Rules Adopted
05/08/2009 During the global financial crisis, the remuneration of senior managers – rather than the guaranteeing of the long-term continuity of an employer's operations – has increasingly become a focus of attention, particularly when the keywords 'greed' and 'short-term bonus realization' are mentioned. In response, Parliament has begun to take measures aimed at ensuring the reasonableness of pay structures.
Crisis or Opportunity? Staff Structure Following Reorganization of a Company
17/06/2009 In times of financial crisis it is important that employers are able to divest themselves of underperforming employees. Nevertheless, at the same time it is in the interests of employers to retain or even hire key employees while reducing the overall size of their workforce. This update explores the idea that the financial crisis could represent an opportunity for employers to improve the competitiveness of their workforces.
EU Working Time Directive Precludes Vacation Act
01/04/2009 In a preliminary ruling according to Section 234 of the EC Treaty, the European Court of Justice has decided that Articles 7(1) and (2) of the EU Working Time Directive preclude national laws which provide that an employee's entitlement to paid annual leave which he or she was unable to take due to incapacity for work because of illness extinguishes at the end of the current calendar year or at the end of a carry-over period.
Ireland
Pension Schemes: Recent Developments
30/09/2009 New legislation has been introduced which significantly amends a number of areas of the Pensions Act. These measures have been primarily introduced in response to a European Court of Justice decision in relation to the state's obligations under the EU Insolvency Directive and the funding crisis in which many defined benefit pension schemes in Ireland find themselves.
Labour Court Issues First Opinion on Exceptional Collective Redundancies
09/09/2009 The Labour Court has ruled that notified redundancies could amount to exceptional collective redundancies provided that: (i) they were implemented following a refusal by the relevant employees to accept proposed changes to their terms and conditions of employment, and (ii) the employer subsequently replaced the redundant employees with other employees on less favourable terms and conditions.
Employment Agencies Regulation Bill Published
22/07/2009 The main purpose of the Employment Agencies Regulation Bill is to strengthen the regulatory framework for the operation of employment agency services by requiring employment agencies to be licensed in Ireland. The licensing requirement applies to both Irish and foreign-based employment agencies.
No Redundancy Entitlement for Employees Refusing to Transfer
08/07/2009 In a recent decision the High Court has clarified the fate of employees who object to moving to a new employer in circumstances in which their jobs are outsourced as part of a transfer of undertakings. This issue had become a matter of particular concern for employers following a 2007 Employment Appeals Tribunal decision.
EAT Finds Employer's Conduct Regarding Redundancies to be Unreasonable
17/06/2009 The Employment Appeals Tribunal (EAT) recently held that redundancies were not genuine in a case in which the work that the employees had been doing was subsequently completed by a subcontractor. The decision serves as a reminder that the EAT is prepared to rule that individual redundancies are unfair if it views the employer's conduct in relation to the dismissals to have been unreasonable.
National Employment Rights Authority: Latest Developments
10/06/2009 The Employment Rights Compliance Bill 2008, which will place the National Employment Rights Authority (NERA) on a statutory footing, is expected to be enacted by the end of July 2009. One of the purposes of the bill is to strengthen the powers of NERA's labour inspectors.
Luxembourg
Framework Agreement Redefines 'Moral Harassment'
16/09/2009 A recent agreement has implemented the framework agreement on harassment and violence at work that was concluded by the European social partners. It is the first Luxembourg labour regulation to provide a general definition of the term 'moral harassment' that is not limited to harassment based on discrimination.
Data Protection Regulator Issues Guidelines on Workplace Cybermonitoring
09/09/2009 The National Commission for Data Protection has drafted guidance on the complex issue of cybermonitoring in the workplace. The guidance, which was prepared in response to numerous authorization and information requests received by the commission, seeks to strike a balance between the employer's legitimate interests and the employee's right to privacy at work.
Cessation of Employment Contracts in Bankruptcy or Winding-Up
29/07/2009 Where an employer ceases business as a result of bankruptcy, employment contracts are terminated immediately, but what is the position in the event of a winding-up? The Labour Court has sought to clarify the position of an employee on parental leave, a staff delegate and a pregnant employee who enjoyed legal protection against dismissal at the time when their employer was wound up.
Remuneration and Illness: Responsibilities for Employers and Employees
27/05/2009 A High Court decision confirms an employee's position under Article L121-6(3) of the Labour Code in respect of remuneration for an employee who has been absent from work through illness. It also underlines an employee's obligation to submit a medical certificate by the required date.
Proof of Payment of Salary
13/05/2009 In the event of a dispute over a salary payment, an employer must be able to show proof of payment to the employee. A High Court case has confirmed that the mere fact of accepting a payslip does not constitute proof that the employee received the payment, unless the payslip contains the words 'received the above amount', immediately followed by the employee's signature.
Single employment status: the end of blue and white collars
28/01/2009 The law on the single employment status came into force on January 1 2009, although the provisions governing the setting up of new institutions or the election of staff delegations have been enforceable since May 15 2008. The law modifies the Labour Code and the Social Insurances Code and ends the inequitable distinction between blue and white-collar workers.
Belgium
Discrimination in Absence of Identifiable Victim: New Decision in Feryn
07/10/2009 The Brussels Labour Court of Appeal has issued a fact-based decision in the Feryn Case, which arose from a director's statement that his company would not recruit "immigrants". The European Court of Justice had previously found that such public statements are not only discriminatory in themselves, but can also constitute sufficient grounds to presume that a recruitment policy is directly discriminatory.
Counter-crisis Law Allows Employers to Cut Working Time and Suspend Contracts
26/08/2009 Recent legislation allows companies in difficulty to make temporary adjustments to their working capacity in order to retain employees who might otherwise have to be dismissed. In certain cases companies may reach individual agreements to reduce an employee's working time or impose a total or partial suspension of their white collar workers' employment contracts.
Economic Stimulus Legislation Introduces Generation Pact Changes
12/08/2009 A new law has modified the Law of December 23 2005, known as the 'Generation Pact'. It broadens the applicability of employment policies for employers that are undergoing restructuring and have announced collective dismissals. Certain rights for workers who would otherwise qualify for early retirement benefit after dismissal are now available to all employees.
Collective Bargaining Agreement Makes Drugs and Alcohol Policy Compulsory
27/05/2009 The National Employment Council's new collective bargaining agreement requires all private sector companies to implement an alcohol and drugs policy. The model policy has a preventative approach, but its provisions on testing explicitly exclude negative consequences for employees and the requirement to obtain the employee's consent may limit the measures available to an employer.
Parliament to Debate Draft Law on Termination Indemnities
04/02/2009 In response to growing public concern, the government has proposed a draft law to limit 'golden parachute' packages for senior executives. Although the purpose of the draft law is clear, it creates a broad distinction in treatment between white-collar workers depending on whether they fall within its scope or are covered by the general employment legislation.
Iraq
The Labour Code Outlined
17/06/2009 As the security situation in Iraq has eased, the amount of interest in international direct investment has increased. However, many international corporations have expressed a desire not to be subject to the general laws in force regulating domestic employment relationships. This is because with its socialist background, Iraqi labour law is generally highly protective of employees and makes termination difficult.
Norway
Supreme Court Decision on Temporary Employment
02/09/2009 It is set out in non-statutory law that where there is a permanent absence of a certain scope in the undertaking, the employer must employ on a permanent basis in preference to temporary employment. A recent Supreme Court judgment clarified the state of the law both in this regard and with regard to the regulation on temporary employment that lasts for more than four consecutive years.
Requirements for Temporary Lay-Offs
10/06/2009 A 'lay-off' is a temporary suspension of the employment relationship and is typically used when an undertaking must reduce or halt its activities for a limited period of time. Temporary lay-offs may be used as an alternative to a permanent reduction of the workforce when it is clear that the company will need the workforce again following a period of reduced need.
New Legislation on Employers' Access to Employee Emails
22/04/2009 New regulations on employers' access to employee emails recently came into force. The new regulations are part of the Regulations on the Processing of Personal Data, which are permitted by the Personal Data Act, and provide more detail than previous legislation. However, the regulations comply to a certain extent with what was previously considered applicable under non-statutory law and the practice of the Data Inspectorate.
Annual Holidays Act Amended
11/03/2009 Recent amendments to the Annual Holidays Act secure employees' annual holiday leave. Both employer and employee now have greater obligations to ensure that annual holiday is taken each year, an upper time limit has been introduced to the agreements concerning the taking of holidays in advance and the date affecting which employees are eligible for six working days of extra holiday has been changed.
Trade Union Not Authorized to Place a Tariff Fee on Unorganized Labour
07/01/2009 A recent judgment pronounced by the Supreme Court has declared a Norwegian trade union unauthorized to charge unorganized labour for the benefit of the union’s collective agreements. The main question in the case was whether the charges were in conflict with the employees’ freedom to organize.
Sweden
Employers' Restructuring Options during the Economic Crisis
28/10/2009 During Spring 2008, unemployment in Sweden reached its lowest level in several years. By Spring 2009, the situation had turned into an employment crisis, comparable to that of the early 1990s. This update discusses the impact of the crisis on the Swedish labour market and outlines some opportunities for employers to reduce workforce-related costs without resorting to dismissals.
Redundancies: Re-employment versus Seniority Principle
09/09/2009 An employer considering implementing reductions in its workforce must consider two key elements of employee protection – the entitlement to be re-employed and the so-called 'seniority principle'. A recent Employment Court decision clarified the issue of whether an employee who has refused the offer of a position based on the entitlement to be re-employed should be considered when applying the seniority principle.
Commission Policies: A Ticking Timebomb?
27/05/2009 The employment terms imposed by many companies, whether under a general commission plan or in individual employment contracts, can entail major unforeseen costs in the form of retroactive claims from employees for holiday pay or pension payments. A cornerstone of the Annual Leave Act is the principle that all remuneration from an employer must be used as the basis for holiday pay
Did Employer’s Failure to Provide Rehabilitation Constitute Constructive Dismissal?
11/02/2009 According to the preliminary works of the Employment Protection Act and the principles established by the Labour Court, an employee’s resignation from employment may, in some circumstances, constitute constructive dismissal. For this to be the case an employee’s resignation must be the result of the employer’s behaviour.
Ukraine
When is an Employee Materially Responsible for Damage?
05/08/2009 In cases where an employee has inflicted substantial damage to the material assets of the employer, it is crucial that the employer can ensure that the employee is held materially responsible. However, Ukrainian law distinguishes between different forms of material responsibility with varying conditions and implications.
Dismissals During the Crisis: Do Employers Have a Choice?
06/05/2009 The most common response by companies to an economic downturn is a reduction in workforce, but redundancies are often poorly conceived or badly managed. Employers must be aware of the legal and reputational risks of improper dismissal and should be prepared to consider alternative counter-crisis measures that may allow them to retain their workforce - and its goodwill.
Penalties for Non-payment of Wages
22/04/2009 Law 1027-VI amended certain codes to impose stricter responsibility for late payment or non-payment of wages, pensions, scholarships and other payments established by law. A party that fails to pay wages - intentionally and without good reason - for over one month is liable for a fine of between 500 and 1,000 times the gross minimum monthly wage.
Financial Crisis Forces Labour and Welfare Changes
15/04/2009 The financial crisis has profoundly affected labour relations in Ukraine. The government has been forced to take action and has amended various aspects of employment legislation. The main amendments relate to the minimum salary and living wage, termination by mutual consent and changes in contributions to state welfare funds.
United Kingdom
Regulator Emphasizes Prudent Funding Targets
21/10/2009 The Pensions Regulator has followed up its earlier statements on the impact of market conditions on pension schemes with a new statement, entitled "Scheme Funding and the Employer Covenant". Its underlying emphasis is on trustees making use of the flexibility inherent in the scheme-specific funding regime - particularly in relation to recovery plans - where the employer is experiencing financial difficulties.
Regulator Issues Statement on Defined Contribution Arrangements
21/10/2009 The Pensions Regulator has issued a statement entitled "Engaged Employers and Informed Retirement Choices - Key to Good Outcomes for Members of Defined Contribution Pensions". It focuses on enabling members to make informed choices at retirement and improving the quality of employer engagement in defined contribution pension provision.
Employers Can Continue to Rely on Default Retirement Age of 65
14/10/2009 The High Court has ruled that the UK regulation permitting an employer to dismiss an employee on the grounds of retirement at the age of 65 or over does not breach EU law. The decision is not being appealed; therefore, until the government's review in 2010, employers can continue to rely on the regulation to retire employees.
Unfair Dismissal Compensation: Court of Appeal Reduces Potential Cost to Employers
14/10/2009 The Court of Appeal overturned an Employment Appeal Tribunal decision and ruled that where an employer has terminated employment without notice, unfair dismissal compensation must include full remuneration for the employee's notice period, even if the employee received earnings from another job during that period.
High Court Upholds Amendment Power Despite Scaling-Back of Members' Benefits
07/10/2009 The High Court has upheld the terms of an amendment power even though this resulted in members' benefits being scaled back. The decision reveals the limitations of cases that push for a practical and purposive interpretation of scheme rules. The court declined to overlook the breach of a formality simply because the consequences of adhering to the wording of the amendment power were complex or arguably unfair.
Court of Appeal: No Special Status for Pensions in Assessing Compensation
07/10/2009 The Court of Appeal considered the appropriate compensation for a member of a defined benefit pension scheme who had been unfairly dismissed. It did not accept that pensions have special status when assessing compensation. The court also rejected the Employment Appeal Tribunal's view that a defined benefit pension is an unquantifiable benefit which justifies pension loss being treated differently.
France
Sunday Working Rules Are Revamped
02/09/2009 The rules on Sunday working have been reformed. The new legislation aims to reaffirm "the principle of Sunday rest and...[adapt] this principle to cities and tourist and thermal areas, as well as to certain large cities for voluntary employees". Among other things, it confirms the previous exceptions to the Sunday working rules and introduces some new ones.
Size of Workforce for Redundancy Benefits Includes France-Based Employees Only
25/02/2009 The Employment Division of the Supreme Court has ruled that only the French-branch employees of a foreign company are to be taken into account when assessing whether the threshold size of 50 workers that would require implementation of a collective redundancy plan has been reached.
Kenya
High Court Annuls New Labour Laws
13/05/2009 A number of sections of the newly introduced Work Injury Benefits Act have been found to be in conflict with the Constitution and have consequently been declared null and void. Their nullification serves as a wake-up call to the Attorney General's Chambers which is charged with legislative drafting.
Energy & Natural Resources
Brazil
New Rules for Flourishing Oil Industry
10/08/2009 Since the announcement of the large oil discoveries in the offshore Tupi Complex in November 2007, Brazil has been in the international oil industry spotlight. The discoveries could make Brazil one of the world's leading oil exporters, particularly given the instability of other oil exporters. In light of this, President Lula has created an Energy Commission to discuss some potential adjustments to the oil industry's legal framework.
Wind Power Industry: Attractive Opportunity for Investors
26/05/2009 Brazil has a wind power potential of over 60,000 megawatts. The associated environmental impacts and risks of wind power are considerably lower than those for hydroelectric or nuclear plants, but the prices are no less competitive. Entrepreneurs are observing the many advantages of wind power and investing heavily in it.
Netherlands
Competition Authority Grants First Post-Citiworks Exemption for Private Network
21/09/2009 The Energy Chamber of the Competition Authority recently granted its first decision to exempt the owner of a private network from the statutory obligation to appoint a network operator since the judgment of the European Court of Justice in Citiworks. One of the conditions of the exemption is third-party access to such private network.
Court of Appeal Decides on Dutch Applicability of Global Shell Settlement Agreement
20/07/2009 In a recent decision the Amsterdam Appeal Court ruled in a settlement agreement for a worldwide group of shareholders (excluding US shareholders), entered into by Shell with respect to the re-categorization of certain of its gas and oil reserves to be legally binding in and outside the Netherlands.
Amendment of Small Field Policy on Production of Natural Gas
11/05/2009 Parliament is considering a bill to amend the Gas Act and the Electricity Act 1998. The bill would amend the Small Field Policy, which aims to exploit the existing infrastructure to develop and mine efficiently and effectively the remaining gas reserves in the Netherlands and the Dutch part of the continental shelf.
Energy Council Advises Sale of State Interests in National Grids
23/03/2009 The Energy Council of the Netherlands recently published an advisory letter to the minister of economic affairs on the impact of the credit crisis and subsequent recession on energy and climate policy. The council recommends nine measures to be taken this year. This update discusses the three most likely to dominate public debate in the coming months.
New and Re-introduced Incentive Schemes for Exploration and Production Activities
16/03/2009 Three letters were recently sent to Parliament by the minister of finance and the minister of economic affairs which may have an impact on the tax position of oil and gas companies active in the Netherlands. This update summarizes the main aspects of the relevant announcements.
Minister Responds to Debate on Ownership Unbundling and Privatization
19/01/2009 Parliamentary debate on Dutch energy-related issues is again focusing on the topic of ownership unbundling. The Lower House of Parliament recently adopted two motions that could have a significant effect on the unbundling process and on the future of public shareholding in energy companies. The minister of economic affairs has described how she will adjust government policy as a result of the motions.
Croatia
Overview (October 2009)
12/10/2009 Including: Changes to Regulatory Framework; Institutional Framework; Market Structure.
New Zealand
Improving Access to Mineral Resources in Conservation Land
28/09/2009 A recent speech by the minister of energy and resources identified lack of access to land in the conservation estate as the main barrier to growth in the mineral industry. Combined with the streamlining of the Resource Management Act, the minister's three-point plan to improve access will be well received by an industry that is already experiencing something of a mineral rush.
Electricity Market Report: A Plan for Quick Consumer Benefits?
01/09/2009 The minister of energy and resources has released a preliminary report on the ministerial review of electricity market performance. In seeking to address concerns about electricity price rises, it presents a number of proposals for consultation. However, the government appears to be looking for immediate, tangible results for households, rather than fundamental changes to market structure and design.
Electricity Generators and Retailers Seek Clarification of Consumer Guarantees Act
29/06/2009 Five electricity generators and retailers brought proceedings against the electricity and gas commissioner, seeking declarations as to the proper interpretation of the Consumer Guarantees Act 1993 as applied to the supply of electricity as a 'good'. It was held that retailers can be liable for supplying electricity that is below acceptable quality, regardless of the point in the supply chain at which the defect arises.
Energy Companies and the Resource Management Act: Planning Problems Ahead?
20/04/2009 The Resource Management Act is set to undergo reforms aimed primarily at expediting the assessment and approval of certain developments. A change to the process for designations - a planning mechanism available to companies providing public service-type infrastructure, such as pipelines and transmission networks - could increase delays in authorizing important energy projects.
Supreme Court: Climate Change Regulation to Stay National
16/02/2009 The Supreme Court has issued its long-awaited decision on consent authorities' consideration of non-renewable energy proposals. A majority reaffirmed the Court of Appeal decision that such authorities must not have regard to the effect of greenhouse gas discharges on climate change when considering granting discharge permits for non-renewable energy proposals.
Commerce Commission’s Gas Authorization: Will Old Part 4 Habits Die Hard?
09/02/2009 In 2008 Parliament remodelled Parts 4 and 4A of the Commerce Act, while transitional provisions allowed the Commerce Commission to complete the authorization for the control of supply of natural gas distribution services by Vector and Powerco. This update summarizes some key decisions under the commission's 'building blocks' methodology to determine allowable revenue under the authorization.
Canada
Impact of US Clean Energy Act on Canadian Industry
18/05/2009 Participants in Canadian industry, as well as both federal and provincial levels of government, have been watching the energy and climate change developments in the United States with great interest. A draft bill under consideration by Congress is likely to have a major impact on Canadian industry, particularly on the energy sector.
Ontario's New Green Energy Act Set to Energize Province with Renewable Energy
06/04/2009 The much-anticipated and heavily promoted Green Energy Act bill was recently introduced to the Ontario legislature. The bill aims to establish an attractive investment climate for green power developers, provide certainty for the market and make Ontario a leader in renewable energy and energy conservation in North America.
BC Utilities Commission Must Decide Aboriginal Consultation Disputes
23/03/2009 The British Columbia Court of Appeal recently issued two decisions requiring the British Columbia Utilities Commission, when making its decisions, to assess the adequacy of state consultation with first nations. These decisions mark a significant shift in the regulatory regime applicable to many businesses operating in this arena.
Ontario Eases Rules for Connecting Small Generators to the Grid
09/03/2009 New rules have come into effect in Ontario which are expected to expedite the connection of small electricity generation facilities (eg, biomass, biofuel or fuel cells) to Ontario's distribution system. The new rules apply to all 'queue-exempt small generation facilities' which meet the criteria set out in the rules, regardless of the technology used to generate the electricity.
Alberta Energy and Utilities Board Inquiry into Natural Gas Liquids Extraction Matters
02/03/2009 In 2007 the Alberta Energy and Utilities Board initiated an inquiry into the natural gas liquids extraction business in Alberta. The proceedings were extensive, spanning 2007 and 2008. The main focus of the inquiry was whether the existing convention for the extraction of natural gas liquids is equitable and in the best interests of the industry and the province.
Success Before Energy Resources Conservation Board in Competitive Drainage Case
16/02/2009 The Energy Resources Conservation Board recently issued its decision in an application by Hunt Oil Company of Canada Inc, pursuant to Section 39(1)(a) of the Oil and Gas Conservation Act, to amend its enhanced recovery scheme by adding two water injection wells to the Kleskun Beaverhill Lake A Pool.
Mexico
New Regulations on Renewable Energy Law
28/09/2009 The Regulations to the Law on the Use of Renewable Energy and the Financing of the Energy Transition have been published. Among other things, they set a timeframe for proposing rules on the interconnection of renewable energy projects with the national grid and calculating the compensation due to self-supply, small-scale production and independent power production projects.
Draft Regulations Spell Out Drive for Renewable Energy
03/08/2009 The energy reform package approved in November 2008 requires extensive regulations to implement it. The Federal Commission for Regulatory Improvement's recently published draft regulations range from policy aims in the fields of renewable energy and cogeneration to specific requirements for public bidding for renewables projects and details of the Federal Electricity Commission's projects.
Electricity Sector: Understanding the Regulatory Environment
29/06/2009 The federal government is looking to encourage private participation in the electricity sector, particularly in power generation, and the lack of public resources to cope with demand has become one of the leading drivers for structural reform. Among other things, private involvement requires an understanding of the regulatory landscape and the fields of generation, transmission and distribution.
President's Nominees to Pemex Board Await Senate Approval
23/03/2009 Among the regulatory measures required to implement the energy reform package, President Calderón must ask the Senate to ratifiy his nominees to the board of Pemex, the state-owned oil and gas company. These professional members will exercise considerable decision-making authority in the reorganized corporation. The Senate has a 30-day period in which to consider the four nominees.
Slovenia
Regulations on Support for Electricity Production Adopted
24/08/2009 The Regulation on Support for Electricity Generated from High-Efficiency Cogeneration and the Regulation on Support for Electricity Generated from Renewable Energy Sources were recently adopted and have partially entered into force. Support for electricity generated from renewable energy sources and high-efficiency cogeneration is provided in cases where production costs exceed the electricity market price.
Electricity from Renewable Energy Sources and High-Efficiency Cogeneration
16/02/2009 The latest amendment to the Energy Act recently came into force and contains a new chapter regulating the production of electricity from renewable energy sources and high-efficiency cogeneration. The chapter includes provisions on the adoption of national frame goals, the issuance of guarantees of origin of electricity and the granting of support to electricity production plants.
South Africa
Judicial Protection of Water Rights
01/09/2009 A recent decision highlighted the fact that it is important for any business to ensure that it has the proper water-use authorizations under the National Water Act. A business that uses water (as defined in the act) without the relevant authorization risks incurring a fine and opens the possibility that the authorities and courts may issue a directive to cease its use of water.
Nigeria
Nigerian Content: Balancing Necessity with Expediency
28/09/2009 The Oil and Gas Industry Content Development Bill was designed to increase local capacity and participation in the petroleum industry. Increasingly, the government seeks to achieve this by requiring that a substantial portion of activities in this sector be carried out in Nigeria by Nigerian companies and workers.
Domestic Gas Supply and Pricing Reform
15/06/2009 Nigeria's historical preoccupation with the exploitation of its oil sector to the detriment of other key sectors has been described as another manifestation of the 'resource curse', where a country rich in natural resources is less economically developed than other countries with comparatively fewer resources. The government is promoting a Gas Master Plan to address the under-development of the gas sector.
Norway
Simplification of Tax Ruling Application Process
14/09/2009 Transactions involving a petroleum licence may have tax implications for the parties involved. Taxation rules could have either a positive or negative effect on the parties and could lead to a change in the tax revenue of the state in question. Transactions involving a petroleum licence for the Norwegian continental shelf are subject to approval by the Ministry of Oil and Energy and the Ministry of Finance.
Petroleum Act Amendment Addresses Abandonment Liability Problems
05/05/2009 The involvement of smaller companies on the Norwegian continental shelf has been a success, but has led to potential problems of abandonment liability. A transferor will retain liability in connection with the transferred participating interest in the form of a residual obligation to licensees and the government, but only for abandonment costs connected with facilities and wells that exist at the time of the transfer.
Poland
Power Sector in Time of Crisis
16/03/2009 In January 2009 domestic energy consumption was 4% lower than at the same time in 2008. The drop in demand for energy has resulted in a 70% increase in exported energy in comparison to 2008. It seems that the global financial crisis that is affecting every sector of the economy is not going to spare the Polish power sector.
Romania
Renewable Energy Investors Await Green Light on Incentives
23/03/2009 Romania has transposed the provisions of the EU Renewable Energy Directive into national legislation, creating a comprehensive legal basis for the development of electricity generation from renewable sources. The new law also outlines an extensive programme of tax and other incentives for investors, but much secondary legislation is still required to bring the programme into effect.
USA
FTC Issues Final Rule Prohibiting Market Manipulation in Crude Oil and Gasoline
24/08/2009 The Federal Trade Commission (FTC) has issued a final rule that prohibits market manipulation in the petroleum industry. The rule, enacted pursuant to authority granted to the FTC under the Energy Independence and Security Act of 2007, is the product of a proceeding that incorporated several rounds of public comment.
Coalbed Methane Water Subject to Water Engineer's Jurisdiction
27/07/2009 The Colorado Supreme Court recently held that extracting water to facilitate the production of coalbed methane is 'beneficial use' of the water and operators are therefore subject to the Colorado state water engineer's regulations regarding well permits and augmentation plans.
National Historic Preservation Act Compliance Before Leasing
20/07/2009 In a recent decision the Interior Board of Land Appeals restated prior decisions in an extensive statement of the obligations of the Bureau of Land Management under the National Historic Preservation Act before it issues oil and gas leases on federal lands. Its holding also addressed a new issue in pre-leasing compliance.
Marcellus Shale Already Sees Royalty Litigation
20/07/2009 The battle over post-production costs rages on. Marcellus Shale mineral rights owners have brought a series of lawsuits claiming that the company-drafted leases they signed violate the Pennsylvania minimum royalty statute. Meanwhile, a federal district court has held that the plain language of the statute does not permit the deduction of post-production costs.
Bureau Tries New Approach to Capture Methane during Coal Mining
11/05/2009 Following a June 2008 decision of the Interior Board of Land Appeals, the Bureau of Land Management has taken a different approach to the capture of coal mine methane. A recent addendum to the West Elk Coal Mine lease authorizes the coal lessee "to capture for use or sale any or all of the coal mine methane... that it would otherwise be required to vent or discharge for safety purposes".
Memorandum Adopts New Internal Pre-sale Procedure for Oil and Gas Leasing
05/05/2009 The Bureau of Land Management has notified bureau state directors of a new internal procedure to "allow for a full review of parcels" by bureau headquarters "prior to an oil and gas lease sale". Under the new procedure, each state office is to send a briefing paper to headquarters at least one week before the notice of lease sale is posted.
Finland
Increased Need for Energy Efficiency Agreements
15/06/2009 The implementation of the EU Energy Services Directive will increase the importance of energy efficiency agreements. The directive applies to companies which are not part of the emissions trading scheme. Finland is implementing the directive through voluntary energy efficiency agreement arrangements, which aim to improve energy efficiency by 9% by 2016.
New Baltic Offshore Gas Pipeline Planned
16/03/2009 The Nord Stream pipeline is an important cross-border energy project with a significant potential environmental impact. It is planned that the first pipeline will be completed in 2011 and the second in 2012. When completed, the Nord Stream annual transmission capacity will be around 55 billion cubic metres and the pipeline will thus be a major import channel of natural gas from Russia to Germany.
Greece
Security of Natural Gas Supply
28/09/2009 The liberalization of the gas market and the sector's reorganization recently took place by means of Law 3428/2005, which allowed new gas suppliers besides public gas company DEPA SA to enter the market and supply eligible customers with gas on specific terms and conditions.
New Pricing Mechanism for Photovoltaic Power Producers
29/06/2009 Representatives of the Association of Photovoltaic Power Producers and the Public Power Corporation have agreed to amend the price mechanism for the electricity produced by photovoltaic power plants. Producers will receive a monthly sum, which will be treated as an advance payment for electricity produced. The final settlement of any amounts due to individual producers will take place every four months.
General Amendments to Law on Renewable Power Generation
18/05/2009 The Law on Generation of Electricity through Renewable Energy Sources and High-Efficiency Cogeneration of Electricity and Heat has recently been amended by virtue of Articles 27 and 28 of Law 3734/2009. Among other things, the new legislation aims to simplify the licensing procedure and streamline the issue process.
Amendments to Framework for Photovoltaic Power Generation
06/04/2009 A new law has modernized and simplified the licensing process for the installation of electric power generation units that use renewable energy sources. Among other things, it has introduced a basic framework for evaluating applications for the installation of photovoltaic systems.
New Special Zoning Framework for Renewable Energy Source Projects
02/02/2009 After a long period of public consultation, the Special Zoning Framework for Renewable Energy Source Projects has been issued by way of a joint ministerial decision. The framework aims to encourage new investment in renewable energy by giving investors the certainty they need in order to make significant investments in the Greek renewable energy market.
Venezuela
New Petrochemical Law Enacted
10/08/2009 The new Organic Law for the Development of Petrochemical Activities was published recently. The law imposes important restrictions on a sector that until now was fully open to foreign or national private investment. As a result of the law, new projects in this area cannot be carried out by entities that are not mixed companies with a state participation of at least 50%.
Nationalization of Oilfield Services
01/06/2009 The organic law that reserves to the state the goods and services linked with hydrocarbon primary activities recently entered into force. As a result, the assets and services of oil service contractors that are required to carry out primary activities will be owned or carried out only by the state, PDVSA and its affiliates, and mixed companies controlled by the state. The possible impact of this law on private companies could be significant.
PDVSA Makes Two Announcements
06/04/2009 PDVSA plans to merge the 21 mixed companies that migrated from operating services agreements in 2006 into six large mixed companies in order to reduce operating costs. It has also announced the purchase of the first tanker for the Cuban-Venezuelan oil fleet company Transportes del Alba, which will be used to supply the Petrocaribe countries.
Environment
Canada
Quebec Lays Foundation for Emerging Carbon Market
27/07/2009 The minister of sustainable development, environment and parks recently introduced Bill 42, which, if passed into law, will create government regulatory powers that will deepen its control over greenhouse gas emissions through market mechanisms. Essentially, the bill will allow for the creation of a provincial cap-and-trade system, the details of which will be established by government regulation following the enactment of the law.
Overview (June 2009)
22/06/2009 Including: Environmental Policy and its Enforcement; Environmental Permits; Waste; Liabilities; Contaminated Land; Powers of Regulators; Reporting and Disclosure Obligations; General; Emissions Trading and Climate Change; Asbestos; Environmental Insurance Liabilities; New Cases, Trends and Developments.
Ontario Embraces a Green Energy Economy
06/04/2009 Ontario's deputy premier and minister of energy and infrastructure recently introduced Bill 150 for its first reading in the legislature. If passed, the bill would create a new standalone Green Energy Act 2009 and significantly amend or repeal 17 other statutes in order to set Ontario on course to a greener economy and a conservation culture.
New Regulation on Use of Water Resources
16/02/2009 The Quebec government plans to adopt a new regulation in order to collect information on the impact of water withdrawals and allow for better management of conflicting uses of water resources. Industries, businesses, municipalities and institutions will be required to communicate various data to the government on the water that they withdraw from the natural environment.
Netherlands
New Environmental Permitting (General Provisions) Act
26/10/2009 It is expected that the new Environmental Permitting (General Provisions) Act will enter into force in 2010. The act will unify all permit procedures for which the minister of environment is responsible. It will also encompass several other permits for which the culture and nature ministers are responsible.
Compliance with EU Directive on Packaging and Packaging Waste
08/06/2009 In an unexpected and fundamental decision, the Administrative Jurisdiction Division of the Council of State ruled that a large group of producers and importers of packaging in the Netherlands - united under the Foundation Nedvang - did not comply with the rules laid down in the Paper and Cardboard Packaging Decree.
Dutch Implementation of the EU Environmental Liability Directive
23/03/2009 As of June 1 2008, the Netherlands has fully implemented the EU Environmental Liability Directive with regard to the prevention and remedying of environmental damage, in the form of the Environmental Management Act. The act does not go beyond the directive's provisions, in line with the general Dutch policy of restricting implementing legislation to the bare minimum.
New Zealand
Emissions Trading Scheme Review: The Road Ahead
28/09/2009 Following the Emissions Trading Scheme Committee's release of its keenly awaited report on the review of the New Zealand Emissions Trading Scheme, the government has announced that it has secured support for an amended scheme, setting an ambitious timetable for implementation. Stakeholders have been assessing the committee's views and the government's planned amendments.
Reviewing the Building Code: Green Building and Efficient Resource Use
14/09/2009 New Zealand is becoming increasingly aware of the environmental impact of the construction industry. A review of the Building Code, which has been carried out over the past two years, makes a number of recommendations on future green approaches to building, including a proposal to use carbon emissions as a measure of resource efficiency for energy use, water use and construction materials.
Select Committee Reports on Proposed Amendments to Resource Management Act
07/09/2009 The Resource Management (Streamlining and Simplifying) Amendment Bill proposes significant changes to participation in the resource management process. The select committee examining it has recommended retaining the provisions for de novo appeals on plans and policy statements, a limited further submission process and 'non-complying activity' status. The bill is expected to pass into law soon.
Product stewardship under the Waste Minimization Act: who is affected?
01/09/2009 The implementation of the Waste Minimization Act will require the development of mandatory and potentially costly product stewardship schemes to reduce the environmental impact of certain priority products. However, the Ministry for the Environment has compiled a longer list of potential priority products and the schemes could affect a wide range of manufacturers, producers and vendors.
Emissions Trading Scheme: Work Ongoing, But Timing for Forestry Sector Changed
29/06/2009 Although New Zealand's Emissions Trading Scheme has been referred to a special select committee for review, the government's work continues. Recent developments include the release of a report on the economic modelling of climate change policy, new legislation to amend the timing of the application of the scheme to the forestry sector and the release of a series of regulations for public consultation.
Emission Trading Scheme: Further Uncertainty for Forestry Sector
14/04/2009 The Emission Trading Scheme Review Committee has been mandated to review the emission trading scheme and a range of related matters. Speculation that the scheme would be put on hold pending the outcome has proved unfounded, but this has given rise to uncertainty for scheme participants, particularly in the forestry sector, which is first in line for scheme compliance.
Poland
New Mechanism to Support Environmentally Friendly Investments
07/09/2009 Under the Green Investment System, states that exceed their climate commitments can sell their surplus assigned amount units to other states in order to use the funds derived from such sales to finance projects that limit greenhouse gas emissions. Recently, the Polish government took steps towards selling its surplus assigned amount units.
Denmark
Aviation and the EU Emissions Trading Scheme: Danish Perspectives
28/09/2009 In February 2009 an amendment to the EU Emissions Trading Directive came into force, obliging EU member states to put in place within one year appropriate legislation to secure the successful incorporation of the aviation sector into the EU Emissions Trading Scheme. Denmark intends to implement the amendment by adding a new chapter to its Carbon Dioxide Act.
New Act on Sustainable Biofuel
22/06/2009 The Danish Parliament recently passed a new act on sustainable biofuel. Pursuant to the act, importers and producers of petrol and diesel oil are obligated to ensure that biofuel constitutes 5.75% of the total annual sales of fuel for land transportation. The Ministry of Climate and Energy is likely to introduce phased implementation of the targets, reaching 5.75% in 2012.
Environmental Implications of Wind Energy Projects
23/02/2009 In the ongoing climate change debate, wind energy is attracting significant interest because of its capability to produce energy without emitting carbon dioxide. However, wind energy also has environmental implications - particularly for the landscape. Thus, pursuant to Danish law, the construction of wind turbines is subject to detailed regulation.
Germany
Compensation and the Federal Soil Act
24/08/2009 A recent Federal Court of Justice decision has clarified that a property owner can start remediating soil contamination as soon as the competent authority has announced that it is planning to issue a remediation order, safe in the knowldge that it will subsequently be able to claim compensation. The court also affirmed that compensation claims become statute-barred after three years.
Belgium
Understanding Soil Contamination Regulations
06/04/2009 Soil and groundwater contamination are subject to detailed regulation in the Flemish, Walloon and Brussels regions. Parties that own, use, hold rights in or seek to acquire contaminated or potentially contaminated land should be aware of their responsibilities and the penalties for non-compliance.
Brazil
Post-consumption Responsibility: The Case for Further Change
07/09/2009 Like many countries, Brazil is becoming more conscious of post-consumption responsibility and is building a system of environmental liability based on this principle. The aim is to turn businesses into major players in environmental protection, especially in the end-of-life management of products. However, greater political will and legislative changes are needed.
Liability and Disclosure Obligations on Contaminated Land
15/06/2009 According to Brazilian legislation, the owner of a property must comply with its social and environmental obligations. Thus, the owner must respect several rules in order to maintain the correct use of its property. With regard to environmental issues, in particular those involving contaminated land, the most important principle relating to property use is the principle of prevention (ie, avoiding the reoccurrence of previously known damage).
Liability for Environmental Damage
06/04/2009 The Brazilian environmental liability system has its foundations in the Federal Constitution, which states that individuals or companies that carry out an activity considered harmful to the environment shall be subjected to penal and administrative penalties, in addition to the obligation to rectify the damage caused. Thus, environmental damage can be penalized in three distinct areas: administrative, criminal and civil.
The Environmental Permit System Explained
26/01/2009 Brazilian environmental legislation provides that environmental permits are required for the construction, installation, expansion or operation of any activity that uses environmental resources or is considered to be actually or potentially polluting to the environment. The extent of the activity's actual or potential polluting impact on the environment will determine the federal level at which it is regulated.
Norway
Administrative and Criminal Penalties for Illegal Pollution under Pollution Control Act
14/09/2009 An explosion at the Vest Tank AS installations resulted in illegal discharges that were injurious to health. The Pollution Control Authority reported Vest Tank on the grounds of acute pollution and the latter's receipt and treatment of desulphurized waste without the required permit. This update looks at the legal effects of breaching the provisions of the Pollution Control Act, using Vest Tank as an example.
New Landfill Ban on Biodegradable Waste
20/07/2009 A new provision in the Waste Regulations has introduced a ban on landfill of biodegradable waste in Norway, which entered into force in July 2009. The ban implies that biologically degradable waste must be disposed of in alternative ways. It is therefore expected that the ban will lead to both a decrease in greenhouse gas emissions from, and an increase in the recycling of, such waste.
New Nature Management Act Proposed
08/06/2009 Safeguarding nature diversity is a complex and demanding task that requires a cross-sectoral, unified approach. Norway has not previously had a common legal approach to this issue. Consequently, the legislative framework is an inadequate tool for sustainable nature diversity management. Thus, the proposal for a new Nature Management Act recently presented by the Ministry of Environment is welcome.
Measurement and Calculation of Carbon Content of Steel Scrap
05/05/2009 Norwegian steelworks Celsa has filed a complaint with the Pollution Control Authority over the act and regulations that implement Norway's Kyoto Protocol obligations. Among other things, Celsa claims that Norway is harsher in its treatment of enterprises in the steel industry than other European countries. The Ministry of Environment has acknowledged the need for an alternative approach.
Legal Challenges Affecting Port Clean-ups
02/03/2009 Efforts to identify pollution problems in ports and to clean up polluted ports will typically involve two tasks: (i) investigations, risk analyses and subsequent measures to determine whether a port is polluted, and (ii) measures to clean up the pollution. The issues such work raises are of both a legal and practical nature.
Towards a National Allocation Plan for 2008 to 2012
26/01/2009 Pursuant to the EU Emissions Trading Directive, as applied in accordance with the decision of the Joint Committee of the European Economic Area, Norway must develop a national allocation plan. The plan will set out the framework for the allocation of allowances to installations obliged to surrender emission allowances under the 2008 to 2012 EU Emissions Trading Scheme.
South Africa
Has Extended Producer Responsibility Been Introduced into Law?
05/10/2009 Since the recent entry into force of the National Environmental Management: Waste Management Act, certain industry representatives have claimed that the new legislation has introduced extended producer liability into law. This update explores whether the act has introduced extended producer responsibility or liability for waste.
Limitations on Recovering Costs in Environmental Constitutional Litigation
06/07/2009 As a result of a recent Constitutional Court decision, private entities should note that in public-interest litigation, even if they substantially succeed on the merits, they will generally not be in a position to recover legal costs. The only exception to this rule would be where the public-interest action is found to be frivolous, vexatious or manifestly inappropriate.
Expediting Environmental Authorization Processes
08/06/2009 This update looks at the provisions of the National Environmental Management Act that seek to expedite the environmental authorization processes by addressing fragmentation in the environmental authorization process and lack of coordination between authorities, and how corporations can make the environmental authorization process work for them.
Importance of Appropriate Authorization under Atmospheric Pollution Prevention Act
11/05/2009 The High Court recently highlighted the importance of obtaining the appropriate authorization for scheduled processes under the Atmospheric Pollution Prevention Act. In particular, the court highlighted the fact that operating with the wrong type of authorization is unlawful, irrespective of whether the authorities were mistaken about the type of authorization required for a particular activity when granting the incorrect authorization.
Environmental Right Relied on to Force Disclosure of Information
30/03/2009 The use of South Africa's Promotion of Access to Information Act 2000 to obtain environmental information from entities was recently highlighted by the submission of an application for access to quality reports on drinking water from a local authority. A political opposition party submitted an application under the act for the Nelson Mandela Bay Municipality to disclose its data on the quality of local tap and surface water.
New Laws Being Prepared to Respond to the Challenge of Climate Change
09/03/2009 New laws may be in the pipeline to address climate change following the finance minister's 2009 budget speech, in which he announced specific additional measures which South Africa will implement in response to climate change. The proposals the minister made will require reforms of some fiscal and environmental legislation because some of the measures he announced are not currently provided for in the law.
USA
Kerry-Boxer Climate Change Bill Introduced in Senate
26/10/2009 Senators Barbara Boxer and John Kerry have introduced their long-anticipated global warming bill. As the starting point for the Senate climate change debate, the Clean Energy Jobs and American Power Act would cap greenhouse gas emissions from approximately 7,500 power plants, industrial facilities and other covered sources at 20% below 2005 levels by 2020, and 83% below 2005 levels by 2050.
EPA Likely to Issue Endangerment Finding in Coming Months
21/09/2009 Environmental Protection Agency (EPA) Administrator Lisa Jackson recently told reporters that a formal endangerment finding for carbon dioxide - the next step in the federal regulation of greenhouse gas emissions - will likely occur "in the next months". The "imminent threat" of EPA regulation most likely ensures that some type of climate change legislation will be passed by Congress in the relatively near future.
New Petition Urges EPA Climate Regulation
24/08/2009 The Institute for Policy Integrity has petitioned the Environmental Protection Agency (EPA) to regulate greenhouse gas emissions from vehicle and aircraft fuels under the Clean Air Act. While a number of similar petitions have been filed since the Supreme Court declared in 2007 that the EPA could regulate global warming pollution in Massachusetts v EPA, this one stands out for both its timing and content.
Court Grants EPA Discretion in When to Issue Superfund Regulations
17/08/2009 Almost 30 years after Congress instructed the Environmental Protection Agency (EPA) to require facility owners and operators to set aside funds for the clean-up of property that may be contaminated by hazardous substances, a federal court in California has held that the EPA may take additional time to draft and issue the regulations.
EPA Warns States over Lax Clean Water Act Enforcement
27/07/2009 In recent weeks the Environmental Protection Agency has increased pressure on states to improve their enforcement of the Clean Water Act's permitting programmes, potentially indicating a new environmental priority for the Obama administration.
House of Representatives Passes Climate Change Legislation
20/07/2009 The House of Representatives has approved the American Clean Energy and Security Act, which would reduce greenhouse gas emissions from power plants, industrial facilities and other major sources to 17% below 2005 levels by 2020, with an 83% reduction required by 2050. These limits would be enforced through a system of emissions allowances.
France
Establishment of System for Registration of Regulated Installations
21/09/2009 Order 2009-663 on the registration of certain regulated installations for the protection of the environment established an electronic system between the report and permit stages, which can be viewed as a simplified permit. This update looks at the objectives behind the registration system, the scope of its application and the system itself.
Establishment of Strategy Committee for Grenelle Construction Plan
06/07/2009 The first meeting of the strategy committee for the Grenelle Construction Plan was held on March 12 2009. The committee's task is to facilitate the implementation of the laws resulting from the Grenelle Environment Project and four taskforces have been established to study zero-rate eco-loans, condominiums, the private tertiary sector and regional communities.
New Restrictions for Class 1510 Warehouses
14/04/2009 Warehouses classified as Class 1510 installations are subject to registration or licensing, depending on the volume of the warehouse. A recent order extended to existing and future Class 1510 warehouses subject to registration a series of requirements that had previously been imposed only on Class 1510 warehouses subject to licensing.
Italy
Environmental Obstacles to Renewable Energy Projects
10/08/2009 Despite the importance of renewable energy to Italy's greenhouse gas reduction targets and the existence of a simplified authorization procedure for renewable energy projects under national law, regulatory inconsistencies at regional level have made the environmental approval process a barrier to development in the sector. Recent court decisions and a new draft decree offer a more promising outlook.
Right to Environmental Information: Key Rulings
11/05/2009 The extent of and limitations on access to information of organizations and individuals regarding environmental protection have been widely debated. A recent decision of the Campania Administrative Court clarified the extent and character of absolute non-derogation of the right to environmental information, as set out by national law.
New Decree Clarifies Law on Secondary Raw Materials and By-products
09/02/2009 The question of what constitutes waste has troubled European and national environmental legislators throughout the past decade. Recent developments in Italy have further demonstrated the urgent need to reassess the entire body of legislation concerning waste collection, classification and disposal, but a new law has partly resolved the problem.
Switzerland
Implementing the Kyoto Protocol: Carbon Dioxide Tax and Emissions Trading
20/07/2009 Climate change is increasingly considered a serious and controversial issue for global society. Thus, in 1997, industrialized countries signed the Kyoto Protocol in order to cope with the severe problems associated with climate change by enacting national legal provisions based on international and democratic rules and the principles of the free market economy. This update considers the steps taken in Switzerland.
Jurisdiction on Parking Charges
26/05/2009 The Federal Court recently ruled on parking fees in connection with the construction of an exhibition and trade centre in the Canton of Zurich. The decision highlights the fact that different kinds of facility require different handling with regard to parking fees and the effective reduction of emissions.
Jurisdiction under the Federal Water Protection Statute
02/03/2009 The Swiss Federal Court recently issued two decisions regarding jurisdiction under the Federal Water Protection Statute. In the first, the court ruled on whether rainwater draining off the large copper-covered roof of the Lucerne Culture and Convention Centre was considered to be polluted; in the second, the court considered the assessment of fees for connecting to the canal system.
Franchising
Germany
Franchisor's liability for breaches of unfair competition law by franchisee
13/10/2009 In general, a franchisor cannot be held liable for the actions of a franchisee. However, an important exception to this applies to competition law. The Federal Supreme Court recently held that a franchisor was liable for a franchisee's advertising practices in breach of competition law, despite the fact that the franchise contract clearly informed the franchisee that such practices were not permitted.
Franchising and Execution of Arbitration Awards
21/07/2009 When agreeing upon the jurisdiction which is to apply to a franchise agreement, a review must be made as to whether that law recognizes a fairness test for general conditions of business. If that is the case, a remote place of arbitration should not be agreed so as to avoid problems with the recognition and execution of arbitration awards.
Termination of Franchise Agreements for Good Cause: A Sensitive Issue
28/04/2009 When termination for good cause is invoked, it is often to end business agreements which have been projected into the long term. Furthermore, such agreements are often connected with major investments on the side of both parties. The law therefore sets out relatively onerous requirements that must be fulfilled before termination for good cause can take place.
Arbitration Clauses in Franchise Agreements
20/01/2009 A recent decision highlights that if a franchise agreement to be concluded in Germany is to be made subject to a foreign law, the question of whether that law provides a fairness test for general conditions of business must be asked. If German law is applied, a place of arbitration which is far away and outside Europe should not be chosen.
USA
Federal Appeals Court Invalidates Ordinance Hostile to Franchising
20/01/2009 In a pair of concurrently filed opinions the US Court of Appeals for the Eleventh Circuit struck down an ordinance in Islamorada, Florida designed to prevent expansion of chain and franchised businesses. The court held that the ordinance prohibiting 'formula restaurants' and restricting the size of 'formula retail establishments' violated the Commerce Clause of the US Constitution.
Japan
Convenience Store Franchisor Breached Anti-monopoly Act
08/09/2009 The Fair Trade Commission has issued a cease and desist order against Japan's largest convenience store franchisor on the grounds of abuse of dominant position. It found that the franchise agreement gave franchisees sole discretion to set product prices, but that the franchisor's employees who supervised the management of the convenience stores had violated the Anti-monopoly Act.
Fair Trade Commission Investigates Convenience Store Franchisor
28/04/2009 Japan's largest convenience store franchisor has announced that it is being investigated by the Fair Trade Commission for potential violations of the Anti-monopoly Act. The question of the extent to which a franchisor can prohibit franchisees from discounting perishable foods could prompt closer scrutiny of other restrictions in franchising agreements.
Manager's Claim Poses Questions for Company-Operated or Franchised Restaurants
10/02/2009 In general, restaurants in Japan are either franchised or operated by the company that owns them. A decision on whether a restaurant manager held a 'supervisory or managerial position' under the Labour Standards Law - and was therefore entitled to overtime pay - is likely to influence investors in the food service industry when deciding whether to adopt the company-operated or franchised model.
Canada
Franchise-specific legislation in the provinces
25/08/2009 Thus far, four of the 10 Canadian provinces (Alberta, Ontario, Prince Edward Island and New Brunswick) have adopted franchise-specific legislation and other provinces are now considering following suit and enacting similar legislation. This update focuses on the status of franchise-specific legislation and proposed regulations pending in two Canadian provinces: Manitoba and New Brunswick.
Restrictions of Use Covenants Are Valid Personal Obligations of Franchisee
16/06/2009 A recent decision rendered by the Quebec Superior Court held that the restriction of use covenants contained in several servitudes or easements were personal obligations of the franchisee. Therefore, the court upheld their validity, despite invalidating the actual easements. The decision is interesting in light of the particularities of Quebec civil law, which differs from the common law applicable elsewhere in Canada.
Material Deficiencies in Disclosure Documentation Amount to Non-disclosure
17/03/2009 Two recent Ontario Superior Court of Justice decisions have held that material deficiencies contained in disclosure documents that must be provided to prospective franchisees pursuant to the Arthur Wishart Act (Franchise Disclosure) 2000 (Ontario) amount to non-disclosure, giving rise to a franchisee's right to rescind the franchise agreement without penalty or obligation within two years of its execution.
Italy
Protecting Know-How and Confidential Information: Limits and Practical Steps
11/08/2009 A decision of the Court of Turin upheld the enforceability of an undertaking not to compete post-contract and of terms protecting a franchisor against unlawful trademark use by a franchisee. However, the decision appears to limit the protection available to a franchisor's know-how and confidential information.
Is a Franchisee a Consumer?
27/01/2009 The question of whether the Consumer Code's protection for consumers applies to franchisees most frequently arises where the prospective franchisee is not already active in the market and does not have an established business. Although the code's provisions might appear to apply, factors such as the aim of the franchise agreement are likely to dictate that the franchisee be regarded as an entrepreneur.
United Kingdom
Appeal Court Confirms Franchisor's Right to Enforce Restrictive Covenant
26/05/2009 A recent decision of the Court of Appeal recognizes that the courts should protect a franchisor's goodwill following termination if a proportionate restrictive covenant is in place. This provides the franchisor with the necessary time and breathing space to locate the right franchisee to take over the territory. Furthermore, it prevents the territory from becoming tainted by the existence of a former franchisee.
Recent British Franchise Association Guidelines and Technical Bulletins
24/02/2009 The British Franchise Association occasionally issues practical advice and guidance on best practice in the form of technical bulletins and guidelines. Over the last 15 months it has issued three new technical bulletins which are of general interest, covering minimum performance clauses, gagging clauses and the disclosure of kickbacks.
Law Commission Proposes to Reject EU Consumer Statutory Rights Proposal
13/01/2009 Dealing with faulty goods is a key risk management and cost issue in franchise systems that involve the supply of products to consumers. Consumers' statutory rights are the subject of a consultation exercise by the Law Commission. The consultation is part of an exercise to harmonize consumer rights across Europe being conducted by the European Commission.
Information Technology
Canada
Innovation and Outsourcing: Are the Two Compatible?
28/07/2009 In these hard economic times, companies are seeking ways to compete better. IT outsourcing arrangements have been, and continue to be, seen as a tool to address certain corporate goals. However, innovation seems to be lacking in such arrangements. This update looks at how an outsourcing relationship can enable innovation.
Fighting Crime or Protecting Privacy: A Balancing Act
05/05/2009 Parliament is considering the Modernization of Investigative Techniques Act, which is designed to reduce the ability of criminals to use sophisticated technologies to carry out their activities undetected. However, concerns have been raised that the misuse of the proposed legislation could enable law enforcement agencies to monitor all emails and cell phone use.
IT Transactions and Insurance Clauses
20/01/2009 Many IT deals include insurance provisions to cover the costs of the provision of faulty equipment, systems or services. Any change in the scope of work or responsibilities of a third-party IT supplier should always be undertaken with all parties being cognizant of the possible effects of that change on the insurance policy coverage.
Finland
New Act on Electronic Identification and Electronic Signatures
27/10/2009 The new Act on Electronic Identification and Electronic Signatures has entered into force. The act provides rules on electronic identification services and the use of electronic signatures. Compliance with the new act is to be monitored by the Communications Regulatory Authority, whose main task is to ensure that service providers provide qualified certificates that comply with the act's requirements.
General Terms and Conditions for IT Procurement to be Updated
01/09/2009 The IT2000 General Terms and Conditions for IT procurement are planned to be updated in early 2010. The draft updated terms have been published and they are currently in circulation for comments. The drafts are available online and anyone wishing to submit comments on the drafts must do so by September 4 2009.
Court of Appeal Rules on Unauthorized Use of Neighbour's WLAN Connection
02/06/2009 The Turku Court of Appeal has confirmed a Salo District Court ruling in a matter where an IT professional had repeatedly exploited the unprotected wireless local area network (WLAN) connection of a neighbour without consent. Both courts held that intentional unauthorized use of a neighbour's WLAN connection constitutes petty unauthorized use under Chapter 28, Section 9 of the Penal Code.
Protection of Privacy in Electronic Communications Bill Passed
28/04/2009 Parliament has passed Bill 48/2008 on amendments to the Act on the Protection of Privacy in Electronic Communications and other related legislation. The amendment adds to and clarifies the rules on data security and grants corporate subscribers certain rights to intervene in cases where data has been misused, including the right to analyze identification data in order to investigate disclosure of important business secrets.
Parliament Considers Protection of Privacy in Electronic Communications Bill
10/03/2009 Parliament is considering Bill 48/2008 on amendments to the Act on the Protection of Privacy in Electronic Communications and other related legislation. The bill and the implications of the reform have been the subject of wide-ranging discussions in the press.
ECJ Rules on Relationship between Data Protection and Freedom of the Press
17/02/2009 The European Court of Justice has rendered a preliminary ruling on the protection of personal tax data and the freedom of the press. It held that if personal data is contained in documents in the public domain and is processed with the sole object of disclosing information, opinions or ideas to the public, such processing is to be considered “solely for journalistic purposes”.
Insolvency & Restructuring
Belgium
Procedure for Reorganization of Companies in Difficulty is Revamped
24/04/2009 The new Law on Business Continuity makes fundamental changes to the Belgian legislation on company reorganization (similar to Chapter 11 proceedings in the United States). The process has been simplified and streamlined, with the aim of creating conditions that favour saving the company as a going concern.
France
Developments in Fiducie Law
23/10/2009 Since the fiducie was introduced, a number of amendments have altered the applicable legal framework, both for the fiducie in general and in respect of contracts for the fiducie as security. Certain changes apply, particularly in the context of insolvency proceedings.
Insolvency Law Reform: Three Years On
12/06/2009 In reaction to apparent failures and in light of the global economic crisis, the legislature and regulatory authorities have proposed further insolvency law reforms. It is hoped that companies will gradually gain confidence in the new procedures and avail themselves of the possibilities offered by the law with a view to the continuation of their business.
Greece
Credit Crunch Focuses Attention on Bankruptcy Code
27/03/2009 Parliament has implemented the new Bankruptcy Code under Law 3588/2007. It is the country's first bankruptcy code and its implementation was necessary to regulate a field in need of redefinition and modernization in order to follow developments in other legal systems and to protect and secure economic growth and public interest.
Hong Kong
New Case Management Regime Poses Problems for Liquidators
25/09/2009 The High Court has introduced significant reforms of its civil procedure that emphasize the court's case management role. Despite the laudable aims of the rule changes, a more front-loaded case management process presents difficulties for liquidators and may make it harder for them to prosecute good claims against delinquent directors or others who have contributed to, or benefited unfairly from, corporate collapses.
Liquidator's Avoidance Powers: Unfair Preference and Fraudulent Conveyance
11/09/2009 In an insolvent winding-up in Hong Kong, the liquidator will review past conduct, decisions and actions in relation to the company's operation and the management of its affairs. However, his or her avoidance powers are often difficult to exercise. Two cases in relation to unfair preference and fraudulent conveyance shed light on the extent to which a liquidator can overturn past transactions involving a debtor's property.
The time is ripe: introducing a corporate rescue procedure
04/09/2009 The government is considering the introduction of a corporate rescue procedure that would provide a statutory grace period for companies in short-term financial difficulty. Such a statutory framework - with minimal court involvement, but with the advantage of a moratorium while the company formulates its restructuring plan - could greatly boost corporate rescues.
Approaches to Cross-Border Insolvency Issues
24/07/2009 Hong Kong has not adopted the United Nations Commission on International Trade Law Model Law on Cross-Border Insolvency. However, its courts take a pragmatic approach to cross-border insolvency issues. When considering the steps to take in Hong Kong, they will recognize foreign liquidations and will have regard to foreign restructuring arrangements which have been approved abroad.
Overview (March 2009)
13/03/2009 Contrasts and Similarities; Options for Creditors; Receivership; Restructuring and Workouts; Provisional Liquidation Schemes of Arrangement; Liquidation; Debts and Distribution of Assets; Cross-Border Insolvencies.
Mexico
Overview (February 2009)
27/02/2009 Includes: Ranking of Creditors and Shareholders; Mechanisms for Trade Creditors to Secure Unpaid Debts; Rescue and Insolvency Procedures; Liability and Transactions; Foreign Proceedings.
Austria
Legislature Impedes Assertion of Claims of Bankruptcy Estates Without Assets
16/10/2009 When the Budget Accompanying Act 2009 entered into force on July 1 2009, free legal aid - which was already being granted on only a limited basis to legal entities and other structures with the legal capacity to sue and be sued - was abolished. Receivers can no longer enforce in court claims of bankruptcy estates that have no assets, unless a third party advances the money for the litigation costs as a loan.
Insolvency Law Reform
19/06/2009 The legislature intends to address the difficult economic environment and the increasing demands on insolvency law by reforming the insolvency legal framework. The first priority objective is the timely initiation of insolvency proceedings and thus improved chances of successful financial restructuring. This should be primarily achieved by amending the procedural laws governing forced composition and bankruptcy proceedings.
Liability of Honorary Bodies of Football Club for Delayed Filing of Bankruptcy Petition
27/03/2009 In a recent judgment the Supreme Court ruled on the personal liability of the honorary bodies of an Austrian premier league football club. After the football club had become unable to pay its debts, rather than filing a bankruptcy petition in accordance with their duties, the club's bodies signed new players. The players took legal action against the club's bodies for compensation of their losses.
British Virgin Islands
Statutory Demands and BVI Insolvency Act
21/08/2009 In a recent case the High Court took the view that because of a particular definition in the Insolvency Act, a company which had not applied to set aside a statutory demand within 14 days of service was precluded from making submissions about the validity of the demand at a subsequent application to appoint a liquidator. This had the practical effect of limiting the defences available to a company at the trial stage.
Directors' Exposure in Context of Financial Distress
21/08/2009 The liquidity crisis continues to have an impact on corporates in several sectors worldwide and refinancings and waiver requests are on the increase. As the financial crisis continues and corporates run out of cash, they will begin to look for new loan capital or seek to raise fresh equity. Thus, financial distress is inevitable for several corporates and directors must be cognizant of their potential exposure.
Corporate Arrangement Schemes to Safeguard Companies' Existence
17/07/2009 As the global economic downturn continues, companies in distress may need to consider the types of arrangement scheme available under BVI law and the benefits they can bring. Arrangements are primarily company driven, whereas schemes of arrangement are primarily creditor driven or driven by the company, either through its board or a liquidator in an insolvency scenario.
Nigeria
Insolvency of Capital Market Intermediaries and Adequate Protection for Investors
26/06/2009 This update focuses on the treatment of account holders in the event of insolvency and includes an overview of the General Insolvency Framework and the special protection afforded to account holders in the banking and capital markets industries through special statutes. The update also analyzes the potential impact of the International Institute for the Unification of Private Law Convention on Nigerian insolvency practices.
Alan Dick: Bridging the Gap between Domestic and Cross-Border Best Practice
27/03/2009 The Federal High Court recently ruled on the amended winding-up petition brought by Diamond Bank Plc against Alan Dick and Company West Africa Ltd. The case offers contentious insolvency practice a unique opportunity to use the UK cross-border insolvency provisions to follow up on the insolvent company's assets in foreign jurisdictions and to call UK-based directors to account.
Poland
Changes to Position of Mortgagees in Bankruptcy Proceedings
11/09/2009 One area of law that has substantially changed since the enactment of the Bankruptcy and Recovery Amendment Act in May 2009 is the course of bankruptcy proceedings envisaging the conclusion of an arrangement with creditors and the way in which specific creditors in such proceedings are treated. This update focuses on one specific form of securing receivables - a mortgage - in order to explain the changes more simply.
Overview (June 2009)
19/06/2009 Including: Legal Framework; Types of Bankruptcy and Recovery Proceeding; Corporate Bankruptcy Proceedings; Corporate Recovery Proceedings; Personal Bankruptcy.
Amendments to the Bankruptcy and Recovery Law Act
09/04/2009 Parliament has adopted a new act amending the Bankruptcy and Recovery Law Act. The amendment includes changes that will have a significant impact on evaluating an entrepreneur's bankruptcy capability, access to recovery proceedings for entrepreneurs and the position of a creditor to which the bankrupt's property is transferred to secure its receivables.
Portugal
Lisbon Court of Appeal Confirms Criteria for Insolvency Application
25/09/2009 The financial crisis has led to greatly increased use of insolvency proceedings in Portugal. However, such proceedings are not only slow and inefficient, but also open to misuse, as many recent petitions for declarations of corporate insolvency have failed to fulfil specific legal requirements.
Insolvency Proceedings and Investment Opportunities
28/08/2009 Acquiring distressed businesses has benefits and risks. Portugal's legislative framework is likely to be further tested in the present economic climate and a would-be acquirer must ensure that it understands the full effects and implications of the Portuguese insolvency regime.
Constitutional Court Grants Procedural Leeway to Creditors
09/04/2009 The Constitutional Court has struck down an interpretation of Article 30(2) of the Insolvency and Corporate Rescue Code that disproportionately disadvantaged creditors. The court of first instance had held that if a debtor fails to submit a list of its five main creditors with its statement of opposition to an initiation of insolvency proceedings, it may not do so retrospectively and its opposition will be void.
Court Strikes Down Ban for Managers of Insolvent Companies
03/04/2009 The Constitutional Court has ruled on the constitutionality of two provisions of the Insolvency and Corporate Rescue Code. The court was asked to consider whether the managers of a bankrupt company may be prohibited from carrying out actions in relation to the company's assets or may be banned from engaging in business or holding a position within the governing body of a corporate entity.
Sweden
A Guide to Company Reorganization
02/10/2009 The Company Reorganization Act sets out the procedure for commencing specific proceedings for the reorganization of undertakings which are experiencing difficulties in fulfilling their payment obligations. The instruments available under the act include debt rescheduling through judicial composition and government-funded wage guarantees to increase liquidity.
Courts Rule on Jurisdiction in Insolvency Proceedings
26/06/2009 The Court of Appeal recently ruled that when applying Article 3(1) of the EU Insolvency Regulation in order to establish the international jurisdiction of Swedish courts, a natural person who is not a businessman shall be considered as having his or her prime interests in the country in which he or she is civil registered, unless that person can demonstrate that his or her prime interests lie elsewhere.
Recovering a Debtor's Payments in Bankruptcy
17/04/2009 The general principle of recovery is that an act may be annulled if it unfairly favours a particular creditor to the disadvantage of other creditors. However, the issue raises questions of interpretation and particular considerations apply in respect of payments of preferred claims, tax payments and payments of third-party claims.
Principle of Tradition of Property Under Repeal
30/01/2009 The Supreme Court no longer considers it reasonable to require a tradition of property to the buyer in all cases in order for the buyer to receive protection against the seller's creditors. Although it had previously considered itself unable to depart from this requirement without the support of the law, it has recently made space for assessments about the purpose of the requirement.
International
Key Provisions of the Model Law on Cross-Border Insolvency
03/07/2009 The United Nations Commission on International Trade Law adopted the Model Law on Cross-Border Insolvency in 1997 to provide an interface between the insolvency laws of different countries, focusing on the four key areas of access, recognition, assistance and cooperation. Since then, familiarity with its scope and key provisions is becoming increasingly important.
Japan
Right of Avoidance under Bankruptcy Law
25/09/2009 The Bankruptcy Law contains provisions to prevent an insolvent debtor from ceding or transferring its assets without consideration, selling assets at an unreasonably low price or taking steps to pay debts only to a specific creditor. The right of avoidance operates to invalidate such acts, restore the assets to the bankruptcy estate and enable fair distribution to creditors through the liquidation process.
Covenant to Rescind in Finance Lease under Civil Rehabilitation Procedure
19/06/2009 In a civil rehabilitation process a secured creditor may foreclose on its collateral outside proceedings. However, in addition to an order of stay, the Civil Rehabilitation Law allows a debtor to invoke a statutory redemption procedure for assets that are vital to its ongoing business. In a recent case the Supreme Court attempted to strike a balance between the interests of the debtor, the secured creditors and the general creditors.
Statutory Redemption under the Civil Rehabilitation Law
06/03/2009 In civil rehabilitation proceedings a secured creditor may foreclose on its collateral outside the proceedings. Therefore, if a debtor wishes to continue to use assets provided as collateral for its business, it must reach an agreement with the secured creditor. Where agreement is difficult, the Civil Rehabilitation Law allows the debtor to redeem the collateral by paying the fair market value to the secured creditor.
Latvia
Further Amendments to Insolvency Law Planned
12/06/2009 Amendments are planned to a number of laws relating to insolvency proceedings in order to improve the efficiency of insolvency procedures and support the rehabilitation of companies that are experiencing financial difficulties. To this end, amendments are planned to the Insolvency Law, the Civil Procedure Law and the Credit Institutions Law.
Insolvency Law Amended
27/02/2009 The Cabinet of Ministers has approved the draft amendments to the Insolvency Law, which aim to improve the regulation of restructuring procedures for companies which have temporary financial difficulties and are expected to develop a programme to restore their solvency in full. The amendments also reduce the administrator's monthly fee from three monthly minimum salaries to one.
Spain
Advantages for Creditors Applying for Declaration of Insolvency of Debtors
04/09/2009 The Insolvency Act gives the creditor petitioning for the insolvency of its debtor a privileged position in the recovery of its debt: one-quarter of the amount is considered to be a general privileged debt. In principle, general privileged debts will be affected by the agreement with the creditors only if they voted in favour of it.
Further Modifications to Insolvency Law
05/06/2009 The recent insolvency law reform, in addition to establishing a new regime for refinancing agreements and clarifying certain types of subordinated debt, has introduced other significant changes. Insolvency proceedings will be speeded up, since the notice making public the declaration of insolvency and other related communications will in future be electronic, although this innovation will require enabling regulations.
New Modifications to Insolvency Law
01/05/2009 A new law aimed at exempting certain refinancing agreements from review by insolvency courts has recently been approved. However, the modifications also clarify other aspects of the Spanish insolvency law, which was first approved in 2004 in an era of prosperity quite different from the present economic crisis.
Debate over Subordinated Debt Provision Decided
09/04/2009 One of the most hotly debated provisions of the Insolvency Law - and perhaps all Spanish law - deals with whether a debt of an insolvent entity which is guaranteed by a third party that is deemed to be 'especially related' to the insolvent debtor is classified as subordinate and thus placed in the lowest category for payment out of the insolvent debtor's assets.
Switzerland
Supreme Court Affirms Primacy of Equal Treatment of Creditors in Bankruptcy
30/10/2009 Recent case law underlines the Federal Supreme Court's strict interpretation of the avoidance rules. As a consequence, every payment of an outstanding debt by a debtor in financial difficulties is susceptible to subsequent avoidance action under bankruptcy law, should the debtor fall into bankruptcy. Hence, all such payments must be carefully scrutinized before execution.
Bank Insolvency: Ranking of Claims and Depositor Protection
15/05/2009 This update summarizes the legal consequences of a decree of liquidation against a Swiss bank, in particular with regard to the ranking of claims in liquidation, which remain unaffected by the changes to the Banking Law. The update also outlines the changes in relation to depositor protection which have come into effect as of December 20 2008.
United Kingdom
High Court Rules on Lehman Proposed Scheme of Arrangement
18/09/2009 A scheme of arrangement under the Companies Act 2006 cannot be used by the administrators of Lehman Brothers International (Europe) to facilitate the return of client assets. The High Court judge endorsed the idea that where there is no jurisdiction for a scheme in company law, trust law offers mechanisms for distributing trust property to beneficial owners while protecting the trustee from liability.
Clarity for Creditors Contracting Out of Legal Set-Off
28/08/2009 The High Court has confirmed that parties can expressly exclude their right to legal set-off. This welcome decision provides confirmation and clarification in a complex area of law, supports the doctrine of freedom of contract and is consistent with a number of policy arguments for the permissive nature of legal set-off.
Companies Face Restructuring Challenges as Insolvencies Rise
21/08/2009 The Insolvency Service has released its figures for the second quarter of 2009. The total number of corporate insolvencies was up on the previous quarter, although the number of company administrations, which typically involve larger corporate entities as opposed to sole traders, was down by over 20% from the previous quarter. Unfortunately, this is unlikely to be a sign of businesses getting back on track.
Valuation Issues in Restructurings: Something for Everyone?
14/08/2009 In a case which has been closely followed in restructuring circles, a scheme of arrangement has been approved that is a key part of the IMO Carwash group's debt restructuring. The judgment offers significant points of interest for senior creditors, junior creditors and boards.
Pre-pack Administration: Court Considers its Discretion and Pre-appointment Costs
12/06/2009 A recent High Court decision has confirmed that transparent pre-pack sales can be used where they are in the best interests of the creditors as a whole. The case shows the court being more proactive in the exercise of its discretion, looking behind the proposed administrator's statement at the effect of administration and a proposed pre-pack.
Connection and Association in the Insolvency Act
08/05/2009 Transactions involving connected persons or associates can give rise to particular considerations. Liquidators or administrators can challenge or reverse certain transactions which involved the insolvent company and took place before the formal insolvency. Therefore, establishing whether a party is connected or associated can be significant. However, the statutory tests are wide-ranging and complex.
Canada
Leave of Court Required before Affidavit Can Be Cross-Examined
18/09/2009 The Ontario Superior Court of Justice recently ruled that leave of the court is required before a debtor can cross-examine an affiant on his or her affidavit filed in support of an application for bankruptcy order. The debtor must satisfy the court that the interests of justice will be satisfied by cross-examination, and that the debtor is not engaging in a fishing expedition to delay the bankruptcy proceedings.
Finland
Supreme Court Rules on Effect of Merger on Pledge Undertaking
02/10/2009 The Supreme Court recently set a precedent in a case in which a company limited by shares had given a pledge to another company for its current and future debts before merging with a third company. The question for the court was whether the general pledge included debts incurred after the merger.
Bankrupcy Estate's Right to Sell a Pledged Property with Court Permission
29/05/2009 One of the most important tasks the administrator of a bankruptcy estate must perform is the liquidation of the property. The administrator should liquidate the property without delay and try to achieve the best possible financial result. Problems may arise if the property to be liquidated has been pledged, since the interests of the bankruptcy estate and the pledgee often deviate from one another.
Supreme Court Rules on Debt Priority in Bankruptcy
20/02/2009 A recent Supreme Court decision emphasizes the importance of ascertaining whether a breach of contract arises before or after the commencement of a contractor's restructuring proceedings and whether the resulting debt is to be considered a restructuring debt. This categorization is central to the question of whether the resulting compensation should take priority in the contractor's bankruptcy.
Germany
Insolvency Law Reform: Risks and Pitfalls
03/04/2009 The long-debated, comprehensive reform of the law on limited liability companies has come into force. The bill introduced significant changes not only to the Limited Liability Companies Act, but also to insolvency law, including changes to the treatment of shareholder loans in insolvency and, in certain circumstances, an extension to shareholders of the directors' duty to file for insolvency.
Isle of Man
Placing Assets Beyond the Reach of Creditors
03/04/2009 In difficult economic times, fear of the effects of a downturn in the economy and the prospect of business failure may lead some to consider transferring property and assets in an attempt to place them beyond the reach of claims of creditors, a trustee in bankruptcy or a liquidator. Isle of Man law provides that transactions undertaken with fraudulent or improper intentions may be set aside.
Pakistan
Draft Corporate Rehabilitation Act Proposed
01/05/2009 The Securities and Exchange Commission is consulting on the draft Corporate Rehabilitation Act 2004. The draft act aims to provide a mechanism for the revival and rehabilitation of insolvent companies, improving corporate governance and debt recovery, achieving a better balance between creditor and debtor rights and helping to prevent unnecessary corporate failures.
Ireland
Supreme Court Rules in Worldport Liquidation
15/05/2009 The Supreme Court has affirmed that a company can, in principle, be accountable as a shadow director (ie, a party in accordance with whose directions or instructions the directors of a company are accustomed to act). This point of principle is important because the Companies Acts' provisions on, for example, liability for fraudulent or reckless trading can apply to shadow directors.
Pensions Insolvency Payments Scheme Proposed
08/05/2009 The government has announced a proposal to introduce a Pensions Insolvency Payments Scheme under which pension trustees will be able to buy pensions from the Exchequer at cost price rather than paying for annuities at market rates. The money saved can be put towards the pensions of those yet to retire, thereby reducing pension shortfalls.
Testing Times for Company Rescue through Examinership
16/01/2009 It is difficult at present to attract fresh investment capital and formulate a successful scheme of arrangement where a company has substantial property interests which are charged. In a falling property market with secured borrowings often in excess of short-term realizable value, banks tend to favour the appointment of a receiver over the alternative, which is supporting examiners' proposals for a scheme of arrangement.
Jersey
Netting Law - Summary of Scope and Effect
16/01/2009 The Netting Law, which came into effect on August 12 2005, is a short law, expressed in seven articles, which gives statutory confirmation that netting, contractual subordination and non-petition provisions in agreements are enforceable in accordance with their terms before and after bankruptcy. This update summarizes its scope and impact since coming into effect.
Australia
Taxman Rejoins Unsecured Creditors in Liquidation
09/10/2009 The Full Federal Court recently ruled that after the commencement of a winding-up, the commissioner of taxation could validly issue a notice to a debtor of the insolvent company requiring that the debt owed be paid to the commissioner instead of the insolvent company. On appeal, the liquidator sought to avoid the notice's effect by arguing that it was an attachment for the purposes of Section 500 of the Corporations Act.
Liquidators Avoid Inquiry into Prosecution of Insolvent Trading Claims
29/05/2009 The New South Wales Supreme Court of Appeal recently delivered judgment on an appeal by liquidators against orders that an inquiry be held by the court into their conduct under Section 536 of the Corporations Act arising out of their prosecution of proceedings using litigation funding.
Taxman Jumps the Queue - Section 260-5 Notices Still Effective After Liquidation
27/02/2009 For many years the deputy commissioner of taxation has been able to issue a notice to someone owing money to a taxpayer, requiring that the debt be paid to the Australian Taxation Office instead. The notice operates as a charge, rendering the commissioner a secured creditor of the taxpayer. However, what happens if the notice is served after the taxpayer is in liquidation?
Cayman Islands
Insolvency Legislation Overhauled
06/02/2009 Three new sets of rules and an amendment to the Grand Court Rules were published in a special issue of the Cayman Islands Gazette, establishing a new insolvency regime. Amendments to the Companies Law that were enacted in 2007 but not brought into force pending the preparation of the rules will now enter into effect at the same time as the new rules on March 1 2009.
Italy
Confirming a Reorganization Plan: Who Appoints the Expert?
24/07/2009 Italy's bankruptcy regime provides an exemption from revocatory action for actions, payments and guarantees that form part of an out-of-court reorganization plan. However, doubts have surfaced regarding the appointment of the individual who must attest to the reasonableness of the plan. Recent case law seems to be taking this power away from the courts.
New Rules on Tax Liability Settlements in Insolvency Procedures
09/04/2009 As part of the reform of Italy's insolvency procedures, Legislative Decree 5/2009 has added a provision to the Bankruptcy Act. It provides that a tax debtor which is in a pre-insolvency composition procedure and has filed a petition under Article 160 of the Bankruptcy Act may satisfy the relevant tax authority's claims in part and apply for settlement in any dispute pending before the tax courts.
Netherlands
Flexibility in Cross-Border Reorganizations
02/10/2009 Dutch courts have proved flexible when interpreting insolvency law, which was particularly helpful in the reorganization of cable companies GTS, Song and Versatel in 2002, after the dot.com bubble burst. This update looks at the features of insolvency law and the general characteristics of Dutch insolvency proceedings, as well as the ways in which different classes of creditor are treated.
Landsbanki: Emergency Regulations and Effects of Deposit Guarantee Scheme
15/05/2009 The Amsterdam District Court recently declared the emergency regulations under the Financial Supervision Act applicable to the Dutch branch of Landsbanki (Icesave). This update looks at the court's judgment, the deposit guarantee rules which were applied to Icesave and the new legislation amending these rules.
Latest Developments in Proposed Bill for Cross-Border Insolvencies
30/01/2009 The Preliminary Bill for an Insolvency Act contains rules for the recognition of insolvency proceedings in non-EU countries and the law applicable to foreign proceedings. This update examines those rules and their relationship to the EU Insolvency Regulation and the United Nations Commission on International Trade Law Model Law on Cross-Border Insolvency.
Russia
Understanding Bankruptcy Proceedings
26/06/2009 Creditors have been given an effective legal tool to enforce the liability of shareholders and chief executive officers, including foreign companies and citizens, for a Russian debtor's bankruptcy. Creditors can now recover their debts from such parties' property if the debtor's property is insufficient to satisfy the debts. However, pursuing any claim requires an understanding of Russian bankruptcy proceedings.
Insurance & Reinsurance
Bahamas
Government Introduces New External Insurance Act
29/09/2009 In light of the increasingly restrictive regulation in many onshore jurisdictions and the escalating costs of conducting insurance business in both onshore and some offshore insurance centres, the Bahamas has introduced the External Insurance Act 2009, incorporating several innovative features which are unique to the jurisdiction.
Canada
Who Is Watching the Watchers?
13/10/2009 The Office of the Privacy Commissioner of Canada recently issued its Guidance on Covert Video Surveillance in the Private Sector, setting out what it considers to be the requirements and guidelines for covert video surveillance use. An understanding of this guidance is important for everyone engaged in video surveillance, including insurers.
Major Regulatory Changes Affecting Insurance Branches
01/09/2009 The federal legislation regulating most insurers and all branches is overhauled every five years, with the last such overhaul fundamentally clarifying and amending the regulations for branches. This update discusses the clarifications and amendments that should be of particular interest to branches and highlights some decisions that branches in run-off should consider.
New Rules on Outsourcing Business Activities
21/07/2009 The Office of the Superintendent of Financial Institutions recently revised its Guideline B-10, Outsourcing of Business Activities, Functions and Processes. Although the outsourcing guideline makes outsourcing of business activities easier, financial institutions, including insurance companies and branches, may reconsider whether the changes made are actually beneficial to their businesses.
Full Disclosure: Proposed Changes to Segregated Fund Sales
23/06/2009 The Joint Forum of Financial Market Regulators recently assessed disclosure of segregated funds. The forum's view is that the current disclosure regime is inadequate. Specifically, it found that the current disclosure regime does not give meaningful information to fund investors before investors make purchase decisions.
Economic Turmoil Highlights Importance of Commercial Title Insurance
09/06/2009 With the slowdown in the wider economy resulting in reductions in real estate values, lawyers for purchasers and vendors of real property are spending more time on the basics. Specifically, title insurance is the focus of renewed attention as parties want to ensure that their interests are sufficiently protected.
Insurance Company Mergers: A Regulatory Guide
26/05/2009 The acquisition of insurance companies in Canada is subject to various reviews, including review under the Competition Act. If the acquirer is non-Canadian, an Investment Canada Act review is also likely. When planning an acquisition of a Canadian insurance company - or its assets - care must be taken to ensure that transaction timelines permit these reviews to be completed in a timely manner.
China
Insurance Companies Await Regulator's Rules on Private Equity
15/09/2009 Industry experts expect the China Insurance Regulatory Commission to announce keenly awaited rules on private equity investment by insurance companies. Large insurance companies in particular will be considering the example of the Ping An Group as a possible model for building a financial platform for private equity investment.
Investing in Chinese Insurance Companies
25/08/2009 The rapid development of the market and the trend towards financial deregulation have encouraged foreign financial institutions to seek to invest in Chinese insurance companies. However, a would-be investor must understand the China Insurance Regulatory Commission regulations that apply to a foreign insurance company's equity investment in a Chinese target.
Can Chinese Residents Buy a Policy Overseas?
04/08/2009 Encouraged by the significant potential returns on offer in the Chinese insurance market, foreign insurers have sought to market their insurance products in China, but would-be market entrants should be aware of the barriers and potential legal risks for overseas companies. The legality of a purchase of a foreign life insurance policy is likely to depend on whether the insurance activities were undertaken in China.
Qualifications for Senior Managers in Insurance Companies: Who Makes the Grade?
21/07/2009 Lawyers often face a particular problem when a foreign investor wishes to nominate personnel to positions in a Chinese insurance company in which they have invested. The China Insurance Regulatory Commission has issued explicit provisions on the qualification requirements that apply to certain positions in insurance institutions.
New Requirements for Travel Agencies' Liability Insurance
09/06/2009 The National Tourism Administration and the China Insurance Regulatory Commission have promulgated for public comment the draft Administrative Measures for Liability Insurance of Travel Agencies, which provide that travel agencies legitimately established in mainland China should buy compulsory travel agency liability insurance.
China Insurance Regulatory Commission: Functions and Responsibilities
26/05/2009 China's insurance regulation system is fraught with misunderstandings for companies and lawyers from other jurisdictions, particularly if they assume that the China Insurance Regulatory Commission's powers are similar to those of foreign regulators, such as the US Securities and Exchange Commission. Understanding the main regulator's role and its power to intervene can help to avoid problems.
India
Recent Developments in the Health Insurance Market
25/08/2009 The health insurance market has shown positive growth rates in recent years and is projected to grow at a rate of 31.5% during the period 2007 to 2015. This update summarizes the regulatory framework for health insurance and analyzes the insurance regulator's recent circular of March 31 2009. It also looks at the market scenario for health insurance and identifies certain regulatory issues.
Free Look Cancellations of Health Insurance Policies
04/08/2009 Free look periods are applicable to health insurance policies and other policies issued by life insurers that have a deferred coverage of risk. The Insurance Regulatory and Development Authority recently issued a circular which mandates that health insurance policies must also provide a free look period and directs life insurers not to deduct a proportionate risk premium in cases where the policy is cancelled during this period.
Proposed Bancassurance Reforms
28/07/2009 The Insurance Regulatory and Development Authority recently set up a committee to examine the scope, content and objective of a new set of regulations for the bancassurance model. The committee has been set up in response to requests from insurers to relax the requirement that a bank can enter into a bancassurance arrangement with only one life or one general insurer or one life and one general insurer.
Standardization of ULIP Charges: Proposed Reforms
21/07/2009 The Insurance Regulatory and Development Authority has taken recent steps towards standardizing the various charges applicable to unit-linked insurance policies (ULIPs). This update focuses on the authority's establishment of a panel of actuaries and the recommendations made by this panel for standardizing and reducing the number of charges on ULIPs.
Partial De-tariffication: Greater Flexibility for Insurers
14/04/2009 The progress of the insurance market's movement away from the tariff-based regime has been somewhat halted. However, at the beginning of 2009 a measure of flexibility for insurers was introduced. The Insurance Regulatory and Development Authority has permitted an amendment to certain Tariff Advisory Committee-mandated forms for the fire, engineering, motor (own-damage) and industrial all risks sections of policies.
New Regulations for Insurers Establishing Liaison Offices Abroad
07/04/2009 Based on market feedback and experience, the Insurance Regulatory and Development Authority recently issued revised guidelines concerning the establishment of overseas liaison offices by Indian insurers. Although it is still early days, the imposed restrictions have already begun to draw questions as to why Indian insurers are not allowed greater flexibility.
Finland
D&O Liability Insurance: As Complicated as the Risks Covered
23/06/2009 The banking crisis in the early 1990s resulted in many extensive liability trials, in which even ordinary people could suddenly be faced with multimillion-euro claims. Thereafter, no director could afford to remain uninformed on issues relating to liability and most sought insurance against the liability risks that corporate activity entails. Today, directors' and officers' coverage constitutes an important part of corporate governance.
Provisions on Rights of Subrogation to be Clarified
10/03/2009 Subrogation arises when an insurance company pays the insured under the provisions of an insurance policy so as to benefit from the insured's rights against a third party. A recent case highlighted the inadequacy of the provisions of the Insurance Contracts Act regaring the question of whether the provisions on subrogation are to be considered peremptory. The government is preparing a bill to clarify the situation.
United Kingdom
Contra Proferentem Principle Applies to Ambiguous Questions in Proposal Form
27/10/2009 The High Court recently considered whether ambiguous questions in a proposal form for a contract of insurance could be construed by following the contra proferentem principle without the need for the court to decide upon the correct interpretation of the questions.
Obtaining Sanction for Solvent Schemes of Arrangement
29/09/2009 A surprise decision of the Scottish Outer House of the Court of Session has cast doubt on the ability of insurers to obtain sanction for solvent schemes of arrangement, particularly in circumstances where the scheme involves incurred but not reported losses claims.
Court of Appeal Finds Alzheimer's Disease No Excuse For Insurance Fraud
18/08/2009 The Court of Appeal recently held that an underwriting agent who suffered from Alzheimer's disease had either conspired with others to defraud his principals or that he had given dishonest assistance to others in breach of his fiduciary duty to them. It held that it was no defence that his dishonest actions could be excused by intermittent forgetfulness caused by the dieases.
House of Lords Overturns Court of Appeal Decision in Wasa v Lexington
11/08/2009 The House of Lords has decided in the long-running and often controversial case of Wasa v Lexington. The decision suggests that the existence of back-to-back contracts will not necessarily mean that a reinsurer will find that it is obliged to indemnify its reinsureds for losses that occur outside the period of cover of the reinsurance.
Interpreting the Drop-Down Clause in a Master Policy
07/07/2009 In a recent case the claimant sought to recover the balance of its legal costs from defendant XL Insurance Company under a master policy when its local policy, taken out with XL Select, was exhausted. It also sought a declaration that it was entitled to be indemnified by XL in respect of potential damages to a third party and its costs of defence.
Role of Excess Insurers in Proceedings Between Insured, Broker and Sub-broker
26/05/2009 In a recent decision the Court of Appeal held that although no claims had been pursued against the excess insurers, the effective management of the litigation required their participation. It found that the agreed issues for trial would require the excess insurers to provide documents and evidence, even if they were not joined as parties, and it was only a small step from this to joinder.
France
Duty of Caveat to Apply to Life Insurance
01/09/2009 To enable a consumer to "be provided with whatever information is necessary to enable him or her to choose the contract best suited to his or her needs", the Third Non-life Insurance Directive, consolidated by the EU Insurance Mediation Directive, details the information which must be transmitted to the individual before signing the contract. Furthermore, the directive reinforces the insurance intermediary's duty of caveat.
Facilitation of the Interruption of the Statute of Limitations
02/06/2009 In a recent decision the Third Civil Division of the Court of Cassation fell into step with the other divisions of the court and facilitated the interruption of the statute of limitations. The decision shows the court's desire to make it easier for policyholders to interrupt the statute of limitations.
Nullity Exception Can Be Raised within Limitation Period Notwithstanding Performance
10/03/2009 The Second Civil Division of the Court of Cassation has clarified the conditions under which insurers can assert the nullity exception to an insurance contract. The court held that nullity based on Article L113-8 of the Insurance Code can be raised as an exception within the two-year limitation period notwithstanding contractual performance by the insurer.
Russia
Compulsory Third-Party Motor Liability Insurance: Joining the Green Card System
03/02/2009 Russia has finally joined the international civil liability motor insurance system, known as the 'green card' system. As of the start of 2009, 12 Russian insurers had obtained a licence to issue green card policies. This type of insurance is not compulsory under Russian law and insurers wishing to conduct this line of business must comply with strict conditions.
Chile
Judgment Confirms General Practice of Insurance Subrogation
03/03/2009 The Santiago Court of Appeal recently issued a judgment that confirmed the general practice of insurance subrogation. The insurer acted on a subrogation basis in order to recover the insurance indemnity paid to the policy beneficiary. When the first instance court ordered the defendant to reimburse the insurer, the defendant appealed on several grounds.
Hong Kong
Claims under Insurance Contracts: Right to Appeal
06/10/2009 Claims under insurance contracts are generally claims for damages for breach of contract and are generally unliquidated. A recent Court of Appeal ruling shows that even if an indemnity claim is for HK$1 million or more, the insured does not have an automatic right to appeal against an unfavourable decision from the Court of Appeal.
Further Court Decision on Warranties in Insurance Contracts
30/06/2009 The Court of First Instance recently held that any breach of an insurance warranty (including any unintentional breach) would entitle an insurer to deny liability under the policy. Together with another recent decision, this demonstrates that the Hong Kong courts are adopting a strict line with regard to the enforcement of warranties in insurance contracts.
Court of Appeal Rules on Warranties in Insurance Contracts
16/06/2009 A recent Court of Appeal decision shows that the court is adopting a strict view of enforcement warranties in contracts of insurance. It confirms that an insurance warranty must be strictly complied with and that non-compliance with an insurance warranty, including an unintentional breach, will discharge the insurer from its obligations.
Insurers Bringing Claims for Recovery of Post-judgment Interest
07/04/2009 The Court of Final Appeal recently ruled in a case arising from injury caused by negligent driving, analyzing the position of the driver's employer and the employer's insurer. The court considered whether an insurer is entitled to recover post-judgment interest from a third-party tortfeasor that is later held to be liable for the judgment debt.
High Court Reinforces Effect of Non-contribution Clause
24/03/2009 A recent High Court judgment reaffirms the effect of a non-contribution clause in an insurance policy and demonstrates circumstances in which an insurer may be permitted to be joined as a party to ongoing proceedings in order to protect its interests.
Argentina
Insurance Regulator Issues Decision in Claim Against Insurance Agent
28/07/2009 Insurance agents are considered agents of insurers and can include financial institutions and general sales companies. The insurance regulator recently penalized an Argentine subsidiary of a US supermarket which acted as an insurance agent. By presenting itself as an insurance company, the insurance agent exceeded its role granted by law.
Penalties for Offshore Insurance Use: A Recent Precedent
09/06/2009 Individuals and assets domiciled or located in Argentina must be insured by an Argentine insurance company through an insurance policy issued in Argentina. In a recent case the insured had bought a life insurance policy with a US insurer, resulting in the government imposing fines on both the insured and the intermediaries.
Civil Plenary Decision on Applicable Interest Rate: Effect on Insurers
31/03/2009 In a recent plenary decision the Civil Court of Appeals considered a new position for calculating default interest. If the new position is confirmed, it is likely that when dealing with the settlement of damages in cases of tortious liability, the amounts awarded in judgments will be increased by approximately 50%. This will have an impact on the reserves of insurance companies.
Medical Malpractice Insurance
10/02/2009 According to recent reports from the Insurance Regulator, there are some companies in the market that are not authorized or controlled by the regulator, which are selling medical malpractice insurance. Both the Insurance Regulator and the courts have fined medical associations for selling insurance through 'supportive funds', which are in breach of Act 20.091.
New Law and Jurisdiction Requirements for Reinsurance Contracts
13/01/2009 The Insurance Regulatory Agency recently issued Resolution 33.320/2008, which establishes that reinsurance contracts held by local insurers must conform to Argentine law and jurisdiction. This resolution poses a number of questions for reinsurers, since it is not clear what happens if a contract containing a foreign jurisdiction clause expires and is renewed.
Italy
Civil Code Amendment Affects Long-Term Insurance Contracts
08/09/2009 The Law on the Development and Internationalization of Companies and the Energy Sector has amended Article 1899 of the Civil Code, which relates to the duration of insurance cover. It makes provision for reductions in premium in respect of long-term coverage and clarifies the terms on which an insured may withdraw from a contract of over five years' duration.
Regulator Issues Draft Rules on Compensation Policies
18/08/2009 Italy's insurance regulator has issued a draft regulation on insurance companies' compensation policies, stating that they must meet long-term objectives of profitability and business equilibrium and must avoid excessive exposure to short-term risk. Specific rules apply to personnel, internal controls managers, actuaries and even insurance and reinsurance intermediaries and suppliers of outsourcing services.
ISVAP: Equal Treatment for Men and Women in Access to Insurance Services
11/08/2009 A new regulation from the Istituto per la vigilanza sulle assicurazioni private e di interesse collettivo, the organization with authority over Italy's insurance sector, aims to guarantee equal treatment between men and women in access to insurance services, specifically in respect of premiums and services offered.
The problematic coexistence of loss occurrence and claims-made clauses
23/06/2009 Despite a 2005 Court of Cassation decision on their validity, claims-made clauses continue to present problems for insurers and insureds. The Genoa Court recently examined such a clause in light of the Civil Code and considered, among other things, whether its inclusion deprived an insurance contract of its basic rationale.
Regulator Publishes Anti-crisis Decree
24/03/2009 Italy's insurance regulator has published a document containing urgent measures for tackling the recent economic crisis. The most innovative aspect of the new regulations is that they allow insurance companies to refrain from aligning the budget value of short-term financial instruments with the price deducible from market trends at the end of the year.
European Commission Rules on Italian Motor Liability Insurance Infractions
17/03/2009 The advocate general has filed conclusions on the proceedings for infraction brought by the European Commission against Italy regarding motor liability insurance. Among other things, the commission held that the fining of insurance companies that refuse to enter into an insurance contract with certain customers in certain regions contravenes the EU Treaty and prevents access to the Italian market.
Israel
Claims Handling: Commissioner of Insurance Issues New Directives
27/10/2009 The commissioner of insurance recently published new directives concerning claims handling and public appeals management by various institutional bodies, including insurance companies. Within the framework of the new directives, it is explained that claim settlements are an essential part of insurance company business and it is important to establish a clear set of rules which will apply to the settlement process.
Insurance Fraud to Reduce Applicable Deductible Releases Insurers from All Liability
08/09/2009 In a recent judgment the Tel Aviv Magistrates Court denied an insurance claim on the grounds that the insured had provided false information regarding the identity of the driver of the insured car. The false information was provided in order to try to avoid payment of the high deductible applicable to damages caused by a young driver.
Extra-contractual Exposure Due to Wrongful Denial
30/06/2009 The Haifa District Court has ruled that an insurer which failed to pay insurance benefits on time may be obliged to compensate the insured for the damage suffered as a result of the delay. The ruling necessitates a review of declination procedures and requires insurers to consider, before declining coverage, whether the declination is well founded.
D&O Insurance Policy Limit Acts as Factor in Settlement Approval
21/04/2009 The Israeli Trade Bank Ltd collapsed following an embezzlement perpetrated by one of its clerks. A claim was filed against the bank's directors on account of their alleged failure to prevent the embezzlement or detect it in its early stages. An agreement was reached with the directors and their directors' and officers' (D&O) liability insurer. However, the court took issue with the limit of liability set in the D&O liability policy.
Prior Knowledge and Defence Costs under D&O Liability Insurance
24/02/2009 In a recent case a defamation claim was filed against the appellant in the magistrates' court on account of his actions when serving as head of a local council. At the time the appellant was insured under a directors' and officers' local council liability policy; however, the insurer declined coverage, alleging that the appellant was aware of the potential claim against him prior to the policy's inception date.
Declination of Coverage - Directives and Limitations
13/01/2009 Several years ago the commissioner of insurance issued two directives regarding an insurer's duty upon declination of coverage. Recently, several court rulings were handed down by the lower courts which discussed the implementation of the commissioner's directives. The rulings demonstrate that a declination of coverage letter should be drafted only after a thorough examination of all relevant facts.
USA
Court Rules on Allocation of Damages Occuring Across Multiple Policy Periods
11/08/2009 A US court recently held that where an insured "incurs covered costs as a result of ongoing environmental contamination occurring over more than one year and the insurer provided coverage for less than the full period of years in which contamination occurred", the loss should be pro rated among all the insurers on the risk during the relevant period.
Sixth Circuit Confirms Denial of Coverage for Arbitration
04/08/2009 The Sixth Circuit recently affirmed a district court decision granting summary judgment to a professional liability insurer where it provided a defence in a state court action, but denied coverage in a subsequent related arbitration, even though the two proceedings against the plaintiff had been based on similar conduct.
Insurer's Disclaimer Timely and Proper Despite Insured's Late Notice of Claim
28/07/2009 In finding an insurer's disclaimer timely and proper despite the lack of prejudice resulting from the insured's late notice of claim, a US appellate court affirmed that "an insurer that does not receive timely notice in accordance with a policy provision may disclaim coverage, whether it is prejudiced by the delay or not".
Northeast Blackout: Summary Judgment in Favour of Insurer Reversed
14/07/2009 A New Jersey appellate court recently held that the term 'physical damage', as used in a policy covering damage due to the loss of electric power, was ambiguous in the context of the Northeast Blackout of 2003 involving a loss of power that was not caused by permanent physical damage to the electrical plant and equipment.
Insurer's Failure to Offer More Than Policy Limits Is Not Bad Faith
07/07/2009 The Ninth Circuit recently ruled that an insurer's duty to attempt to effect settlement in good faith applies only to settlement within policy limits. It further held that a claim for bad faith must be supported by evidence of deception, dishonesty or intentional disregard for the insured's interest under Washington law.
Availability of Consequential Damages Not Limited to Commercial Property Insurance
30/06/2009 A New York court has recently confirmed that recovery of consequential damages under Bi-Economy is not limited to commercial property insurance claims. It held that consequential damages may be asserted in an insurance contract context as long as they were reasonably foreseeable.
Intellectual Property
Austria
Peer-to-Peer File Sharing: Nothing to Worry About for Music Pirates?
26/10/2009 The Supreme Court recently clarified potentially far-reaching aspects of copyright-related information rights in the internet age. An Austrian copyright collecting society identified a number of dynamic internet protocol addresses that had unlawfully shared copyright-protected material. It requested that the internet access provider identify the holders of the respective addresses at the relevant dates and times, but it declined to comply.
Prohibiting Domain Names Based on Trademark Rights
01/06/2009 The Trademarks Act provides that only the trademark owner has the right to use a registered trademark for goods or services for which it has registered the mark. Thus, third parties can use the same or similar sign only if there is no risk of confusion with the goods and services of the trademark owner. In two recent decisions the Supreme Court confirmed this principle in respect of domain names.
China
Obtaining Recognition for a Well-Known Trademark
26/10/2009 Under Chinese law, well-known trademarks receive special legal protection. However, a brand owner cannot unilaterally apply for a declaration that a trademark is well known under Chinese law. Such a determination can be made only in the context of administrative or judicial proceedings. An official interpretation aims to resolve the uncertainty surrounding well-known trademarks in China.
China and Japan Sign Second IP Agreement
28/09/2009 The Japanese Ministry of Trade, Economy and Industry and China's State Administration for Industry and Commerce have signed a memorandum of understanding on IP protection. Closer links are intended to foster joint efforts in areas such as trademark registration systems, the policing of counterfeit products and the prevention of unfair competition.
Reducing the Risk of IP Rights Leakage
29/06/2009 Legal measures are a key element of IP rights protection, but more is needed to keep a company's safeguards watertight. Businesses must take a holistic approach in developing a rights strategy that includes operational protocols and procedures, both internally and across the relevant supply chain and distribution network.
Supreme People's Court Guidelines Promise Tougher IP Rights Enforcement
05/05/2009 New guidelines from the Supreme People's Court include the announcement of its intention to establish special unified tribunals for IP rights disputes and a unified IP appellate court. They also encourage courts to use their powers to grant interim remedies and make substantial damages awards, confiscatory orders and other remedial measures.
Major Changes in Third Revision of Patent Law
09/02/2009 The most recent revisions to the People's Republic of China (PRC) Patent Law were passed to bring the law further into line with international standards and other PRC regulations. The recent revisions are also part of a national strategy to assist Chinese companies move towards greater innovation and to strengthen China's legislative and enforcement framework for the protection of IP rights.
Recognition and Protection of Well-Known Trademarks
12/01/2009 The Supreme People’s Court has issued for public consultation a new draft of the Interpretation of Several Issues Regarding Application of Laws in Recognition and Protection of Well-Known Trademarks in Trademark-Related Civil Disputes for public consultation. It aims to set the criteria for the recognition of well-known trademarks and to standardize the remedies available for trademark owners.
Denmark
Court Refuses to Comment Further in Confusingly Similar COMMA Case
28/09/2009 In a recent case the plaintiff, a German owner of the tardemark COMMA, filed a claim to prevent the Danish defendant's use of the mark KOMMA. Both parties claimed that the other should delete its registrations in certain classes. Not surprisingly, the court found that the trademarks COMMA and KOMMA were confusingly similar.
Trademark Battle Ensues between Ice Cream Kings
21/09/2009 Since 1992 Danish company Hjem-Is has owned the trademark registration KING COOL for goods in, among others, Class 30, and has marketed ice cream under the same designation. When Unilever applied for Danish trademark registration of the trademark KING CONE for Class 30 and began marketing ice cream, including ice cream cones, under this designation, Hjem-Is sued for trademark violation.
Defendants Bag Victory in Hermés 'Birkin' Copyright Case
14/09/2009 The Maritime and Commercial Court recently ruled in two cases dealing with imitations of the iconic Hermés 'Birkin' handbag. Despite finding that the appearance of the bag implied copyright protection, when comparing the designs as a whole the court found for the defendants in both matters.
Hasbro Wins Trademark Battle in Robot War
07/09/2009 International toy group Hasbro has owned the EU trademark TRANSFORMERS since 1996 and the Danish registrations THE TRANSFORMERS and AUTOBOT since 1987. When Danish toy wholesaler VN Legetøj distributed its catalogue containing toys under the name TRANSFORMAX, Hasbro sued for trademark infringement and infringement of its rights under the Marketing Act.
Court Finds No Infringement in Wine Bottle Battle
08/06/2009 Since 2001 Udesen Danmark has manufactured and sold wine in bottles with pewter labels that describe an event, activity or special occasion. When Excellent Wine began selling wine in bottles with pewter labels that referred to the same subjects as Udesen's wines, Udesen claimed for infringement and obtained an injunction.
Court Upholds Jetmobile's IP Rights in Software Case
18/05/2009 In a recent decision, the Maritime and Commercial Court found that EuroForm's continued use of the designation JetCAPS was a violation of Jetmobile's trademark rights in that mark. In additon, it held that as some of the wording in EuroForm's and Jetmobile's manual was identical, Euroform had violated Jetmobile's rights under the Copyright Act.
Greece
Hermès Triumphs in Jewellery Case
18/05/2009 The Court of Appeals for the Peloponnesian Region recently issued an important ruling in trademark infringement litigation between French luxury goods firm and fashion house Hermès and the owner of a Greek jewellery shop. The court held that trademark dilution is feasible when an indication that is confusingly similar to a prior registered right is used, notwithstanding the locality in which it is used.
Well-Known MOUYER Trademark Safeguarded
30/03/2009 Stam Mouyer SA filed a successful petition for an injunction against I Mouyer LLC in order to enjoin the latter from (i) using MOUYER as a trademark, trade name, company name, distinguishing title or features of origin, and (ii) making any representations to the effect that it was related to the petitioner, which owns a well-known brand of children's shoes in Greece.
Carrefour Retains CHAMPION Trademark Rights
26/01/2009 The Athens Administrative Court of First Instance has reversed a Trademark Committee decision and found in favour of Carrefour in two rulings - one accepting the trademark CHAMPION filed by Carrefour in Classes 3, 30 (except tea) and 31 and another granting the cancellation petition filed by Carrefour against the trademark CHAMPION, which belonged to Champion Products Europe Limited.
India
Well-Known Trademarks: Consumer Recollection is Key
01/06/2009 When a well-known mark is adopted by someone other than the registered proprietor, a consumer of average intelligence and imperfect recollection might consider it an extension of the brand. This can result in a dilution of the goodwill and reputation enjoyed by the well-known trademark, which in turn can lead to confusion and deception. This issue was recenty addressed in a hearing before the Chennai IP Appellate Board.
Roche Denied Injunction on Appeal
26/05/2009 In March 2008 the Single Judge Bench of the Delhi High Court declined to grant an interim injunction to Roche against Cipla and its production of the drug Erlotinib. Instead, the court found in favour of Cipla's claim of patent invalidity and took into account the public interest in the drug. On appeal, the matter was heard by the Division Bench of the High Court.
Interim Injunction Granted against Assistant Registrar of Trademarks
18/05/2009 Section 95 of the Trademarks Act 1999 prescribes certain conditions that must be met before interim orders are handed out in appeal proceedings. In a recent case before the Ahmedabad IP Appellate Board these conditions were the subject of consideration.
Roche Successfully Obtains Patent for Hepatitis C Drug
11/05/2009 Swiss drug major F Hoffman-La Roche has successfully defeated post-grant oppositions filed by pharmaceutical major Wockhardt and Mumbai-based civil society group Sankalp to secure a patent for its hepatitis drug Pegasys. Thus, Pegasys has become the first drug to obtain a product patent since the new patent regime became operational in 2005.
Geographical Indications Registry Admits More Products
05/05/2009 Geographical indications reflect the legislature's attempt to protect traditional art forms and products which have certain unique characteristics that are specific to a region or locality, or which owe their origins to that region. India has a rich wealth of traditional arts, crafts and food products which deserve protection. As such, more and more items are being added to the Geographical Indications Registry.
Defining 'Literary Works' for Copyright Protection
27/04/2009 Although the Copyright Act 1957 provides an inclusive definition of the term 'literary works', it does not set down which works are deemed to be literary. However, the explanatory notes state that the term includes all works expressed in writing, regardless of literary merit. Thus, the definition is not exhaustive and all literary works satisfying the criterion of originality are entitled to protection.
Korea
Design Protection Act Amended
13/07/2009 An amendment to the Korean Design Protection Act was recently announced. The key objectives of the amendment include the adoption of a re-examination procedure, the introduction of a sliding scale for the payment of late fees and the increase of penalties for divulging design secrets.
Constitutional Court Nullifies Article 7(3) of the Trademark Act
26/05/2009 In line with the recent nullification of Article 7(3) of the Trademark Act, a pending junior trademark application or potential application can now be registered even where a senior trademark registration has been invalidated within one year prior to the filing of the junior application, or where a senior trademark registration was valid at the time of the application but invalidated thereafter.
Determining Reasonable Remuneration for In-Service Inventions
06/04/2009 In Korea, an employee has the right to obtain 'reasonable remuneration' for an in-service invention when he or she transfers the patent rights or grants an exclusive licence to the employer in accordance with a contract or service regulation. A recent district court opinion provides insight as to how reasonable remuneration for patent use should be determined.
Court Denies Website's Liability for Sellers' Unfair Competition Violations
02/02/2009 The Seoul Central District Court has denied K2's claim for damages against Interpark for allegedly facilitating sales of infringing products by individual sellers on its open-market website. However, the court did acknowledge that the sellers’ use of marks identical or similar to those of K2 constituted unfair competitive activity under the Unfair Competition Prevention and Trade Secret Protection Act.
Key Changes to Patent Act Implemented
26/01/2009 The National Assembly recently passed a new bill that implements several key changes to the Patent Act. These changes will give applicants more options and increased flexibility, particularly at the final rejection (or last preliminary rejection) stage of prosecution before the Korean Intellectual Property Office.
South Africa
Supreme Court of Appeal Clarifies Status of Registered Descriptive Trademarks
05/10/2009 A recent Supreme Court of Appeal judgment is bad news for highly descriptive mark owners, as the court emphasized the function of a trademark as a badge of origin. This is particularly satisfying for those who feared that South Africa was becoming unique in its trademark law following a decade-old judgment which held that the badge of origin function of a trademark had been supplanted by an absolute right.
Controversy over FIFA World Cup 2010 Trademarks
15/06/2009 Countries wishing to host the Fédération Internationale de Football Association (FIFA) World Cup must provide a range of guarantees, including FIFA's freedom to use its trademarks. The South African authorities have been at pains to meet and exceed FIFA's expectations, to the unprecedented extent of declaring certain marks relating to the event 'prohibited' within the meaning of the Merchandise Marks Act 1941.
Court Settles SOUL Spat
16/03/2009 A recent decision underscores the value of a registered trademark and the importance of conducting searches before adopting new marks so as to avoid conflict with marks which may be registered but not yet in use. As a means of providing reasonable certainty to proprietors and potential infringers alike, the registered trademark has an important role - even if certainty remains elusive.
United Kingdom
Kraft/Cadbury and T-Mobile/Orange: Mega-deals and IP Due Diligence
05/10/2009 Two potential deals - Kraft's £10 billion offer for Cadbury, the United Kingdom's main chocolate producer, and the proposed joint venture between T-Mobile and Orange in the UK mobile telecommunications market - have been heralded as signs of a recovering economy. Significant IP assets will undoubtedly figure prominently in the technicalities and devising the correct IP due diligence strategy will be crucial.
Nude Protest Fails to Block Stella McCartney's Perfume Launch
28/09/2009 A dispute between fashion designer Stella MCartney and cosmetics company Nude Brands Limited over McCartney's proposed launch of a new perfume, Stella Nude, is a reminder to rights owners to ensure that requests for consent are carefully considered and receive a clear response. However, the court warned against pushing ahead with brand launches in order to present a fait accompli.
Future-Proofing Your Rights: Royalties, not Residuals, for Digital Repeats
10/08/2009 The High Court has held that repeats of three flagship ITV programmes on the company's digital television channels attracted not a residual flat-rate fee, as they would have done if shown on ITV1, but the lower percentage-rate royalty due for alternative methods of exploitation. Companies dealing with IP rights should consider the importance of 'future-proofing' agreements to protect future income.
High Court Dismisses Crown Use Argument in Patent Infringement Case
03/08/2009 Having been found liable for patent infringement, the defendants in a recent case raised the issue of crown use during the form of order hearing - Section 55 of the Patent Act 1977 provides a defence where certain acts, including the sale of patented products, are performed by a government department. Questions about crown use remained open, but the case emphasizes the need to plead technical arguments early.
L'Oréal v Bellure: Closer to Law of Unfair Competition in Trademark Law?
27/07/2009 Ruling on a referral from the Court of Appeal, the European Court of Justice has held that it is unnecessary to establish either detriment to or a likelihood of confusion with a registered trademark in order for a third party to be considered to be taking unfair advantage of the reputation of that mark under Article 5(2) of the EU Trademarks Directive.
Taking Action against eBay Fakes
22/06/2009 A recent case against a trader who masterminded a business selling fake designer products on the auction website eBay raises the question of what IP rights owners can do to protect their business against the effect of counterfeit products offered for sale on online auction sites. What responsibility do auction sites have to rights owners whose rights are infringed or whose brand is diluted?
Hungary
ILKA FITT Confusingly Similar to MILKA
27/04/2009 The Metropolitan Court has rejected an application to register the trademark ILKA FITT for mineral and aerated waters on the grounds of likely confusion with the well-known trademark MILKA for chocolate. It held that the marks were visually, phonetically and conceptually similar and referred to the European Court of Justice's ruling in Davidoff that trademarks with a reputation are entitled to special protection.
Board of Appeal: Medical Preparations not Similar to Cosmetics
14/04/2009 The Metropolitan Board of Appeal has reversed a decision of the Metropolitan Court in which the latter had refused to register the mark CORPRIL on the grounds that it was confusingly similar to the earlier registered trademark CORPAL. Among other things, the board held that the court had failed to examine the nature of the goods or their intended use.
Malaysia
Court of Appeal Overturns Orders for Discovery
12/10/2009 The Court of Appeal recently delivered its grounds of judgment in two appeals against High Court orders for discovery. The orders directed the appellant to produce certain documents which the respondent claimed were in the appellant's possession, custody or power, and which evidenced the importation of 1,500 cartons of alleged counterfeit Chinese wine.
McLaren Loses Appeal before Federal Court for Not Being an 'Aggrieved Person'
27/07/2009 A recent Federal Court decision dealt with the issue of what constitutes an 'aggrieved person' for the purposes of rectifying the Trademarks Register. The appellant's application to expunge the respondent's deceptively similar mark was made under Sections 45(1)(a) and 46(1) of the Trademarks Act 1976. To succeed under either provision, the party must prove that it is a person aggrieved under either section.
High Court Rules in Infringement Case
22/06/2009 During a raid at a night market officers from the Ministry of Domestic Trade and Consumer Affairs arrested Chong Kak Hau and seized copies of pirated discs. At first instance the Sessions Court found Hau guilty of 10 charges under the Copyright Act; in a recent appeal, the High Court affirmed the lower court's findings as the appellant had failed to raise reasonable doubt as to the prosecution's case.
High Court Finds Copyright Infringement in Anti-theft System Case
15/06/2009 In a recent case the plaintiff, a manufacturer and distributor of anti-theft systems, adduced evidence that the defendant, a sole proprietor selling car accessories, had infringed the copyright in the plaintiff's works by selling and offering for sale metal components of an anti-theft system which were entire or substantial reproductions of the works without the plaintiff's licence or consent.
McDonald's Loses Exclusive Right to Prefix 'Mc'
11/05/2009 In September 2006 the Kuala Lumpur High Court ruled that fast-food company McDonald's had an exclusive right to use the prefix 'Mc'. The court ordered McCurry Restaurant to stop using the prefix as part of its trade name and awarded damages and costs to McDonald's. McCurry Restaurant appealed to the Malaysia Court of Appeal, which recently overturned the high court's decision.
New Zealand
US and New Zealand Patent Applications: Where to File First
07/09/2009 A New Zealand company can sometimes file its first patent application in a country other than New Zealand. Filing first in the United States can provide certain advantages, but because New Zealand attorneys generally act for exporters, most of their drafting and subsequent patent prosecution is designed around gaining patent protection in other overseas jurisdictions.
Provisional or Complete Patent Specification? Alternative Filing Strategies Explained
01/09/2009 A typical initial patent filing strategy is to file a provisional patent specification, followed by a complete specification 12 months later. This strategy works well for most applicants, as it enables them to develop the invention and explore potential markets before investing in a complete specification. However, filing a complete specification in the first instance can have advantages too.
Illicit Use or Fair Trading? A Lesson for Brand Owners
15/06/2009 The controversy surrounding fashion company Illicit Clothing and the launch of a new cola drink called 'Illicit' by manufacturer Demon Drinks is a timely reminder of the problems facing brand owners. It underlines the value of 'future-proofing' a brand by registering a mark in relation to all goods or services of interest.
One Step Closer to International IP Treaties
11/05/2009 The Trademarks (International Treaties and Enforcement) Amendment Bill has had its first reading in Parliament. If passed, it would enable New Zealand to join the Nice Agreement, the Singapore Treaty and the Madrid Protocol. Among other things, it would allow the commissioner of trademarks to reclassify approximately 1,300 trademark registrations which do not comply with the Nice Classification system.
Opinions Divided on the Subject of Subjectivity
06/04/2009 A Supreme Court decision on confusingly similar marks determined the weight that an appeal court must give to lower courts' value judgements, confirming that an appellate court is entitled to form its own opinion "even if it [is] a conclusion on which minds might reasonably differ". However, two subsequent cases demonstrate that opinions still vary - even among the judiciary.
The Ka Mate Haka: Generic IP Law versus Indigneous Rights
09/03/2009 The wide reputation of the Ka Mate haka, which is performed by the All Blacks before rugby games, has made it an attractive marketing tool, leading to misuse by a number of traders. As a result, the Ngāti Toa tribe is hopeful that the settlement agreement recently signed with the government will prevent misappropriation and culturally inappropriate use of the haka.
Switzerland
Regional Exhaustion Introduced into Patent Law
03/08/2009 A recent amendment to IP regulation means that the principle of regional exhaustion applies to patented goods imported into Switzerland from European Economic Area countries. If the patent has only minor significance to the functionality of the goods, they will be subject to international exhaustion. However, patented goods with regulated prices, in particular pharmaceuticals, continue to be subject to national exhaustion.
Protection of Sound Marks
27/07/2009 In a recent decision, the Federal Supreme Court dealt for the first time with the issue of whether a sound mark that does not contain verbal elements qualifies for trademark protection. The court decided that sound marks are to be treated like word marks and that they are often inherently distinctive.
When are Trademarks with Geographical Content Not Misleading?
18/05/2009 Under Article 2(c) of the Trademarks Act, misleading signs are excluded from protection. In the past, case law has considered a sign to be misleading if it leads the addressee wrongly to believe that the sign denotes the geographical origin of the product to which it is ascribed. The Federal Administrative Court has recently ruled on two cases addressing the question of misleading geographical elements.
Panton Chair: The End of the Three-Dimensional Trademark?
05/05/2009 The Federal Supreme Court has once again raised the requirements for a successful application for a three-dimensional trademark. The Panton Chair decision makes it almost impossible to register three-dimensional trademarks for everyday products, since the argument that a wide variety of forms already exist in the relevant product field (with some inherently similar characteristics) will always be available.
Nullity of Defensive Trademarks: The GMAIL Case
09/03/2009 The Supreme Court has outlined some of the circumstances that may constitute evidence of the existence of a defensive trademark. A lack of business activities may indicate the absence of a serious intention to use the mark, while negotiations between the parties may suggest that the purpose of registration was to strengthen the defendant's position in these negotiations.
Protection of Work Results Made Available Online
02/03/2009 The Federal Supreme Court recently outlined the conditions under which a party is allowed to exploit the work results of a competitor. Marketable work results are protected only if they qualify as IP rights or if they are reproduced without adequate effort by mere technical means and a comparison with the copied work leads to the conclusion that the producer's effort is worth protecting.
United Arab Emirates
Protecting Rights of Authors, Performers and Phonogram Producers
01/09/2009 In order to control the use and licensing of copyright-protected works in the digital context, owners of such protected works often adopt technological measures such as encryption. These technological measures provide safeguards against the unauthorized use of the works and the removal or alteration of rights management information used for the management of protected copyright.
Government Entities and the Protection of Intellectual Property
20/07/2009 The UAE government has adopted IP measures in line with international best practice. The focus of these measures has been the provision of a platform for companies and private individuals to do business with confidence. However, government ministries and agencies at both federal and emirate level must also be mindful of the need to protect government intellectual property.
Judgment Issued Against Trafficker of Counterfeit Cigarettes
01/06/2009 In a recent case the plaintiff owned a valid registration for the trademark SOVEREIGN to distinguish tobacco, cigarettes and related goods. The defendant's suspect container was filled with approximately 50 cases of cigarettes bearing the SOVEREIGN SUPREME CLASSIC trademark. The plaintiff alleged trademark infringement and sought monetary damages and an order for the destruction of the counterfeit goods.
DED and DSOA Cooperate to Unify Trade Name Registration
09/03/2009 The Dubai Department of Economic Development and the Dubai Silicon Oasis Authority have taken a momentous step towards unifying trade name registration by signing a trade licensing agreement to secure cooperation. This unified approach should bring about a more efficient process and in turn benefit companies that wish to protect an essential component of their assets (ie, their trade name).
Gulf Cooperation Council Trademarks Act Resolves Uncertainty over Use by Licensee
02/03/2009 Ambiguity concerning whether licensee use of a trademark will be adequate to keep the trademark registration alive and to constitute evidence of genuine use has been resolved by the Gulf Cooperation Council Trademarks Act. Article 32 of the act stipulates that a "trademark licence is required to be in writing in order to be valid and recording the licence of trademark usage is not mandatory to validate the licence".
Infrastructure and Budget - Keys to Combating Counterfeiting
19/01/2009 Brand owners are discouraged from taking action against counterfeiters if they are unlikely to win damages. However, a small investment in brand protection may provide substantial savings in the long term and help to sustain what should always remain at the forefront of any brand owner’s mind: brand equity.
Australia
All A-Twitter: Twitter.com and Trademarks
17/08/2009 Twitter, a social networking page through which users sum up current events in their lives in 140-character updates or 'tweets', has proven a fruitful arena for attacks on trademark rights through the registration of marks as usernames. On the face of it, this is nothing new. However, Twitter differs slightly from more familiar forms of online trademark infringement, particularly for the purposes of Australian trademark law.
An Icy Wind Blows Across Copyright in Australia
26/05/2009 The High Court has found that there was no copyright infringement when IceTV - the producer of the IceGuide - reproduced selected time and title information from Nine's programme schedule. The approach taken by the High Court significantly raises the bar for demonstrating authorship in copyright cases where subsistence, or what constitutes a substantial part of the copyright work, is at issue.
Commonsense Approach to Trademark Use and the Beer/Wine Dichotomy Confirmed
05/05/2009 In a recent decision the Full Federal Court addressed three key issues: the extent to which use of a trademark in Australia of a foreign-based trademark can be used to defeat a non-use removal action; the time at which a removal order takes effect; and the question of whether beer and wine are goods of the same description for the purposes of trademark infringement under the Trademarks Act.
Full Federal Court Protects "Look and Feel" of T-shirt Designs
23/02/2009 In a recent case the Full Federal Court found that the copyright in sports-style T-shirt designs, comprising arrangements of text and logos in a circular pattern, was infringed by a rival T-shirt manufacturer that instructed its employees to create T-shirts with the same look and feel, but with different text and logos.
Recent Full Federal Court Decision Permits Parallel Imports into Australia
16/02/2009 A recent Full Federal Court decision shows the limits in the application of copyright law to restrict parallel imports into Australia. In particular, the importation of articles bearing a label, such as a logo on a piece of clothing, will not infringe the copyright in the label. While unfavourable to copyright and trademark owners, the decision is welcomed by parallel importers.
Droit de Suite Scheme Introduced into Parliament
12/01/2009 After a number of inquiries and several years of ongoing debate, the government recently introduced a bill into federal Parliament intended to set up a scheme for granting resale royalty rights (droit de suite) to visual artists. According to proponents of the scheme, it will allow visual artists greater access to the economic benefits that flow from the success of their work when it is resold.
Canada
To Disclaim or Not to Disclaim, That Is the Question
28/09/2009 Pursuant to the Canadian Patent Act, three procedures are available to a patentee for amending the claims of a patent post-grant: a reissue, an ex parte re-examination and a disclaimer. A recent Federal Court judgment has significant implications regarding the risks to Canadian patentees that utilize these post-grant procedures to amend a patent.
Differences Between US and Canadian Patent Law: Effect on Patent Filing Strategies
21/09/2009 Although there are many similarities between US and Canadian patent law, certain significant differences can affect the key decision of whether to file in Canada. For example, the Canadian Patent Act provides for a grace period for pre-filing disclosures; however, there is no on-sale bar and no terminal disclaimer practice.
Board Rejects Amazon.com's One-Click Patent Application
14/09/2009 In a recent decision regarding Amazon.com's One-Click application, the Patent Appeal Board adopted a new approach to statutory subject matter in Canada, including a reversal of the position of the Canadian Intellectual Property Office on the patentability of business methods.
Federal Court Clarifies Final Action and Post-appeal Procedures
07/09/2009 The Federal Court recently ruled that the commissioner of patents must not restart examination of a patent application after the Patent Appeal Board has previously ruled that the defects alleged in a final action are not substantiated. Patent applicants and practitioners must now wait to see whether the clarification of final action and post-appeal procedures provided by the decision will be maintained.
Proposed Amendments to Revise Declaration of Entitlement Requirements
01/09/2009 Proposed amendments to the Patent Rules were recently published for public comment in Part I of the Canada Gazette. Although many of the proposed amendments are essentially editorial in nature, they concern at least one matter of substance: the requirement for a 'declaration of entitlement' in a Canadian patent application.
Federal Court Issues Practice Direction Aimed at Streamlining Complex Litigation
22/06/2009 The Federal Court recently issued a practice direction aimed at streamlining complex litigation. The court's objective is to facilitate, where possible, the scheduling of trials to commence within two years of the start of the proceeding. IP rights holders will readily appreciate that the ability to bring an infringement action to trial and obtain judgment in a timely and cost-effective manner is critical to effective enforcement.
European Union
Judgment on Capacity of Lego Toy Brick to be Three-Dimensional Trademark
09/02/2009 In a recent judgment the European Court of First Instance decided on the capacity of the three-dimensional shape of the well-known Lego toy brick to be protected as a trademark. It applied Article 7(1)(e)(ii) of the Community Trademark Regulation, which provides an absolute ground of refusal for signs which consist exclusively of the shape of the product needed to obtain a technical result.
Ireland
Tangible Tax Relief for Intangible Assets
19/10/2009 The Finance Act 2009 introduced wide-ranging tax relief on capital expenditure incurred by companies on the acquisition of intangible assets in order to enhance Ireland's appeal as a location for the development and exploitation of intellectual property. The provisions will enable a host of companies previously not entitled to tax relief on intangible assets to avail of a tax write-off.
Commercial Court Makes First Community Designs Ruling
08/06/2009 Karen Millen Ltd v Dunnes Stores was the first case in Ireland to be decided under the EU Community Designs Regulation, which provides for a three-year unregistered Community design right and came into force across the European Union in 2002. The unregistered Community design right is particularly relevant to the fashion industry, where a large number of designs enjoy a short market life.
Eircom Tells Filesharers: "Three Strikes and You're Out"
16/03/2009 Internet service provider Eircom has agreed to implement a 'three strikes and you're out' policy against illegal peer-to-peer uploaders and downloaders in order to setlle copyright infringement proceedings taken against it by four major record companies. The case reflects growing unease within the music industry over the scale and cost of illegal downloading.
Japan
IP High Court Changes Rule on Extension of Patent Right
26/10/2009 In the context of registering an extension of patent rights while approval is acquired for safe use, Japan has no equivalent of Section 156 of the US Patent Act, which explicitly restricts the scope of the patent subject to the extension by using the technical term 'active ingredient'. The IP High Court has rejected the Patent Office's previous practice and a number of previous court decisions on the subject.
Crossed in LOVE: No Happy Ending for Defendant in Cosmetics Trademark Case
06/07/2009 The IP High Court has reversed a decision invalidating a trademark registration for the mark LOVECOSME, rejecting claims of similarity to various registered trademarks for LOVE. This case shows the potential difficulties in Patent Office or court interpretations involving trademarks in English or Japanese katakana characters, as English words may be recognized or considered differently in Japanese society.
Supreme Court Rules on Secrecy Protection Orders in Patent Litigation
14/04/2009 The Supreme Court has ruled that a motion for a secrecy protection order may be allowed as part of a provisional injunction to suspend infringement of a patent right or exclusive licence, as such a case may fall within the meaning of the term 'litigation relating to the infringement of a patent right or exclusive licence' under Article 105(4) of the Patent Law
IP High Court Rejects Unjust Enrichment Claim against Government
12/01/2009 The IP High Court has modified a decision in a copyright infringement case in which the Tokyo District Court had upheld claims of damages and unjust enrichment against the government. The appeal court held that although the Legal Affairs Bureau had lent books of maps to visitors and provided space for photocopiers with which the books could be copied, the government had not profited from such activities.
Kenya
Improving the IP Rights Protection Regime
17/08/2009 As both the Industrial Property Institute and the Copyright Board were established to protect intellectual rights, it is logical that these two institutions be merged. This suggested change would mean that the registration and protection of all IP rights were overseen within one institution, thus significantly improving the effectiveness of the IP rights protection regime.
The Case for Formal Registration and Deposit of Copyright Works
05/05/2009 The introduction of a formal system of registration and deposit of copyright works would go a long way towards providing protection to copyright holders, which would then be in a position to enter into financing transactions, sales, assignments and transfers of rights with regards to copyright works without fear of their rights being disputed.
Lithuania
Draft Copyright Reforms Propose Private Copying Levy
14/09/2009 The Ministry of Culture has published draft amendments to the Law on Copyright and Related Rights. The most widely discussed proposal would introduce a private copying levy for personal reproduction and reprographic devices. Importers and manufacturers would be required to pay the levy on products such as CD and DVD burning devices, memory cards, home theatre equipment, MP3 players and hard disks.
Supreme Court Rules on Corporate Names, Trademarks and Domain Names
07/09/2009 In a recent dispute over the exclusive rights to a corporate name, the Supreme Court ruled that such rights may be infringed by a trademark or an unregistered mark containing the corporate name if it is used as a commercial identifier to distinguish goods and services. A domain name that is similar or identical to a corporate name may also be infringing if it is used for commercial identification.
Popularity of Medicinal Product Names Does Not Make Trademarks Customary
26/05/2009 The Court of Appeal held that the name of a medicine can be registered as a trademark even though it is used in everyday language and is associated in some parts of society with painkillers in general. While many EU states have yet to decide whether the names of popular medicines, such as aspirin, can be registered as trademarks, this case sets a strong precedent in Lithuania.
Statutory Compensation for Trademark Infringement Found Unconstitutional
18/05/2009 The Constitutional Court has offered guidance on mechanisms for determining compensation in trademark infringement cases. The court found unconstitutional an article of the Trademarks Law which provides that where an infringer can be shown to have acted with intent, the compensation available may be increased to 200% or 300% of the legal sale price of the legitimate goods or services
Copyright Agreement Constitutes Consent to Name Trademark
11/05/2009 In a recent dispute between a well-known political figure and an alcohol manufacturer, the court found that a trademark owner needs the consent of a famous person to use his or her name, even if the mark uses only the first name, particularly when the public associate certain goods with that person. However, the court held that a copyright agreement may suffice to provide such consent.
Netherlands
Avoiding the Pitfalls of Operating Online
26/10/2009 The Internet enables brand owners to communicate with a global audience, but also enables infringement on a large scale. The use or depiction of protected brands and works in a virtual environment can be actionable just as much as in the real world, including the use or trading by gamers of virtual objects or services that use a brand, design or trade dress from the real world.
Patent Amendment Rules Relaxed by European Patent Convention 2000
12/01/2009 The Hague District Court has recently ruled that as of the European Patent Convention 2000 coming into force, the so-called ‘Spiro/Flamco doctrine’ for partial nullification or maintenance of a patent which was established in Dutch case law no longer applies to European patents.
Turkey
Registering Pharmaceutical Trademarks
17/08/2009 The registration of pharmaceutical product names is regulated by the Ministry of Health. Regardless of whether the name has been registered as a trademark, the Ministry of Health will consider whether there is any likelihood of confusion with an existing authorized pharmaceutical product name. However, should the likelihood of confusion be evaluated with reference to the general public or healthcare professionals?
New Patent Law on the Way
27/04/2009 In Turkey, industrial rights arising out of trademarks, patents, utility models, industrial designs and geographical indications have been protected under decree-laws since 1995. However, after 15 years the need for new legislation has become more urgent for several reasons, including the need to conform with EU legislation.
International
Enhancing Patentability with Designer Experiments
21/09/2009 Most potential patentees understand that an invention must be novel and inventive to be patentable. Therefore, when they develop a new product or process which uses something previously known, it is often is dismissed as being unpatentable. However, good experimental design and appropriately drafted patent specifications can sometimes produce strong, commercially effective patents.
Mexico
Influenza Outbreak Sparks Compulsory Patent Licensing Debate
27/07/2009 Mexico's influenza epidemic in April 2009 prompted the government to use the compulsory patent licensing provisions of the Industrial Property Law for the first time. Manufacturers of generic pharmaceuticals pressed the government to declare the outbreak a 'priority attention disease' within the meaning of the law. In response, many patent owners claimed that public utility licences were unnecessary.
Pharmaceutical Trademarks: The Health Law Pitfall for Applicants
20/04/2009 Many Mexican examiners apply a special criterion for pharmaceutical trademarks: if a more recent trademark does not differ by at least three letters from an earlier mark for similar goods, registration of the recent mark will be denied. This is meant to prevent a successful applicant from being denied product registration under the Health Law, but is out of step with national and international practice.
Senate Considers Competing Patent Reforms
26/01/2009 The Senate is reviewing two bills to amend the Industrial Property Law, proposed by two different political parties. One bill proposes a fundamental review of the law, whereas the other aims to introduce a procedure for opposing patent grants and penalties for abusive practices in the enforcement of invalid patents.
Pakistan
Fighting Piracy and Counterfeiting: Legislation and Organizations
14/09/2009 Pakistan is making ongoing efforts to revise and upgrade its IP legislation. The statutory powers are in place, but the problem of effective enforcement remains. However, the agencies concerned are now empowered to uphold IP rights and eliminate piracy and counterfeiting. This update considers the legislative basis for IP rights enforcement and the entities involved.
Registering and Protecting Rights in the Pharmaceuticals Sector
11/05/2009 Parties that import, export, sell or produce pharmaceutical products must consider the Drugs Act and other sector-specific rules alongside the IP ordinances. Pakistan's framework of regulations on such products sets out rules and guidelines on issues such as parallel imports and repackaging, anti-counterfeiting enforcement and generic substitution.
Spain
Adidas Three-Stripe Mark Protected against Similar Two and Four-Stripe Designs
26/10/2009 The Zaragoza Commercial Court recently rendered its judgment in the trademark infringement case Adidas AG v Almacenes Kaymo SA. The court ruled that the exclusivity of the Adidas three-stripe trademark extends to two and four-stripe designs and therefore that Adidas may prohibit the use of such signs in sports shoes.
Imitation of Products or Services by Third Party Constitutes Unfair Competition
07/09/2009 A recent Supreme Court judgment has confirmed earlier decisions in unfair competition proceedings initiated by Ariete SpA and Ariete Hispania SL against Comelec Import-Export SL. The court held that Comelec's importing and selling of juice makers which were slavish copies of the plaintiffs' products (which the plaintiffs first introduced into the Spanish market) constituted unfair competition.
Court rejects patent infringement action on manufacture of desmopressin
29/06/2009 The Third Commercial Court of Barcelona recently rejected an action by Ferring BV against Kern Pharma SL for alleged infringement of three patents related to the manufacture of desmopressin tablets. The court rejected Ferring's action due to the lack of inventive step and because EP 437 was not effective at the time the action was filed, absolving Kern and expressly ordering Ferring to pay the costs of the proceedings.
Preliminary Injunction Petition for Alleged Patent Infringement Rejected
22/06/2009 The Fourth Commercial Court of Barcelona recently rejected Sanofi-Aventis Societé Anonyme, Sanofi Aventis SA and Bristol-Myers Squibb SA's preliminary injunction petition against various pharmaceutical laboratories for the alleged infringement of European Patent EP454511, validated in Spain as ES2119764.
High Court Recognizes Distinctiveness of Freixenet Bottle
15/06/2009 The High Court recently ruled that Arvicaretey SA and Vid Vica SL, when marketing their cava in a white frosted glass bottle, infringed upon Freixenet's exclusive right to use its three-dimensional trademark, consisting of, among other elements, a white translucent frosted glass bottle.
Motion to Amend Penal Code on IP Rights
20/04/2009 A parliamentary group has passed a motion which seeks to decriminalize the small-scale unauthorized reproduction or distribution of works protected by copyright. The Madrid High Court has raised the possibility of a change of approach to the prosecution of crimes and the prosecutor for the Supreme Court has suggested punishing minor offences as misdemeanours, not as crimes.
France
French Approach to Interpretation of Patent Claims
05/05/2009 Under French law, an infringement can exist if an allegedly infringing product has all the essential features of the claim, even though there is no literal infringement. The courts have developed a liberal, pro-patentee doctrine of equivalents - a means whose structure does not literally reproduce the claims of the patent is equivalent if it has the same function as the patented means and achieves similar results.
Sweden
Supreme Court Sets Threshold for Copyright in Applied Art
07/09/2009 In a landmark decision, the Supreme Court has held that the design of the Mini Maglite torch is sufficiently original and individual to enjoy copyright protection. In its reasoning the court thoroughly set forth the legal position and the threshold of originality required for copyright protection for applied art.
IP Law Amendments Implement Enforcement Directive
18/05/2009 Sweden has now implemented the EU IP Rights Enforcement Directive. Some of the key changes relate to the right to information, publicity measures and corrective measures. Although the amendments have reinforced the penalties available within the IP field, there remain many unresolved issues to be determined by the courts.
Pirate Bay Crew Ordered to Walk the Plank
27/04/2009 The Stockholm District Court has rendered its judgment in the case against the operators of the Pirate Bay, considered to be the world's most visited file-sharing website. In a major victory for the entertainment industry, the defendants were each sentenced to one year's imprisonment and ordered to pay Skr30 million in damages to the rights holders concerned.
Appeal Court Rules on Reproduction of Album Cover Artwork
02/02/2009 The Court of Appeal has ruled against a photographer who opposed the use of his album cover artwork in a department store's advertising catalogue. The case highlights the importance of separating an artistic work itself from a product that incorporates that work when establishing the subject of reproduction.
USA
The Growing Global Impact of the US Patent Exhaustion Doctrine
26/10/2009 While the patent exhaustion doctrine can help patent owners control the further use of their products, there is disagreement over how far downstream it applies. Post-Quanta, uncertainty still lingers over whether foreign sales exhaust patent rights.
Federal Circuit to Consider Existence of Written Description Requirement
28/09/2009 The Federal Circuit has granted a petition to rehear the appeal in a case filed by Ariad Pharmaceuticals against Eli Lilly concerning the regulation of NF-kB to ameliorate the effects of certain diseases. It had previously reversed a judgment in favour of Ariad and its licensors and held Ariad's patent invalid for lack of written description.
Wilful Intent to Deceive Required for a Trademark Fraud Finding
21/09/2009 The Court of Appeals for the Federal Circuit has issued its much-anticipated decision in In Re Bose Corporation. The court held that a trademark was obtained fraudulently only if the applicant knowingly made a false representation with the intention of deceiving the US Patent and Trademark Office.
The Evolution of the Patent Reform Movement
06/07/2009 If passed, the Patent Reform Act of 2009 would convert the current patent scheme in the United States from a 'first to invent' system to a 'first to file' system. This would result in a shift from an inventor-centric system to one favouring an applicant. Among other advantages for applicants, the necessary paperwork for patent filings would be streamlined.
Recent Developments under Section 337 of the Tariff Act
29/06/2009 The US International Trade Commission (ITC) has become an increasingly popular venue for patent infringement litigation. Such actions are brought pursuant to Section 337 of the Tariff Act of 1930 and are available to owners of US patents provided that the 'domestic industry' requirement is met. Recent developments show that the ITC will continue to be an attractive and popular forum for IP disputes.
Recent Decisions on Written Description and Obviousness in Biotechnology Patents
11/05/2009 The Federal Circuit has released two important decisions concerning the patentability of biotechnology claims: one concerning written description and the other concerning obviousness. In the first, the court reversed a judgment in favour of Ariad Pharmaceuticals and its licensors, holding that the patent claims asserted against Eli Lilly for its drugs Evista and Xigris were invalid for lack of written description.
Argentina
Unfair Competition and Comparative Advertising Legal Regimes
15/06/2009 Many unfair competitive practices affect IP rights (eg, acts of imitation which lead to confusion by taking fraudulent advantage of a competitor's effort and reputation through the use of identical or similar distinctive signs). However, as such acts are governed by a number of different legislative statutes, the regulatory approach is unsystematic and contradictory.
Maintaining Data Exclusivity
14/04/2009 When the Confidentiality Law was enacted, it was assumed that it would bring Argentine local legislation into line with the requirements of Article 39(3) of the Agreement on Trade-Related Aspects of Intellectual Property Rights, which establishes the obligation to protect scientific data filed with the health authorities. However, the law fails to grant adequate legal protection to scientific data.
The Battle against Trademark Piracy
16/02/2009 Argentina is battling trademark piracy on two major fronts. The first is the marketing of counterfeit merchandise in fairs that do not comply with legal formalities and where it is difficult to bring legal actions. The second is the import of counterfeit products through the border.
Litigation
Bahamas
Public Policy and the Evidence (Proceedings in Other Jurisdictions) Act 2000
28/07/2009 Since the Evidence (Proceedings in Other Jurisdictions) Act was implemented, the Bahamian courts have often been found to use a narrower interpretation of the act in order to prevent foreign courts from delving into the private affairs of individuals and companies (specifically their bank accounts), unless there is a strong argument otherwise.
Application of Evidence (Proceedings in Other Jurisdictions) Act 2000
21/07/2009 In response to the Organization for Economic Cooperation and Development's blacklisting of the Bahamas as an offshore investment jurisdiction due to lack of transparency in the international arena and the existence of various obstacles to mutual legal assistance, the Bahamian legislature has implementated various acts including the Evidence (Proceedings in Other Jurisdictions) Act.
British Virgin Islands
Opening of New Specialized Commercial Court
07/07/2009 The British Virgin Islands has opened a new Commercial Court which will specialize in cross-border commercial and insolvency matters. In two ceremonies in early May 2009, the government formally opened the court and signed a memorandum of understanding with the Eastern Caribbean Supreme Court for its operation and administration.
Kazakhstan
Costs in Commercial Litigation: Beware of the Unexpected
07/04/2009 The rules on litigation costs in the Code of Civil Procedure are straightforward and generally work well, but when litigation deviates from the standard scenario, their narrow language may give rise to unexpected or contradictory results. Fortunately, the courts often choose to take a simplified and practical approach.
Netherlands
Share Lease Dispute Put to The Test (and to Rest?)
18/08/2009 Share lease products were popular in the Netherlands from the early 1990s until the beginning of the new millennium. In that period approximately 300 different products were offered by around 10 banks, ranging from relatively simple share investment products combined with credit agreements to complicated derivative products. The Supreme Court recently decided upon three so-called share lease cases.
Overview (May 2009)
19/05/2009 Including: Proceedings on Merits; Summary Proceedings; Enquiry Proceedings; Class Actions; Timeframes; Conservatory Attachments; Regulatory Litigation.
Liability of Financial Regulators
07/04/2009 In the Netherlands, a financial regulator can be held liable and legal proceedings can be brought against it, for instance, on the basis of a wrongful act. In practice, the judiciary exercises restraint with regard to the liability of regulators, as demonstrated by a recent judgment of the Amsterdam Court of Appeal.
Recent Rulings on Ponzi Scheme 'Claw-Backs'
31/03/2009 A Ponzi scheme run by a Mr Van den Berg collapsed in 2005, apparently defrauding some 1,400 investors of approximately €85 million. The funds had in large part been paid out to a group of investors who were close to Van den Berg. The insolvency trustee of the Van den Berg estate commenced claw-back actions against a number of these investors. Two Dutch courts recently issued conflicting decisions on the actions.
Norway
Ship Arrest Explained
28/07/2009 Ship arrest is an excellent way to obtain security for a claim and potentially prepare for a judicial sale of the vessel, should that become necessary. Arrest may be a suitable remedy for a variety of creditors, and is a relatively easy, inexpensive and quick solution.
Ukraine
Building a Jurisdictional Monopoly over Corporate Relations
28/04/2009 Ukraine is prioritizing corporate legislation in its plan to bring its statutes into line with EU law. However, not all recent changes and court practice can be considered outward looking or investor friendly. In particular, both the Highest Commercial Court and the Supreme Court have given negative assessments of the rights of parties to submit corporate arrangements to foreign law.
United Kingdom
Fraud and Deceit: Damages for Loss of Chance to Profit from Trading Strategy
16/06/2009 A recent decision casts new light on the measure of damages available in fraud cases. Among other things, it establishes that in cases of deceit, recovery of lost profits is not limited to specific alternative transactions which would have been entered into but for the fraud. The claimant recovered damages for the loss of the chance to profit from his trading strategy on the basis of a proven record of succesful trades.
Shall We Take This Outside? Russians Go to London to Litigate
02/06/2009 In Cherney v Deripaska the High Court ruled that it had jurisdiction to hear the case on the basis that the Russian courts are not sufficiently reliable. However, another decision proved that Russian litigants wishing to litigate their disputes outside Russia will not always be successful in arguing that their cases should be heard abroad, or at least in England.
Civil Litigation Costs Review: Interim Report Published
19/05/2009 An interim report has been published on Lord Justice Jackson's year-long review of the rules and principles governing the costs of civil litigation. Its author emphasizes that it is a preliminary report which is intended to provide a basis for discussion during the consultation period, but if some of the more radical ideas are implemented, they will have a dramatic impact.
High Court Strikes Out Representative Element of Claim against British Airways
05/05/2009 The High Court has confirmed the strict test which applies where a claimant seeks to bring proceedings on behalf of others with the same interest in the claim. However, claimant lawyers are increasingly willing to test the boundaries of existing procedures for multi-party litigation, with the aim of persuading the courts to develop something akin to the US-style class action.
Court of Appeal Clarifies Procedural Rules to Apply to Certain Part 8 Claims
28/04/2009 The Court of Appeal has clarified that judges have no power to give procedural directions which depart from or vary existing rules or practice directions, but may issue guidance on their application or interpretation. It further confirmed that judges may give procedural directions on issues which are not covered by existing rules or practice directions.
High Court Judgments on Penalty Clauses
14/04/2009 It is often difficult for contract drafters to know whether a term that provides for financial consequences of a certain event will be construed as a liquidated damages clause or a penalty clause. However, a number of recent judgments provide guidance on the High Court's approach to this issue.
Canada
Jurisdictional issues affecting claims against the federal government
27/10/2009 In a recent case the federal government motioned to dismiss an action on the principal ground that the Federal Court - not the Ontario court - has jurisdiction over claims against the crown for damages. However, the Ontario Court of Appeal found that the Ontario Superior Court has jurisdiction. The Supreme Court's decision is expected to have a profound impact on the rights of persons claiming damages against the crown.
Post-membership discipline - a price of admission
06/10/2009 Stephen Taub was registered as an approved person under the bylaws of the Investment Dealers' Association from June 1998 until September 2004. When the association began disciplinary proceedings against him in October 2005, alleging four counts of conduct unbecoming involving improper trading for clients and the improper use of confidential information, he challenged its jurisdiction to discipline former members.
Disqualifying Conflict Principles Apply to Expert Witnesses and Instructing Law Firms
01/09/2009 Citing a conflict of interest, the Ontario Court of Appeal has upheld a lower court decision disqualifying a law firm from continuing to act for plaintiffs against a defendant hospital in a medical malpractice case. The plaintiffs' counsel retained an expert who had once worked for the hospital and possessed confidential information of the hospital relevant to the matters at issue.
Court May Rectify Mistakes in Unilateral Pension Plan Instrument
09/06/2009 The Ontario Superior Court of Justice recently issued the first Canadian decision to apply the doctrine of rectification to correct an error in the language of a pension plan document. Although the court applied the standard of convincing proof in considering whether to grant rectification, it held that only the intention of the maker of the document was at issue.
Impatient Bank Penalized for Exercising Hypothecary Recourses
31/03/2009 The Superior Court of Quebec recently ordered a financial institution to pay its clients punitive damages, as well as compensation for moral and material damages to be paid jointly to both plaintiffs. The court concluded that the financial institution had committed numerous errors, including failing to inform its clients that their mortgages would not be renewed and unjustly instituting hypothecary recourses in an abusive and malicious manner.
Bank Condemned for Prematurely Releasing Funds from Foreign Bank Draft
24/03/2009 The Quebec Court of Appeal recently upheld a decision rendered in 2006 by the Quebec Superior Court which established that in the context of the case, the National Bank of Canada had been negligent in immediately releasing, without making the appropriate verifications, the entire amount of a foreign bank draft deposited by a client, without the individual's request to do so.
Isle of Man
High Court allows evidence by live video link in civil proceedings
13/10/2009 The High Court recently granted an application made in the context of civil proceedings for the admission of witness testimony and the conduct of cross-examination by a live video link. It is believed to be the first occasion in Manx civil proceedings on which evidence has been adduced and cross-examination has been conducted by this means.
New civil procedure rules introduced
06/10/2009 The new Rules of the High Court of Justice seem to promote a more hands-on case management approach. It is hoped that this will lead to justice being done more quickly than in the past, yet with equal thoroughness. Although it remains to be seen how court users, the judiciary and advocates will shape the rules, it is clear that the new rules represent an exciting step forward.
Strike-Out Possible Even Where No 'Unless' Order Has Been Made
26/05/2009 In a recent decision, following an application to strike out the plaintiff's claim, the High Court found that a deliberate failure to comply with a specific order of court, whether peremptory or otherwise, is capable of founding a successful application to dismiss an action. Therefore, it is in the defendant's best interests to be as focused as the plaintiff in respect of the plaintiff's obligation to proceed expeditiously with legal proceedings.
Non-recovery of Solicitors' Costs
17/02/2009 The Isle of Man has no civil procedure rules and Manx advocates have exclusive rights of audience before the courts. If a matter initially undertaken by a UK solicitor is subsequently transferred to an advocate (eg, if proceedings are required to be issued in the Isle of Man), settling the solicitors' costs frequently causes disputes, especially if advocates are instructed on the opposing side.
Germany
Damages for IP Infringements in the Distribution Chain – Whose Profits are Unfair?
27/10/2009 The calculation of damages for IP infringements based on unfair profits has long been disputed in cases where a rights holder seeks damages from a plurality of infringers in a distribution chain. The Federal Supreme Court recently published a landmark decision in this regard, ordering that the vendor's unfair profits be reduced by regress payments to its purchasers following the payment of damages to the rights holder.
Federal Supreme Court Rules in Orange Book Standard
26/05/2009 Although in recent years a consensus has been reached that reliance on the competition law defence is, in principle, permissible in patent infringement proceedings, the requirements for so doing are highly contentious. With its recent Orange Book Standard decision, the Federal Supreme Court went some way towards clarifying this situation.
Developments in Patent Infringement Proceedings
28/04/2009 The oral hearing before the Supreme Court in the Orange Book Standard proceedings took place in early February. The case is likely to give the court an opportunity to express its views on the conditions under which an alleged patent infringer may plead the competition law defence or the FRAND defence. The proceedings are of considerable significance for legal practice.
Federal Courts Issue Key Criminal Tax Law Rulings
24/03/2009 Two recent decisions of the highest federal courts will have a significant impact on criminal tax law in future. The Federal Criminal Court held that, in general, the only fair and just punishment for serious tax fraud is a prison sentence. The Federal Tax Court ruled that where there is the mere possibility that a criminal offence has been committed, the tax authority must inform the prosecutor.
Combating Product Piracy: Enforcement Directive Finally Implemented
10/03/2009 The Act on the Improvement of the Enforcement of Intellectual Property Rights recently passed into law. Germany has thereby finally implemented the EU Enforcement Directive (2004/48/EU) in national law. The new rules are welcome because they provide rights holders with powerful new weapons in the war against product piracy.
Collective Redress in Securities Litigation
06/01/2009 Three years ago Germany introduced a new type of proceeding that aims to facilitate litigation by individual investors concerning false, misleading or omitted public information regarding the capital markets under the Capital Investors' Model Proceeding Law. Although the law includes a sunset clause ending in November 2010, it is generally agreed that the law will remain in force after this date.
Russia
Tax appeals: can higher tax authorities' reviews leave taxpayers worse off?
27/10/2009 The Supreme Arbitrazh Court has ruled that a tax authority reviewing a taxpayer's appeal against a lower authority's position may not decide to recover additional tax payments from the taxpayer on the basis of the review; rather, it must audit the lower authority's decision according to due procedure. Thus, companies filing appeals against tax decisions can be sure that they will not be left in a worse position.
Supreme Arbitrazh Court Rules on Profit Tax Liability on Winding-Up
22/09/2009 The Supreme Arbitrazh Court has ruled that, for profit tax purposes, a shortfall in the assets of a joint stock company that is being wound up in order to be divided between shareholders does not prevent such shareholders from deducting the costs incurred in acquiring shares in the company that is being wound up.
Supreme Arbitrazh Court rules on banks' liability to tax authorities
08/09/2009 The Supreme Arbitrazh Court has confirmed the illegality of imposing tax liability on banks that fail to respond to the tax authorities' requests for bank account information and full account statements, unless such demands relate to customers that are subject to tax control measures.
Landmark Recognition and Enforcement of Foreign Court Decision
28/07/2009 The Moscow Regional Arbitrazh Court has issued a judgment recognizing and enforcing a Dutch district court decision on the basis of reciprocity and comity, despite the fact that Russia has no treaty on reciprocal legal assistance with the Netherlands. In so doing, it may have solved a problem that has hindered the development of good business relations between Russian and Western companies.
Supreme Arbitrazh Court Rules on Land Tax Liability
09/06/2009 Russian legislation is silent on certain issues relating to the payment of land tax, leaving lawyers and companies reliant on the decisions of the arbitrazh (ie, commercial) courts. Significant changes have been made to court practice in this area, reversing the basis on which courts will consider disputes on land tax payments.
Fund Management Company Must Compensate Client for Lost Investments
02/06/2009 A private pension fund has become the first plaintiff to be awarded compensation for investment losses incurred by its fund management company. The Moscow Arbitrazh Court ruling has had a momentous effect on the market - if all private pension funds were to demand the immediate payment of their funds and guaranteed minimum return, many management companies would be forced into bankruptcy.
Switzerland
Supreme Court Rules on Avoidance Actions
18/08/2009 Following a landmark Supreme Court decision in 2008 in connection with the insolvency of Swissair and its parent company SAirGroup, avoidance actions have become a broadly discussed issue in Swiss doctrine. Subsequently, a considerable number of decisions have been published relating to such actions. This update summarizes the effects of these new decisions and outlines the litigation aspects of avoidance actions.
Names of Official Institutions as Trademarks: POST and SWISS ARMY
17/02/2009 It is not unusual for government entities to commercialize products and provide specific services, or allow licensees to do so, while using the entities’ names as brands. In two recent cases the courts reached different conclusions regarding the trademarks used for such brands.
United Arab Emirates
Can Failure to Register Void an Off-Plan Sales Contract?
01/09/2009 The Law Regulating the Interim Real Estate Register in the Emirate of Dubai has had a major impact on the real estate market. However, doubts remain over the penalty imposed for breach of the developer's duty to record off-plan sales contracts concluded before the enforcement of the law. Lower courts and the Court of Appeals have reached sound but opposing conclusions on whether such contracts are void.
USA
Love Funding: Appeals Court Could Resolve Champerty Uncertainty
25/08/2009 A recent decision of the US Court of Appeals for the Second Circuit presented unanswered questions with respect to the application of champerty to an assignment of claims in connection with transfers of debt instruments. The New York Court of Appeals now has an opportunity to resolve uncertainty with respect to New York's champerty law.
Passing the Test: Enforceability of Standard CDS Contracts
20/01/2009 A district court has provided support for the enforceability of standard credit default swap terms under the International Swaps and Derivatives Association Master Agreement and related documents. It is important that courts enforce the plain terms of agreements and do not allow economically disappointed parties to seek relief by creating artificial litigation issues concerning the enforceability of those terms.
Guernsey
Application of Exclusive Jurisdiction Clauses
29/09/2009 The Guernsey Court of Appeal recently held that Guernsey law would follow UK common law on the correct procedure for deciding whether a term regarding jurisdiction has been incorporated into an agreement. In such cases a preliminary decision should be taken on the incorporation of a jurisdiction clause, in accordance with the principles of Guernsey law, but without finally deciding the issue.
Liechtenstein
Court process and foreign-related proceedings
20/10/2009 Liechtenstein's civil procedure mainly reflects the Austrian Law of Civil Proceedings. However, not all of the latter's provisions have been adopted and several modifications reflect traditional Liechtenstein principles. Particular conditions apply to cases involving a connection with a foreign jurisdiction and to the enforcement of foreign decisions.
Austria
Cross-Border Claims under New European Procedures
19/05/2009 Even though many of the legal systems across the European Union are harmonized, the enforcement of claims in different member states can remain a challenge. Thus, new EU procedures for payments and small claims have been implemented, which aim to remedy these problems. As a result, necessary adjustments have been made to the Austrian Code of Civil Procedure.
India
Termination of Contract and Survival of Arbitration Clause
20/10/2009 In a recent case the Supreme Court addressed the question of whether an arbitration agreement survives the termination of the main contract. In its judgment the court discussed the legal positions of different jurisdictions and concluded that an arbitration clause will survive once the contract containing the clause has come to an end or been terminated.
Court Holds That Arbitrator Cannot Award Damages Based on Own Experience
15/09/2009 The Delhi High Court has reiterated the established principle that an arbitrator is bound by the contract between the parties and cannot act in a whimsical manner when deciding claims. The court held that an award based on the arbitrator's experience cannot be upheld.
Supreme Court Rules on Incorporation of Arbitration Clause by Reference
08/09/2009 The Supreme Court has ruled on its interpretation of Section 7(5) of the Arbitration and Conciliation Act 1996 and the issue of whether an arbitration clause contained in a main contract can be incorporated by reference into a subcontract where the subcontract provides that it "shall be carried out on the terms and conditions as applicable to the main contract".
Appeal Court Upholds Decision on Jurisdiction to Grant Interim Relief
25/08/2009 The Division Bench of the Delhi High Court recently upheld the decision of the single bench of the high court regarding the jurisdiction of Indian courts to grant interim relief in international commercial arbitrations. This decision sets an important precedent as it clarifies the competence of Indian courts to exercise jurisdiction in international commercial arbitrations and restricts judicial intervention in the arbitral process.
Court Rules in Favour of Arbitration Act Despite Foreign Governing Law
11/08/2009 In a recent case the designate judge of the chief justice of India ruled that unless specifically excluded by the agreement between the parties or by implication, the provisions of Part I of the Arbitration and Conciliation Act 1996 will apply to international commercial arbitrations, even where the governing law is a foreign law.
Jurisdiction of Indian Courts to Grant Interim Relief
14/07/2009 The Delhi High Court recently issued a landmark decision on whether Indian courts have jurisdiction to entertain and grant interim relief in petition under Section 9 of the Arbitration and Conciliation Act 1996 in cases where the agreement between the parties provides that the law governing the contract, the court's jurisdiction and the place of arbitration are all outside India.
Ireland
Prorogation of Jurisdiction Under Brussels I
01/09/2009 A recent Supreme Court decision has highlighted the importance of the EU Brussels I Regulation in the context of commercial transactions. The case also demonstrates that parties must ensure that they understand the nature of the individual contractual relationships into which they enter, notwithstanding the fact that there may be other related agreements between some or all of the parties.
Disproportionate Jury Awards and Defamation Law
28/07/2009 The long-awaited Defamation Bill (introduced in 2006) has been signed into law by the president of Ireland. The Defamation Act 2009 will replace the existing Defamation Act 1961 and will allow a judge sitting with a jury in a libel action to give directions to that jury in relation to "the matter of damages". It is hoped that this legislation will finally provide guidance to Irish juries on the issue of awards for damages.
Wide-Ranging Changes Made to Civil Law
16/06/2009 Most of the provisions of the Civil Law (Miscellaneous Provisions) Act 2008 took effect on July 20 2008. However, Minister for Justice, Equality and Law Reform Dermot Ahern has now published a commencement order stipulating various dates on which additional provisions will take effect.
Return of No Goods No Longer Required for Issue of Bankruptcy Summons
28/04/2009 A High Court decision affirming a rule of practice which required a return of no goods to have been made before the court would issue a bankruptcy summons to a creditor has been successfully appealed to the Supreme Court, which also held that the High Court should retain the discretion to refuse to issue a bankruptcy summons even in cases where the provisions of statute and the Rules of Court had been complied with.
Supreme Court Allows Appeal on Examiner Appointment
03/03/2009 In the first case on examinership to come before it in over 10 years, the Supreme Court has allowed an appeal against a High Court order refusing the petition of Gallium Limited (trading as the First Equity Group) for the appointment of an examiner, and appointed Kieran Wallace of KPMG as examiner of the company.
Bad News for Lookalikes
24/02/2009 A recent High Court decision highlights the risk that the courts may restrain the sale of a lookalike product even where the lookalike features a highly distinctive trademark element or brand name of its own, where the product's appearance is similar and the method of consumer choice could lead to confusion. The decision may in future make it easier to obtain temporary injunctions against lookalike products.
Italy
Differing standards of proof in civil and criminal proceedings
06/10/2009 The Code of Criminal Procedure provides that where the same facts are considered in both criminal and civil proceedings, the civil court must assess facts and questions of liability autonomously and may not simply rely on a criminal court's findings. A Supreme Court decision has shed light on this principle and the differing standards of proof in civil and criminal cases.
New Law Amends Civil Procedure Code
07/07/2009 The new Law on Provisions for Economic Growth, Simplification, Competitiveness and Civil Procedure Issues has come into force. The law implements a wide reform of the Civil Procedure Code, the main aim of which is to introduce measures against the unreasonable length of civil proceedings.
Court Offers New Basis for Rejecting Punitive Damages
31/03/2009 The Italian courts routinely reject claims for recognition of foreign judgments that award punitive damages on the grounds that such awards are inconsistent with the principle of public order. However, in ruling on such a case, the Trento Court of Appeal did not cite Supreme Court precedent, but instead offered original and well-constructed reasons for its decision.
Japan
New Act Sets Out Terms of Jurisdictional Immunity for Foreign States
25/08/2009 The newly promulgated Act on the Civil Jurisdiction of Japan over Foreign States allows private parties and states better to predict whether they will be subject to the civil jurisdiction of the Japanese courts. In particular, private individuals seeking to engage in transactions with a foreign state will be better able to ascertain and avoid potential risks related to jurisdictional immunity.
Recent Trends in Administrative Litigation
09/06/2009 The Supreme Court has recently rendered a series of judgments relaxing the requirements for filing an administrative suit and appearing to require lower courts to exercise greater scrutiny of measures taken by administrative agencies. The decisions demonstrate the court's intentions to strengthen the judicial remedies provided by administrative litigation.
Civil Liability for False Statements in Securities Reports
27/01/2009 Under the Financial Instruments and Exchange Law, a company that files a securities report containing a material false statement is liable to past and present shareholders for damages caused thereby. A number of recent judgments shed light on issues of civil liability for false statements in securities reports, especially on the method by which shareholders plead and prove the amount of damages.
Kenya
Commercial litigation and financial audit: evidentiary aspects
27/10/2009 Every financial enterprise operating under the veil of incorporation must undergo audit. Under existing legislation, auditors have no express duties beyond those of professional persons. Since the result of a litigation claim of a technically commercial nature often depends on an auditor's evidence as an expert witness, that auditor's legal liability should reflect his or her ability to influence the outcome of a case.
Bank Guarantees Paid into Court Sufficient to Purge Contempt
28/07/2009 In a recent case involving a textile company and a shipping company, the High Court held that an earlier display of contempt by the textile company could be purged by the depositing of bank guarantees owed to a plaintiff. Although the plaintiffs argued that the payment into court did not amount to compensation, the court held that the contempt had been purged since the winning party would be able to call in the bank guarantees.
High Court Challenges Parliamentary Supremacy
24/02/2009 The High Court has issued a 14-day order restricting the state from taking executive or legislative action against the Electoral Commission. Although the order has been rendered largely academic – the Electoral Commission having been effectively disbanded – it calls into question the principle of parliamentary supremacy which holds that Parliament is supreme to all other government institutions (including the judiciary and the executive).
New Zealand
High Court's reminder: remedies for judicial review claims are discretionary
27/10/2009 The High Court has refused to grant declaratory relief to a judicial review claimant, although the claimant had successfully established grounds for review, had demonstrated prejudice and would normally have been entitled to a remedy. Some of the court's reasoning is disturbing and sits uneasily with the accepted view of the division of powers and the role of the courts in construing and interpreting legislation.
Supreme Court clarifies Commerce Commission's information-gathering powers
20/10/2009 The Supreme Court has recently clarified the circumstances in which New Zealand's competition regulator can exercise its information-gathering powers. It held that the Commerce Commission cannot issue an information-gathering Section 98 notice and have its power to do so judged retrospectively by reference to what it may discover from a 'fishing expedition' under that notice.
Email Chains: Discovery Obligations
01/09/2009 The High Court recently considered the discovery obligations of parties to litigation with regard to the correct treatment of emails forming part of an email chain. The decision addresses the question of whether an email chain is a separate document in itself or part of a single document.
High Court Allows Service of Proceedings on Facebook
19/05/2009 The High Court has ruled that substituted service could be made on a defendant overseas on the social networking website Facebook, as newspaper advertising could not be effectively targeted. This is the first time that the New Zealand courts have allowed the service of proceedings on Facebook, but it follows a decision by an Australian court allowing service of a default judgment on the website.
High Court Procedural Rules Revised
24/03/2009 New High Court procedural rules have come into effect. The significant amendments for international practitioners include changes to the rules on the service of persons outside New Zealand and the court's increased powers to grant interim measures in support of overseas judgments. More substantive changes in relation to case management, evidence and judicial review are expected soon.
High Court Applies Anti-spam Law
10/03/2009 In the first case of its kind, the High Court fined an individual NZ$100,000 for being an accessory to the sending of spam emails in breach of the Unsolicited Electronic Messages Act. However, the available penalties are unlikely to deter spammers if the commercial rewards are as great as this case indicates. Moreover, it remains to be seen whether the act may be given wider extraterritorial application.
Media & Entertainment
Germany
Munich Court Rules on Copyright Protection in Der Seewolf
15/10/2009 The Munich Higher Regional Court has delivered a ruling regarding the copyright protection of a title of a cinematographic work. Two film producers had produced a film based on Jack London's novel The Sea-Wolf and both wanted to use the German translation 'Der Seewolf' as their film's title. The court held that Section 23(2) of the Trademark Act applied and that both producers were free to use the title.
The Battle Over Equitable Remuneration
24/09/2009 The 2002 revision of the Copyright Act introduced the right for all authors and performing artists to claim 'equitable remuneration' from their licencees, and for authors to claim additional remuneration in cases in which the remuneration that they have received is obviously disproportionate. This update explores the battle over what constitutes 'equitable renumeration' and over what renumeration can be considered 'proportionate'.
Court Questions CELAS Online Music Exploitation Model
17/09/2009 A recent decision of a Munich court has brought into question the legality in Germany of EMI's Central European Licensing and Administration Services initiative for the online exploitation of its music repertoire. The decision will be welcomed by online service providers as it may help to put an end to the fragmentation of online rights and simplify the complex situation regarding the acquisition of licences.
Hamburg Court Rules on Liability of Usenet Access Providers
27/08/2009 In a recent decision the Higher Regional Court of Hamburg held that a company which provided access to illegal Usenet content was liable since not only did it know about the possibility of downloading illegal content through its website, it developed its business model around this possiblity. It is hoped that this decision will represent a first step towards bringing an end to illegal file-sharing.
The Fight against Online Copyright Piracy
23/07/2009 An individually tailored anti-piracy strategy, combined with decisive and specific action to help protect copyrighted works against internet piracy, would enable rights holders to recover damages against infringers despite Germany's existing legislative and judicial muddle. The legislature must resolve all inconsistencies and establish clear guidance for courts, access providers and rights holders alike.
Problems in Licensing of Music Video Clips for On-Demand Streaming
18/06/2009 The complex licensing situation in Germany has meant that that very few music clips streamed by German internet platforms are properly licensed. The recent failure of negotiations between GEMA and YouTube is just one example of this. It is doubtful that this situation can be resolved in the near future, since the difficulties are not confined to the fixing of an appropriate minimum charge for each stream.
France
Tacit Consent Used to Rule Out Breach of Privacy and Image Rights
08/10/2009 The European Court of Human Rights has challenged the French courts' position on assessing breach of privacy and image rights with regard to publication in celebrity magazines without the relevant person's consent. The victim's tacit consent was upheld as an exempting cause for press institutions' liability, even though the photographs reproduced were used with no connection to the purpose authorized by the victim.
'Workers' of Temptation Island
01/10/2009 The Court of Cassation has upheld a decision of the Paris Court of Appeal which reclassified the regulations applicable to participants in the French version of the television series Temptation Island as permanent employment contracts. The scope of this ruling requires reality television programme producers to adapt contractual arrangements applicable to participants, taking employment law into account.
The New Cinema Code Has Arrived
24/09/2009 The new Code of Cinema and Animated Images has been published, clarifying and simplifying the law relating to cinema. The new code formalizes the dual role of the National Cinema Centre, which implements state policy regarding cinema and audiovisual creations and performs central administrative duties.
Newspaper Companies and Journalists: Adapting to Online Media
03/09/2009 The Act on Promotion of the Distribution and Protection of Creative Works on the Internet has generated debate about the so-called 'three-strikes' system (or 'graduated response'). However, the innovations of the act also affect other areas, particularly the rules on journalistic copyright and the status of online press services. This update looks at how press companies are directly affected by two sets of provisions in the law.
Industry Organizations Reach Agreement on Media Distribution Windows
06/08/2009 Contrary to predictions, French cinema organizations, television channels and video-on-demand producers have reached a comprehensive agreement on media distribution windows. Audiovisual media services operators in other EU states will be affected, as producers and distributors of French films must insert the corresponding clauses into their contracts.
Phonographic Producers and Musicians' Unions Agree on Rights and Remuneration
18/06/2009 Balancing the requirements of the Intellectual Property Code and the Labour Code, a new ministerial order defines the conditions for implementing a fixed-term contract and the terms and conditions for setting the minimum remuneration due to a musician for the performance, the recording and the exploitation of performances included on a phonographic or a videographic recording.
Australia
First Civil Penalties Case under Broadcasting Services Act
10/09/2009 The Federal Court recently ruled in the first civil penalties case under the Broadcasting Services Act 1992 (Cth). 2UE Sydney Pty Ltd, broadcaster of the John Laws Morning Show, was ordered to pay a pecuniary penalty of A$360,000, calculated as penalties of varying amounts in respect of 13 breaches of the Broadcasting Services (Commercial Radio Current Affairs Disclosure) Standard 2000.
IceTV Wins High Court Copyright Case against Nine Network
25/06/2009 A recent decision of the High Court of Australia in IceTV Pty Ltd v Nine Network Australia Pty Ltd has limited the protection of copyright in compilations and databases in Australia. This decision will have a significant impact on businesses that publish information of a generic nature. Other businesses may now be able to use such information without licence and without fear of copyright infringement.
High Court Limits Scope of Publisher's Defence in Trade Practices Act
18/06/2009 In the early 1980s actions were brought against newspaper publishers and television broadcasters under Section 52 of the Trade Practices Act alleging misleading or deceptive news stories. This led to new Section 65A, which provided a statutory exemption for "prescribed information providers". A recent High Court decision appears to narrow significantly the scope and availability of the publisher's defence.
Government Proposes Sweeping FOI Reforms
30/04/2009 Freedom of information (FOI) laws provide an important means of access to government information for journalists, film makers and the public. The government has announced major changes to FOI legislation and procedures which it says will "promote a new system and culture of pro-disclosure for government information".
Official International Co-productions: What, Why and How?
05/03/2009 'Complex' is the word used by many producers to describe official international co-productions. However, with the ability to gain access to finance and incentives in Australia (including the producer offset) and other countries, official international co-productions are becoming more attractive in this difficult time of obtaining finance, and tackling the associated complexities has become even more worthwhile.
Film Studios Take Action over Illegal Downloads
12/02/2009 A number of Australian film and television distributors have taken legal action against the internet service provider (ISP) iiNet, the third-largest ISP in Australia after Telstra and Optus. The distributors are suing iiNet for its failure to stop customers illegally downloading a number of their film and television programmes over the iiNet network.
Italy
Consultation on Allocation of Digital Dividend
03/09/2009 The Communications Authority launched a public consultation on a draft regulation setting forth the criteria for allocating five digital terrestrial multiplexes - the digital dividend from the analogue switchover. The digital dividend will be allocated through a beauty contest, rather than by competitive bidding, and the process will be open to foreign operators.
Television Advertising: Communications Authority Makes Itself Heard
23/04/2009 The Television Code prohibits broadcasters from broadcasting advertisements at a higher volume than other programming, but research has shown that this restriction is often ignored. The Communications Authority has set out technical standards for measuring the volume of television advertising and has established an advisory panel to focus on advertisements on new media platforms.
Senate and Communications Authority Look to Europe
16/04/2009 Media stakeholders have turned their attention to Parliament's lower house following the Senate's approval of a bill to transpose the provisions of the EU Audiovisual Media Services Directive. The Communications Authority has revised the quota system that requires television broadcasters to include a certain percentage of European works in their programming schedule.
Pornography Tax: Unintended Consequences for Televisual Content?
09/04/2009 The government has taken steps to enforce a tax on proceeds of the production, distribution and sale of pornographic material. It has codified a definition of 'pornographic works' which, although formally applying only to fiscal matters, might in future be referred to by the Communications Authority and the courts in applying rules on televisual content and the protection of minors.
United Kingdom
Downturn Dangers for Distributors: Effects of Insolvency Events on a Grant of Rights
26/02/2009 Many standard agreements between London-based agencies and third-party distributors are governed by UK law. This has been seen as a price worth paying for access to forms of independent product which might challenge the US majors, but distributors and their equity or banking financiers often fail to consider the effect of insolvency on a grant of rights to such entities by an originating producer.
Netherlands
Nine Months' Imprisonment for Illegal Delivery of Music to Cafés and Tax Fraud
04/06/2009 The Appeal Court of Arnhem recently sentenced an individual to 12 months' imprisonment, nine months of which were to be unconditional, for tax fraud and the illegal delivery of background music to cafés and restaurants. The judgment is interesting because in the Netherlands the enforcement of IP rights is primarily the responsibility of the rights holders themselves.
Ruling on Downloading from Illegal Sources Leads to Uncertainty
19/03/2009 By tolerating illegal downloads, the Netherlands was the odd one out in Europe. It seemed that the District Court of The Hague's June 2008 ruling in ACI Adam BV cs v Stichting De Thuiskopie cs would bring about change. In contrast to the official view of the minister of justice, the court clearly stated that it qualified downloading from illegal online sources for private use as illegal.
Taiwan
Content Control for Telecommunications Platforms
09/07/2009 The National Communications Commission has decided to amend the Regulations Governing the Third Generation (3G) Mobile Telecommunications Services, adding a requirement for those who supply channel programming over 3G networks to obtain approval or licences pursuant to the same regulatory requirements as other broadcasting services.
European Union
Music Copyright Protection Extended
25/06/2009 The European Parliament has voted to extend the copyright protection term for sound recordings from 50 years to 70 years. The extension would take into account the fact that performers are increasingly outliving the existing 50-year period of protection for their recordings, and would ensure that they can rely on their rights to prevent the occurrence of objectionable uses of their performances during their lifetime.
Norway
Norway Joins European Convention on Cinematographic Co-production
24/09/2009 Minister of Cultural Affairs Trond Giske has announced that Norway has acceded to the 1992 European Convention on Cinematographic Co-production. Norwegian producers now have access to other member countries' support systems and the convention will open up a much larger labour market for Norwegian film workers at all levels.
Belgium
Constitutional Court Strikes Down Right to Copy Sheet Music in Full
22/10/2009 A Constitutional Court decision spells an end to copying sheet music in full for teaching purposes. The court found that the exploitation of sheet music is more analogous to that of books than that of visual artworks. It also acknowledged the importance of economic criteria in assessing whether a difference in treatment is justified and whether a copyright exception is legal.
Now Showing: The Battle of the Television Formats
16/07/2009 Under the general principle of copyright protection, a television format can be copyright protected if the idea is properly expressed in a way which reflects the author's personality and his or her intellectual effort. A distinction should be made between the format itself, which is the blueprint on which the television series is based, and the actual television programmes.
A Frontier Dispute? Supreme Administrative Court Weighs Broadcast Licence Issues
12/03/2009 Ruling in a dispute over licensing for programming and editorial activities, the Supreme Administrative Court has annulled a decision issued by the regulator of French-language broadcasters in Belgium against a Belgian subsidiary of a Luxembourg-based parent company. The case raises questions about the scope of validity of national licences, the 'country of origin' rule and the principle of free circulation of services.
Brussels Court Suppresses Satirical Photomontage
05/02/2009 A Brussels court recently ordered the publisher of a news and television magazine to remove from circulation an issue that depicted the national chief of police and his secretary in a sexual context. Among other things, the court considered issues of reputational damage and the nature of public figures; however, most press criticism of the ruling has focused on the use of ex parte orders in such cases.
Finland
Final Report on the Reform of the Lotteries Act Issued
04/06/2009 The working group on the reform of the Lotteries Act set up by the Ministry of the Interior has issued its final report. Among other things, the report proposes that the current formal licence system should be changed to an exclusive system and that a new authority, the Central Bureau of the Finnish Police, be established. The new Lotteries Act is intended to enter into force on January 1 2012.
News Agency Files Complaint against Broadcasting Company
16/04/2009 The Finnish News Agency has filed a complaint to the European Commission requesting that the commission examine whether the Finnish Broadcasting Company is infringing state aid regulations by displaying its own free-of-charge news service alongside paid advertisements on billboards in shopping centres in the Helsinki Metropolitan Area.
ECJ Rules on Relationship between Privacy and Freedom of the Press
26/02/2009 The European Court of Justice has rendered a preliminary ruling on the protection of personal tax data and the freedom of the press. It held that if personal data is contained in documents in the public domain and is processed with the sole object of disclosing information, opinions or ideas to the public, such processing is to be considered "solely for journalistic purposes".
Controversial Girl Scout Advertisement Approved by Council of Ethical Advertising
19/02/2009 The Council of Ethical Advertising recently issued a statement allowing the Finnish mobile phone and internet service provider DNA to use an advertisement featuring an older man - dressed as a boy scout - in the company of women dressed as girl scouts. The council had been asked to rule on the advertisement in response to claims that it included references to paedophilia.
Ice-Fishing Competition a Lottery, Rules Supreme Court
12/02/2009 In a recent decision, the Supreme Court ruled that an ice-fishing competition was to be considered a lottery in accordance with the Lotteries Act. The main issue at stake was whether the winning of a prize in the competition was completely or partially based on chance, as Section 2 of the act requires from a lottery.
Ireland
Advisory Group Recommends Significant Changes to Law on Media Mergers
10/09/2009 The Department for Enterprise, Trade and Employment recently published the report of the Advisory Group on Media Mergers. The department has indicated that legislation to reform aspects of competition law is to be enacted in 2009, but the extent to which the Advisory Group's recommendations are to be followed remains to be seen.
Enhancements to Film Tax Incentives Take Effect
30/04/2009 The minister for finance has signed a commencement order introducing changes to Section 481 of the Finance Act 2008 regarding relief for investment in film projects. This follows the European Commission's state aid approval of the amendments during the preceding week. The effect of the change is to increase the maximum amount of Section 481 funding that a project can avail of from €35 million to €50 million.
Delays in Prosecution Not Necessarily a Hindrance for Libel Plaintiffs
05/02/2009 In a recent case the Supreme Court has demonstrated that it is prepared to allow libel actions to proceed notwithstanding considerable delays in their prosecution. However, this appears to depend upon a number of factors, most notably on how the defendant has pleaded in the proceedings.
Sweden
Rights Holders Win First IPRED Case
08/10/2009 On the day that the Swedish law on the EU Intellectual Property Rights Enforcement Directive entered into force, five publishers applied to receive information from ePhone - an internet service provider - regarding the identity of an individual behind an internet protocol address that they suspected was being used to distribute audiobooks illegally. A district court has found in the publishers' favour.
Court Orders Black Internet to Cut Internet Access to Pirate Bay
01/10/2009 The Stockholm District Court has rendered its verdict in the Pirate Bay Case. The court upheld the charges against the four defendants and Pirate Bay's internet service provider, Black Internet AB, and issued an injunction against the defendants that prohibits them from providing services which make copyright works available to the public.
Judge bias appeal dismissed in Pirate Bay
24/09/2009 In The Pirate Bay the defendants claimed that the judge responsible for the case in the district court was biased due to his roles in the Association for Copyright and Association for the Protection of Industrial Property. The Court of Appeal dismissed the case, finding that none of the circumstances put forward by the defendants, taken separately or together, implied that there were legitimate reasons to question the judge's impartiality.
Pirate Bay: District Court Judgment Appealed
11/06/2009 The Stockholm District Court has rendered its verdict in The Pirate Bay Case. Four men behind the file-sharing website The Pirate Bay were found guilty of contributory copyright infringement and sentenced to one year's imprisonment. In addition, they were jointly ordered to pay Skr30 million in damages to the plaintiffs in the music and film industries.
Switzerland
Government Considers EU Audiovisual Media Services Directive
26/02/2009 The government is considering whether to commit to adopting the EU Audiovisual Media Services Directive (formerly the Television Without Frontiers Directive). This update provides an overview of the regulatory framework for radio and television broadcasters in Switzerland and discusses the possible consequences of Switzerland adopting the terms of the directive.
Offshore Services
Bahamas
Government Introduces New External Insurance Act
24/09/2009 In light of the increasingly restrictive regulation in many onshore jurisdictions and the escalating costs of conducting insurance business in both onshore and in some offshore insurance centres, the Bahamas has introduced the External Insurance Act 2009, incorporating several innovative features which are unique to the jurisdiction.
Public Policy and the Evidence (Proceedings in Other Jurisdictions) Act 2000
23/07/2009 Since the Evidence (Proceedings in Other Jurisdictions) Act was implemented, the Bahamian courts have often been found to use a narrower interpretation of the act in order to prevent foreign courts from delving into the private affairs of individuals and companies (specifically their bank accounts), unless there is a strong argument otherwise.
Application of Evidence (Proceedings in Other Jurisdictions) Act 2000
16/07/2009 In response to the Organization for Economic Cooperation and Development's blacklisting of the Bahamas as an offshore investment jurisdiction due to a lack of transparency in the international arena and the existence of various obstacles to mutual legal assistance, the Bahamian legislature has implemented various acts, including the Evidence (Proceedings in other Jurisdictions) Act.
A Guide to Foundations
07/05/2009 Foundations are now recognized and accepted in most civil law jurisdictions. They are widely used in Europe and Latin America where trusts are less well known, frequently misunderstood and not always accepted. With the introduction of the Foundations Act in 2004, The Bahamas became one of the first common law countries to make the private foundation available.
Belize
Legislative Amendments to Belize Trusts Act
29/01/2009 Since the Belize Trusts Act was passed in 1992, Belize trusts have been a popular choice for international financial planning. Recent legislative amendments have sought to improve the jurisdiction’s existing protective framework and fresh case law has confirmed the strength of the Belize trust as an asset protection device.
USA
IRS Extends Deadline for Special Voluntary Disclosure Programme
01/10/2009 The Internal Revenue Service has announced an extension of the deadline for its special voluntary disclosure programme. Taxpayers who do not voluntarily disclose unreported accounts by the new deadline may face harsher civil penalties and possible criminal prosecution.
Recent IRS Notices and Actions Regarding FBAR and Other Reporting
13/08/2009 Increasingly, professionals advising international families whose members include US citizens and residents can bring added value to their services if they can highlight US tax reporting requirements and timely compliance procedures. The Internal Revenue Service is making offshore tax matters a top priority, so compliance is crucial to avoid hefty penalties.
IRS Increases Focus on Offshore Tax Matters
04/06/2009 The Internal Revenue Service (IRS) is making offshore tax matters a top priority, targeting non-US bank and other financial accounts along with offshore structures. Furthermore, the federal government is considering legislation to prevent US taxpayers from holding assets in accounts of financial institutions located in so-called tax havens without disclosing the existence of those accounts to the IRS.
Tax Year 2009: The More Things Change, the More They Stay the Same
19/03/2009 The new year has brought talk of stimulus packages and the Internal Revenue Service has stepped up its investigation of foreign bank accounts. Not only it is important to know the relevant transfer tax exclusion and exemption amounts, but it is also time to be aware of ever-increasing filing requirements and upcoming deadlines to report 2008 transfers.
Bermuda
New Act Removes Perpetuities Limitation
15/10/2009 The government recently passed the Perpetuities and Accumulations Act 2009. The act is designed to modernize Bermuda's laws on the application of the rule against perpetuities to wills and trusts. This will enable Bermuda to remain a prime location for international trust business.
New laws combat money laundering and terrorist financing
24/09/2009 Bermuda has had longstanding obligations to have effective procedures in place on anti-money laundering and anti-terrorist financing to detect and prevent such activity. Money laundering was included in the Proceeds of Crime Act 1997 and obligations to combat terrorist financing were set out in the Anti-terrorism (Financial and Other Measures) Act 2004.
Freehold First and Second Mortgages Explained
27/08/2009 A first mortgage transfers the legal estate to the secured lender. The borrower has the right to occupy the home and to have it transferred back when the mortgage loan is repaid with interest. Second and subsequent mortgages transfer a home subject to the first mortgage. The first lender will already hold the legal estate in a borrower's home. Thus, second and subsequent secured lenders are entitled only to the equity of redemption.
Telecommunications: Why Can't I Have Just One Bill?
21/05/2009 Frustrated consumers often blame service providers for their inability to offer bundled telephone, cable television and internet services, but it is actually the legislative framework that keeps the services separate. The minister has stated that imminent reform will benefit consumers by providing them with more service options, competitive pricing and licensees offering the latest telecommunications technology available.
Condominium Owners: It Pays to Be Neighbourly
07/05/2009 Homes in Bermuda are generally owned either by way of freehold ownership or condominium ownership. This update looks at long leasehold condominiums, where the condominium owner is the tenant and the condominium association is the landlord. The condominium long lease governs the relationship between owners and condominium associations.
Landlords and Tenants: Beware End-of-Lease Repairs
30/04/2009 There is often a misconception that after paying rent and utilities, there is little else for a tenant to pay. However, at the end of a residential or commercial tenancy a tenant will often be required to leave the rented premises in a certain standard of repair – and if the premises are not left at that standard, the landlord may have a claim for dilapidations.
British Virgin Islands
Metavante and ISDA Master Agreement: BVI Perspective
22/10/2009 The judge responsible for the Lehman bankruptcy proceedings recently held that Metavante Corporation could not rely on Section 2(a)(iii) of the International Swaps and Derivatives Association Master Agreement to suspend payments. Historically, a BVI court would uphold the contractual provisions of Sections 2(a)(iii) and 6(a) on the occurrence of a Section 5(a)(vii) bankruptcy event in respect of a BVI counterparty.
Registering Security Interests Created by BVI Companies
15/10/2009 Where a BVI company creates a security interest over its own assets, two different registrations must be considered under the Business Companies Act: a public registration and a private registration. Only the private registration is mandatory; however, the public registration has the principal effect in determining the security's priority under BVI law.
Taking Security over Shares in a BVI Company
15/10/2009 BVI law permits security to be taken over shares in BVI companies - this is a relatively common feature of secured financing involving companies. This update looks at the relevant filing requirements and restrictions, governance of security documents, enforcement of security interests, verification of free and marketable title to shares and the creation of an equitable mortgage over shares.
BVI Placed on OECD White List
24/09/2009 The Organization for Economic Cooperation and Development (OECD) has moved the British Virgin Islands to its white list of jurisdictions that have substantially implemented the internationally agreed tax standard. The British Virgin Islands committed to the OECD's internationally agreed tax standard in 2002 and steadily concluded agreements in the following years.
New Financing and Money Services Act
17/09/2009 The Financing and Money Services Act, which provides for the licensing and regulation of financing and money service businesses, recently became law. The date of the bill's entry into force is yet to be announced. The types of business covered are financing businesses on the one hand, and money services businesses on the other.
Statutory Demands and BVI Insolvency Act
20/08/2009 In a recent case the High Court took the view that because of a particular definition in the Insolvency Act, a company which had not applied to set aside a statutory demand within 14 days of service was precluded from making submissions about the validity of the demand at a subsequent application to appoint a liquidator. This had the practical effect of limiting the defences available to a company at the trial stage.
Cayman Islands
Cayman Islands Elevated to OECD White List
08/10/2009 The Cayman Islands has signed a Tax Information Exchange Agreement with New Zealand, bringing to 12 the number of such agreements that it has concluded. Consequently, the Cayman Islands has been upgraded to the White List compiled by the Organization for Economic Cooperation and Development and is now in position to take advantage of its newly elevated status as a fully compliant offshore financial centre.
Strata Litigation: Avoiding Personal Liability
24/09/2009 More than 500 strata operate in the Cayman Islands, the administration of which is often fraught with conflict and confusion. In the event of an error that results in loss to the strata or a unit owner, both the strata and its committee members may personally be exposed to liability. However, a combination of foresight, legal advice, well-drafted bylaws and insurance can greatly reduce the risk of liability and litigation.
Changes to the Exempted Limited Partnership Law
04/06/2009 The Exempted Limited Partnership Law (2007 Revision) has been amended by the Exempted Limited Partnership (Amendment) Law 2009. Many of the changes clarify the existing law and place greater reliance on the expressed provisions set forth in the partnership agreement. The amendments took effect on May 11 2009.
Cayman and Brazilian Regulators Sign Information-Sharing Agreement
14/05/2009 The Cayman Islands Monetary Authority continues to strengthen proactively its commitment to cooperating and sharing information with overseas regulatory and supervisory entities of the financial industry. The latest agreement is with the Brazilian Securities and Exchange Commission.
Duties and Responsibilities of Corporate Hedge Fund Directors
12/02/2009 The Cayman Islands is the leading offshore jurisdiction for the establishment of hedge funds. In recent years, onshore tax and regulatory considerations have driven the demand for the provision of independent director services for these funds. Particularly in these turbulent times, all directors must ensure that they know and understand their duties and responsibilities.
Insolvency Legislation Overhauled
05/02/2009 Three new sets of rules and an amendment to the Grand Court Rules were published in a special issue of the Cayman Islands Gazette, establishing a new insolvency regime. Amendments to the Companies Law that were enacted in 2007 but not brought into force pending the preparation of the rules will now enter into effect at the same time as the new rules on March 1 2009.
Guernsey
Application of Exclusive Jurisdiction Clauses
01/10/2009 The Guernsey Court of Appeal recently held that Guernsey law would follow UK common law on the correct procedure for deciding whether a term regarding jurisdiction has been incorporated into an agreement. In such cases a preliminary decision should be taken on the incorporation of a jurisdiction clause, in accordance with the principles of Guernsey law, but without finally deciding the issue.
Guernsey Companies in Cashbox Transactions
10/09/2009 Current market conditions have severely restricted the ability of many UK companies to obtain debt finance to fund their activities. Cashbox structures are increasingly being used as an efficient way of raising equity funding without the requirement for compliance with the statutory pre-emption regulations. The use of Guernsey companies as cash boxes affords many tax and non-tax related benefits.
Overview (September 2009)
03/09/2009 Including: Location; Language; Currency and Exchange Controls; Government and Relationship with the United Kingdom and the European Union; Legislation; Legal System; Legal Professionals; Judiciary; Company Laws; Taxation; Regulation of the Financial Services Industry; Banking; Insurance; Collective Investment Schemes/Mutual Funds; General Securities and Derivatives; Trusts, Fiduciary Services and Pensions.
Guernsey to Introduce Limited Liability Partnerships
25/06/2009 A proposal to introduce limited liability partnerships (LLPs) into Guernsey law has been approved by the government. Guernsey's LLP regime will bear some similarities to that of the United Kingdom. Although their use will not be limited in scope, it is expected that the LLPs will mostly appeal to practitioners in professional firms who currently work within a general partnership.
Guernsey to Adopt City Code on Takeovers and Mergers
18/06/2009 The Companies (Panel on Takeovers and Mergers) Ordinance 2009 will come into force shortly, formalizing an agreement under which the UK-based panel regulates Guernsey takeovers and mergers by administering the City Code on Takeovers and Mergers.
Investor Protection Regulations Amended
11/06/2009 Changing market conditions are having an effect on the risk appetite of investors in selecting investments. Increasingly, investors are mindful of the level of regulation in place in the jurisdictions in which investment vehicles are established. In response, Guernsey has finalized a number of measures that have been in the pipeline and has enacted three new laws.
Malta
Trusts: Providing Peace of Mind
30/07/2009 Parents often create trusts for the benefit of a child as beneficiary of the trust. In such cases an independent trustee has exclusive authority to decide on the manner in which the trust funds are managed and made use of for the beneficiary's benefit. This may provide peace of mind for parents who are reluctant to leave a lump sum to a reckless or spendthrift child, or who want to provide for their mentally or physically disabled child.
The Maltese Foundation: A Vehicle for Corporate Social Responsibility
16/07/2009 The social, political and economic changes seen worldwide have led to new questions and raised expectations regarding corporate social responsibility. Companies' corporate social responsibility may take various forms and may be carried out through various institutes. The Maltese foundation, when set up as a voluntary organization, provides an ideal vehicle for corporate social responsibility.
Does Settling Property in Trust Mean Full Relinquishment of Control by the Settlor?
28/05/2009 The essence of a trust is that upon its creation the person setting up the trust transfers ownership of the trust property to the trustees. The settlor creates and sets up the trust and decides the form which the trust property may take. However, once the trust is created, unless the settlor has reserved a personal interest, he or she loses all control of or interest in the trust property.
The Role of the Trust Protector
02/04/2009 A trust protector may play one or more of several roles, including policing the trusteeship or enforcing the trusts as if it were a sole beneficiary. The protector can serve a critical function outside the trust while acting in conjunction with the trustee to enhance the carrying out of the settlor's wishes. However, the role is not without responsibility to interested parties if the protector breaches its duty.
Norway
Norway Signs Treaties with Tax Havens
08/10/2009 The change of US government, the global economic slowdown and the Liechtenstein scandal have affected countries globally and highlighted the need to increase transparency and strengthen international cooperation on tax matters. During the past couple of years Norway has signed several exchange of information agreements and some double taxation agreements with tax havens.
Liechtenstein
Court Process and Foreign-Related Proceedings
15/10/2009 Liechtenstein's civil procedure mainly reflects the Austrian Law on Civil Proceedings. However, not all of the latter's provisions have been adopted and several modifications reflect traditional Liechtenstein principles. Particular conditions apply to cases involving a connection with a foreign jurisdiction and to the enforcement of foreign decisions.
Government Proposes New Legal Framework on Gambling
03/09/2009 The government intends to create an attractive legal framework for gambling in Liechtenstein. As there has previously been no gambling law in existence, the government hopes to establish Liechtenstein as an attractive place to set up gambling businesses. All adverse elements of the gambling industry shall be limited as far as possible. Money laundering will be a top priority when supervising gambling operators.
Liechtenstein-UK TIEA Encourages UK Taxpayers to Come Clean over Taxes
20/08/2009 Liechtenstein is pursuing the implementation of global standards of cooperation in tax matters, as promised in the Liechtenstein Declaration of March 2009. The tax information exchange agreement (TIEA) with the United States has been adopted unanimously by Parliament. In July 2009 a TIEA was concluded with Germany. The last phase of this development was the conclusion of a TIEA with the United Kingdom.
Proposed New Provisions for Security Deposits in Litigation Cases
18/06/2009 The Constitutional Court repealed Section 57 of the Civil Procedure Order in June 2008. Due to the subsequent lack of provisions for security deposits in civil cases it became impossible for a defendant to claim security for litigation costs from a foreign plaintiff. The government has issued a bill of law, the aim of which is to repair Section 57, which was repealed mainly due to its inconsistency with EU law.
Government Proposes New Tax Approach
09/04/2009 The government has issued a statement announcing its commitment to the implementation of global standards of transparency. Among other things, it has indicated that it is prepared to enhance its cooperation in international tax matters by proposing the conclusion of lateral agreements on the exchange of information for tax purposes or by means of double taxation agreements.
Government Proposes New Tax Law
12/03/2009 Liechtenstein's tax law dates from 1961 and originates from Swiss tax law. Since 1961 there has been little modification and attempted legislative reforms have failed. However, several years ago Liechtenstein's government recognized the need to adjust tax law in line with changes in the economic and legal environment, both in Liechtenstein and abroad.
Mauritius
Private Equity Fund Formation and Transactions
16/07/2009 The Securities Act 2005 enables collective investment schemes, such as leveraged buy-outs, to be constituted as companies, trusts (including unit trusts) or any other legal entities prescribed or approved by the Financial Services Commission that meet certain criteria. This update looks at the formation and terms of operation of such schemes, as well as private equity fund formation in general.
Netherlands Antilles
Advantages of Private Foundations
25/06/2009 This update discusses several tax and legal issues in connection with the setting-up of a stichting particulier fonds, a private foundation incorporated under the laws of the Netherlands Antilles. It offers almost unlimited flexibility in terms of structure, provisions and stipulations regarding asset management and profit distribution, making it an ideal instrument for asset protection and estate planning.
Turks & Caicos Islands
UK Government Partially Suspends Turks and Caicos Islands Constitution
08/10/2009 The Constitution of the Turks and Caicos Islands, a British overseas territory, has been partially suspended. Provisions have been put in place for the interim governance of the islands by Governor Gordon Wetherell until such time as a new government can be freely and fairly elected. The governer aims to establish a durable path towards good governance, sound financial management and responsibility.
Building on the Spoken Word: A Guide to Oral Construction Contracts
14/05/2009 In the Turks and Caicos Islands, parties often begin building commercial or residential properties or engage in engineering works without taking any legal advice on the appropriate form of building contract and without signing a formal building contract. This update provides advice to parties regarding their rights when engaging in building or engineering work in the absence of a formal written contract.
Aruba
Parliament Approves New Form of Limited Liability Company
02/04/2009 In September 2006 the Aruban government presented its plan for a form of Aruban limited liability company, known as a vennootschap met beperkte aansprakelijkheid. Parliament has now finally approved legislation on the new corporate entity. Simple and flexible, it promises to be particularly useful for tax planning.
Ordinance Introduces 'Know Your Customer' Principle for Trust Companies
26/03/2009 A new ordinance on the supervision of trust companies has entered into force following the redrafting of provisions that would have brought almost every company in Aruba under the supervision of the Central Bank. The ordinance introduces the 'know your customer' principle to prevent Aruban entities from being abused for criminal purposes.
Cyprus
Establishing International Trusts
17/09/2009 The Cypriot trust regime was enhanced by the enactment of the International Trusts Law, which governs the creation and management of international trusts. Cyprus is considered among the most popular jurisdictions for the establishment and management of an international trust in order to protect and manage assets in a tax efficient manner.
Canada
Central Management and Control Determines Trust Residence
08/10/2009 In a recent case the Tax Court of Canada considered whether two Barbados trusts were entitled to claim the benefit of the capital gains exemption in Article XIV(4) of the Canada-Barbados Income Tax Convention on their dispositions to an arm's-length purchaser of shares of two Canadian holding corporations which indirectly owned a Canadian automotive parts manufacturing and assembly business.
Lipson's ‘Spousal Twist’ Subject to GAAR
22/01/2009 A majority of the Supreme Court of Canada recently dismissed the taxpayer’s appeal in Lipson v The Queen. The case involved a transfer of company shares between spouses financed with borrowed funds secured against the taxpayer’s residence, which triggered the application of the spousal attribution rules. The minister of national revenue challenged the transactions under the general anti-avoidance rule.
Isle of Man
High Court Allows Evidence by Live Video Link in Civil Proceedings
15/10/2009 The High Court recently granted an application made in the context of civil proceedings for the admission of witness testimony and the conduct of cross-examination by live video link. It is believed to be the first occasion in Manx civil proceedings on which evidence has been adduced and cross-examination has been conducted by this means.
New Civil Procedure Rules Introduced
01/10/2009 The new Rules of the High Court of Justice seem to promote a more hands-on case management approach. It is hoped that this will lead to justice being done more quickly than in the past, yet with equal thoroughness. Although it remains to be seen how court users, the judiciary and advocates will shape the rules, it is clear that the new rules represent an exciting step forward.
Registering and Owning Private and Corporate Aircraft
24/09/2009 The Isle of Man Aircraft Registry provides for the registration of private and corporate jets and twin turbine-engine helicopters. At present, it is the only dedicated corporate aircraft register in Europe. In order to register an aircraft with the Isle of Man Aircraft Registry, certain procedures must be followed.
Annual Leave Entitlement and Long-term Sickness: The Manx Difference
03/09/2009 In Stringer v HM Revenue and Customs the House of Lords ruled that an employee accrues statutory holiday throughout any periods of sickness and that such accrued holiday is to be paid in lieu in the event that the employee's contract of employment is terminated. However, the Manx Department of Trade and Industry has since clarified that this judgment does not apply in the Isle of Man.
New Directors' Disqualification Regime Takes Effect
25/06/2009 A significant new directors' disqualification regime has come into force. The Company Officers (Disqualification) Act 2009 has replaced much of the previous statutory provision, in particular Section 26 of the Companies Act 1992. It will be interesting to see what impact the new law has on the number of judicial disqualification orders that will be made in future.
Strike-Out Possible Even Where No 'Unless' Order Has Been Made
21/05/2009 In a recent decision, following an application to strike out the plaintiff's claim, the High Court found that a deliberate failure to comply with a specific order of court, whether peremptory or otherwise, is capable of founding a successful application to dismiss an action. Therefore, it is in the defendant's best interests to be as focused as the plaintiff in respect of the plaintiff's obligation to proceed expeditiously with legal proceedings.
International
Implications of Madoff Fallout
21/05/2009 Many offshore funds have lost large sums of money in the Madoff scandal and face further issues from the liquidation of Bernard L Madoff Investment Securities. Directors have much to consider, including whether the fund which they thought was healthy may now be insolvent and potential derivative actions and misselling claims.
Jersey
It Was All a Mistake!
29/10/2009 A recent Royal Court of Jersey judgment demonstrates the court's approach to an application to set aside a trust and certain gifts made under it on the grounds of mistake. It also provides some useful guidance on the approach to be taken by convening parties on trust-related applications.
Servicing Non-Jersey Funds and Circulating Non-Jersey Fund Prospectuses
08/10/2009 Since the introduction of the Codes of Practice for Fund Services Business and related changes to the funds legislation in Jersey, in most cases a Jersey entity that wishes to carry on fund services business in relation to a publicly offered non-Jersey fund will be able to do so entirely under its Financial Services (Jersey) Law 1998 registration, acting in accordance with the codes.
Migrating Foundations to Jersey
16/07/2009 The Foundations (Jersey) Law 2009 will soon come into force. The law will permit the establishment of Jersey foundations, which will be incorporated bodies that can hold assets, transact business and sue and be sued in their own name. The flexibility of the law makes Jersey an attractive jurisdiction for clients considering establishing a foundation for private wealth management purposes.
Private Placement of Shares in a Jersey Company
21/05/2009 As a result of the shortage of liquidity in the bank lending markets, many businesses need additional funding. One source of funds might be a private placement of shares. This update looks at some of the Jersey law issues that may arise in the context of a private placement of shares by a Jersey company.
Cash-Box Structures and Convertible Bond Issues
07/05/2009 Companies in the United Kingdom are facing needs to recapitalize their balance sheets and raise money from their assets. Convertible and exchangeable bonds offer a way of meeting these various requirements. Structuring a convertible or exchangeable bond issue using a Jersey cash-box structure can make it easier to implement the bond issue and may also offer other benefits.
Cash Boxes: Use of Jersey Companies in Rights Issues
19/03/2009 Structuring a rights issue for a UK listed company using a Jersey cash box vehicle can make it easier to implement and add to the benefits therefrom. The advantages that a cash box structure offers are flexibility in relation to making the offer and, in relation to the proceeds of the issue of the shares, the availability of merger relief under the UK Companies Act.
Product Liability
Canada
Canada Moves to Detect and Prevent Foodborne Illnesses
01/10/2009 The government recently announced an injection of C$75 million into Canada's food safety system to improve Canada's ability to prevent, detect and respond to future foodborne illness outbreaks. In addition, the government announced that it will act on all 57 recommendations issued by the independent investigator for the Listeriosis Investigative Review.
First Class Action Win for the Pharmaceutical Industry in Quebec
10/09/2009 The Quebec Superior Court recently dismissed a motion for authorization to institute a class action made by the petitioner on behalf of all persons residing in Canada who alleged to have experienced dependency and withdrawal problems caused by the use of the antidepressant medication marketed under the name PAXIL.
New Lead Limits Proposed
16/07/2009 Canada is proposing regulatory action to limit the amount of lead contained in specific products that can come into contact with the mouth. The proposal provides a non-exhaustive list of the affected products. Comments may be submitted to the Consumer Safety Bureau of Health Canada.
Phthalates - Canada Catches Up
09/07/2009 Canada has proposed legislative amendments that would restrict the sale, importation and advertising in Canada of six types of phthalate that are commonly used in children's toys and childcare products. The government has cited adverse health effects, primarily reproductive in nature, as a justification for proposed regulatory action.
2009 Recall Update: Learning From the Lessons of 2008
21/05/2009 Recalls of consumer products continued to grow in number and severity in 2008. The safety of food and consumer products has taken on greater prominence in the media and in legislative policy. The entry into force of the US Consumer Product Safety Improvement Act and new regulatory initiatives in Canada herald an era of increasing public and regulatory scrutiny of food and consumer product safety.
Caveat Venditor Continues
26/02/2009 The federal government recently reintroduced its proposed Canada Consumer Product Safety Act as Bill C-6. The legislation followed the announcement in the recent budget that the government will provide C$113 million over two years to fund Canada's Consumer Product Safety Plan. Regrettably, the government failed to fix the flaws that had been identified in the previously proposed legislation, Bill C-52.
Germany
Supreme Court Delivers Sweet Ruling for Pastry Manufacturer
10/09/2009 A recent case before the Federal Supreme Court explored the basic principles of product liability law and demonstrated the interaction between consumers' reasonable expectations in regard to product safety and the manufacturer's duty of care with regards to providing reasonably safe products.
Limits of Manufacturers' Non-contractual Liability for Products with Safety Defects
21/05/2009 The Federal Supreme Court has rendered a groundbreaking decision regarding the distribution of costs in cases involving product recalls. The court confirmed that liability in tort is not aimed at providing the customer with a product which is free from defects; rather, it is to protect 'absolute legal interests' such as life, health and property.
Australia
Australian Made? Senate Proposes Changes to Food Labelling Laws
10/09/2009 A new bill recently introduced into the Senate seeks to clarify confusing labelling laws for consumers and primary producers by introducing 'truth in labelling' for foods and beverages sold in Australia. Under the proposed bill, claims such as 'Australian made' will require the food itself to be 100% produced in Australia, excluding any product container or product label.
FSANZ Proposes New Standard for Nutrition, Health and Related Claims
25/06/2009 Food Standards Australia New Zealand (FSANZ) recently released a consultation paper for public and stakeholder review and consultation. The paper sought input on FSANZ's proposed approach to the regulation of general level health claims made in respect of food products and on amendments to the draft standard for the regulation of nutrition, health and related claims.
New Harmonized Consumer Protection Laws
02/04/2009 The federal government is fast-tracking the long-awaited reform proposals to harmonize Australia's consumer protection laws. The proposed reforms include the development of an Australian consumer law and the introduction of a new national product safety regulatory and enforcement framework.
Voluntary Limitation of Advertising to Children by Food and Beverage Companies
15/01/2009 The Australian Communications and Media Authority has consulted on the Draft Children’s Television Standards 2008, which regulate the content of children’s television programmes and advertising during designated children’s viewing times on commercial free-to-air television in Australia. The initiative also applies to indirect advertising such as product placement.
European Union
New EU Machinery Directive Announced
19/02/2009 At the end of 2009 a new, more rigorous EU directive on machinery safety will enter into force. The new directive constitutes part of the so-called 'new approach' towards the technical harmonization of laws and regulations in order to create a uniform and harmonized European market.
Turkey
Defective Products and Consumer Rights
05/03/2009 Under the Consumer Protection Law, a 'defective product' is defined as a product with physical, legal or economic deficiencies that reduce its quality, quantity or standard. Responsibility for a defective product lies with the product's producer, seller, distributor, agency and exporter. Article 4 of the law provides that in case of a defective product, the consumer may exercise one of four rights.
United Kingdom
Understanding the General Product Safety Regulations
29/10/2009 The obligation to manufacture and supply only safe products has long been enshrined in statute, but the 2005 regulations represented a significant change in the extent of those obligations, which have become more onerous for all those involved in the supply chain to consumers. Producers and distributors are now under greater pressure to ensure that their products are safe.
Understanding Medical Device Regulations
24/09/2009 The world's ageing population and a demand for higher standards of healthcare and technology make the medical devices industry increasingly lucrative. Manufacturers, healthcare bodies and their insurers should familiarize themselves with the medical device regulations, review their medical device research, development and production practices and decide whether the regulations apply to them.
Scope of Duty and Causation: Defendants Pay Price for Poor Maintenance
06/08/2009 The courts are often reluctant to impose a heavy burden on product manufacturers in circumstances where a long time has elapsed since the product first went into use. In a recent case the judge had regard to the poor maintenance practices of those responsible for the product's operation and ruled that warnings of potential dangers, if given, would not have been heeded.
The Bad Taste of Food Product Recalls
25/06/2009 In the midst of the credit crunch and with the UK population increasingly conscious of its health and diet, food product recalls make sensational headlines. The Food Standards Agency's precautionary recall of biscuits containing melamine, even though they were thought unlikely to pose a significant health risk, exemplifies the risk posed by food products and the vast costs that a recall can entail.
The Proof of the Pudding: New Draft Food Labelling Regulations
30/04/2009 New draft regulations include proposals for mandatory front-of-pack nutrition labelling for all pre-packaged processed foods and recommended guideline daily amounts for energy, fat, saturated fat, carbohydrates, sugars and salt. Food industry businesses should review the information provided on their product labels and be aware of the consequences of a seizure or forced recall of their products.
A Menu for Safety: Understanding Food Regulation
05/03/2009 It is an offence for anyone to sell or store for sale food that is unfit or dangerous to a consumer's health or is not what a consumer is entitled to expect in terms of content, quality or description. Food businesses must ensure that food products are handled in a hygienic way at all stages before reaching the consumer.
China
Government Compensation Plan: Is That All For Melamine Milk Victims?
28/05/2009 The government has issued a plan to assist people whose health has been affected by contaminated milk, but the one-off payments offered fall short of the remedies provided for by law. After many attempts, a court has finally accepted a civil claim against a milk company, but the claimants' lawyers fear that the low levels of compensation in the plan may effectively cap any compensation award.
USA
Illinois Ruling Gives Teeth to Sole Proximate Cause Defence in Asbestos Litigation
20/08/2009 For many years the decision in Lipke v Celotex Corp has put Illinois asbestos defendants at a strategic disadvantage by limiting the evidence admissible at trial to that evidence regarding the plaintiff's exposure to parties' products. However, the Illinois Supreme Court recently relaxed that standard, holding that a defendant may present evidence of the plaintiff's exposure to a non-party's products.
Not Always 'Full Faith and Credit' for 'Nationwide' Class Action Settlements
16/07/2009 If a class action involves products sold in more than one state, multiple class actions may be pending at the same time. A final judgment in one state is supposed to be enforceable in all other states pursuant to the 'full faith and credit' clause of the Constitution, but whether a nationwide class action will actually be afforded full faith and credit depends on several factors.
Ensuring Compliance with Consumer Product Safety Improvement Act
04/06/2009 The Consumer Product Safety Improvement Act of 2008 places new and significant regulatory compliance burdens on all businesses involved with consumer products in the United States. Assessing the risk of non-compliance with the requirements of the amended act and developing a comprehensive programme for compliance with the amended act are necessities for companies large and small.
Eleventh Circuit Defers to FDA Rule Findings
08/01/2009 The Eleventh Circuit Court recently held that in an action to enforce a ban on the sale and distribution of dietary supplements containing ephedrine alkaloids, the Food and Drug Administration (FDA) may rely on its own rule as sufficient evidence that ephedrine is dangerous. If an existing FDA regulation or rule labels a product dangerous, a court need not conduct its own investigation into the product.
France
Science and the Courts: The Hepatitis B Vaccine Saga Continues
30/04/2009 Several eagerly awaited judgments have recently been handed down by the French civil courts in product liability cases involving the vaccine for the hepatitis B virus. These were the first decisions on the issue since the Court of Cassation altered its case law on May 22 2008 with respect to the demonstration of a causal relationship between the vaccine and neurological disorders such as multiple sclerosis.
Prescription Periods Affected by 2008 Reform
05/03/2009 The reform introduced by Law 561/2008 simplified and harmonized the different prescription rules with respect to civil matters by significantly reducing the number of different statutes of limitation. However, in the field of product liability, several prescription periods still apply, including some with different starting points.
Austria
Product Liability from Organizational Shortcomings
22/10/2009 Sometimes even small things can have a big impact. In a recent case a screw on a circuit breaker that was not tightened properly (costing approximately €550) led to a chain reaction of failures, resulting in damages of €27,116.50 (partly for damaged equipment and partly for loss of income) and a groundbreaking Supreme Court decision.
Projects & Procurement
Ireland
Construction project funding: a return to more rigorous constraints?
06/10/2009 The effects of the ongoing financial downturn continue to be felt keenly. As a result of the perceived increased risk of borrower insolvency, banks have reverted to closer scrutiny of all stages of the project financing process. This update summarizes the ways in which banks can ensure that all aspects of their pre-drawdown criteria have been met.
Spain
Specific PPP Contract to Shelter Real Estate Projects
21/07/2009 The Public Sector Contracts Act, which implemented the EU Public Sector Procurement Directive, has introduced a new category of public contract in Spain - the public-private collaboration contract. This innovation has sparked debate among authors and commentators. Such contracts can be entered into only once the alternative models have been explored and rejected.
Netherlands
New Infrastructure Legislation
29/09/2009 The recently published Law on the Acceleration of Decision Making for Road Infrastructure Projects aims to simplify and accelerate the decision-making process in planned road construction projects. Following the entry into force of the law, further legislation has been drafted in order to expedite other infrastructure and construction projects.
Albania
New Rules on Electronic Procurement
30/06/2009 The Council of Ministers has established that all public procurement procedures shall be carried out in electronic form from the end of January 2009. The new system creates flexibility, reduces the cost and time involved in the preparation of documents and increases efficiency, transparency and confidentiality of data.
Concessions Law Amended
10/03/2009 Concessions have become an increasingly important form of public-private partnership in Albania, being particularly utilized in projects for the construction or rehabilitation of hydropower plants. Several amendments were introduced late last year to the existing Concessions Law, including consolidation of the lender step-in right and changes to the way contracts are approved.
Austria
Impact of Economic Crisis on Public Procurement Law
28/04/2009 The EU Public Contracts Directive allows recourse to accelerated procedures where such recourse is justified on grounds of urgency, and the European Commission has recognized that the current economic situation can justify the use of such procedures. As a result, the contracting authorities are to reduce the deadlines for restricted procedures with prior notice and negotiated procedures with prior notice on grounds of urgency.
Greece
New Guidelines Published on Commencement of Works
17/02/2009 In October 2008 the Ministry of Economy and Finance issued guidelines regarding the definition of the term ‘commencement of implementation’ for projects for which an application has been made for consideration under the Investment Law and for the grant of associated subsidies. The guidelines have been issued following long debates on when expenditure on a project is deemed to start.
Poland
New PPP Law Brings Promising Changes
03/02/2009 Given that Poland is to host the Euro 2012 football championships, the creation of real possibilities for the realization of infrastructure projects and the provision of services based on the public-private partnership (PPP) formula has become imperative. In consideration of this, the government prepared a new draft PPP Act.
Sweden
Hospital Procurement on PPP Basis
26/05/2009 Stockholm County Council has begun the procurement process for the development of the New Karolinska Solna University Hospital on a public-private partnership basis. The total investment is estimated at SKr14.1 billion (2007 nominal value), making this probably the largest building project under procurement in Sweden.
New Zealand
Government Issues Discussion Paper on National Infrastructure Plan
29/09/2009 In preparation for the eagerly awaited National Infrastructure Plan, the National Infrastructure Unit has issued a paper to guide discussions with stakeholders. In addition to outlining the state of New Zealand's infrastructure, it describes certain principles for, and the likely direction of, future investment. It also contains a sector-by-sector description of existing infrastructure, planned investment and present policy.
Reforms Promise Greater Coordination in Infrastructure Investment
16/06/2009 The government has pledged NZ$7.5 billion for infrastructure investment over the next five years and has addressed concerns over the lack of coordination in national or regional infrastructure planning. Among other things, a new Ministry for Infrastructure is reshaping and coordinating the government's infrastructure objectives and a new National Infrastructure Unit will formulate a national infrastructure plan.
Resource Management Act Reform Changes Projects Landscape
03/03/2009 Changes to New Zealand's primary environmental legislation could have a significant impact on projects and procurement. Key aspects of the first phase of reform include streamlining processes for projects of national significance and removing frivolous, vexatious and anti-competitive objections, thus reducing competitors' capacity to use such legislation to delay or hinder projects.
Ukraine
New Tender and Approval Procedure: Private Investors Must Tread Carefully
20/10/2009 A Cabinet resolution revises the procedure whereby state enterprises, institutions and organizations may attract commercial investors, clarifying the requirement to hold tenders on open bidding terms. However, it remains unclear whether certain forms of relationship, including public-private partnerships, are affected. Until this is clarified, investors partnering with state enterprises are on uncertain ground.
Clearer Legal Landscape for PPPs
18/08/2009 New framework legislation determines the principles of economic cooperation between the public and private sectors. Among other things, it provides for various forms of support and guarantee for private partners, widens the scope of activities in which public-private partnerships may engage and sets out the procedure to be followed if a private partner is to be given rights to use land.
Government Issues Decree on Single and Restricted Tendering
09/06/2009 A decree from the Ministry of the Economy lists the documents that must be submitted to the ministry when agreeing the procedure for single and restricted tendering. It also sets out the technical and economic basis for establishing single tendering and clarifies the grounds on which the ministry may reject an application.
Criticism for Government's Tendering Sidestep in Football Stadium Project
03/02/2009 Changes to the Regulation on the Purchase of Goods, Works and Services from State Funds specify that the regulation will not apply to the procurement of land surveys, scientific and research projects and disassembly work in connection with the renovation of the Olympic Stadium for the Euro 2012 football championships. However, the change contradicts legislation that prohibits new laws for specific projects.
Securitisation & Structured Finance
European Union
Safeguarding Securitization Market During Economic Crisis
16/06/2009 Recent amendments to EU Directive 2006/48/EC require banks to keep on their balance sheet 5% of the receivables they transfer to securitization vehicles. This requirement is expected to boost the securitization market, which has suffered during the economic crisis, and to help to ensure the market's survival.
Sweden
New Industry Code Regulates Structured Investment Products
22/09/2009 The Swedish Securities Dealers Association has launched an industry code regulating structured investment products offered to the public, aiming to make it easier for investors to compare and evaluate the products on offer. The code applies to structured investment products which are offered to the public and where a prospectus requirement applies.
Switzerland
The Mortgage Bond System: An Alternative Source of Finance
14/04/2009 The ongoing disruption of credit and capital markets is urging banks to pursue refinancing solutions that have rarely been used in the past or that have previously been used in a different context. A recent transaction shows that the mortgage bond system might become an efficient refinancing tool in situations where a secured refinancing transaction is difficult to structure or an off-balance sheet securitization is not possible.
France
Recent Developments in Securitization Law
27/10/2009 Two landmark developments in securitization and structured finance have recently taken place: an attempt at introducing provisions to facilitate Islamic finance - in particular, sukuk - and developments in litigation concerning commercial mortgage-backed securities.
Asset-Backed Securities and Islamic Finance
18/08/2009 The government is looking to enhance Islamic finance and more specifically the issue of sukuk (Islamic asset-backed securities). France has already taken steps in favour of Islamic finance - the stock exchange regulator has published a recommendation on the listing of sukuk on Euronext Paris regarding the set-up and distribution of Islamic financial products, such as Sharia-compliant collective investment schemes.
Indonesia
Bank Indonesia Regulation on Commercial Banks' Dollar Repo Transactions
05/05/2009 As part of its efforts to maintain the stability of the rupiah and to ensure an adequate US dollar supply in the domestic market, Bank Indonesia has issued a regulation regarding commercial banks' dollar repo transactions. The regulation opens a window for commercial banks in Indonesia to perform such transactions with Bank Indonesia.
Spain
Modernizing Mortgage Market Legislation to Boost Securitizations
30/06/2009 Spanish securitizations, particularly mortgage securitizations, have grown spectacularly in the past decade. The passing of a royal decree to complete the legislative overhaul of the Spanish mortgage market is expected to make Spanish mortgage-backed securities and Spanish securitizations more competitive once the international markets recover.
USA
Financial Reforms: Changes in Store for Securitization Markets
07/07/2009 The Obama administration's plans for overall regulatory reform of the financial system in response to the ongoing financial crisis would dramatically increase the federal government's role in the capital markets, although changes affecting the securitization markets may be less significant than some had anticipated.
EU Proposals to Vet Ratings Agencies: Lessons for US Regulators?
30/06/2009 The parties which are blamed the most consistently for the current economic downturn are the three major credit rating agencies. The European Parliament recently approved a new registration and ongoing oversight regime for credit rating agencies active in the European Union. It is hoped that the United States will follow this lead and attempt to reform ratings, rather than remove minimum ratings requirements.
Federal Reserve Schedules Initial TALF Funding
31/03/2009 The Federal Reserve's Term Asset-Backed Securities Loan Facility (TALF) has now begun operation. The Treasury Department and the Federal Reserve have announced the schedule for TALF borrowings and published revised terms designed to address concerns that market participants had expressed about the programme.
Federal Financing Programme to Include Commercial Mortgage-Backed Securities
24/02/2009 A joint initiative of the US Department of the Treasury and the Federal Reserve based on the Term Asset-Backed Securities Loan Facility will provide up to $1 trillion of financing for asset-backed securities and commercial mortgage-backed securities. The new Consumer and Business Lending Initiative will provide non-recourse loans secured by asset-backed securities.
Department of Education Backs New Conduit for Student Loans
03/02/2009 The Department of Education has established the first federally guaranteed student loan asset-backed commercial paper conduit programme. Under the programme, beneficial owners of fully disbursed FFELP Stafford and PLUS Loans, for which the first disbursement was made between certain dates, may sell such eligible student loans to their newly created, bankruptcy-remote special purpose entities.
Federal Reserve Revises TALF Terms to Support ABS Markets
20/01/2009 The Federal Reserve has released revised terms of the Term Asset-Backed Securities Loan Facility (TALF) that extend the term of TALF loans from one year to three years, make financing available to all eligible borrowers and clarify the collateral eligibility requirements. The new credit facility is expected to begin operation in February 2009.
Shipping & Transport
Canada
Choice of Law Clauses, Enforcement of US Maritime Liens and Necessaries Suppliers
17/06/2009 In a recent case the Federal Court of Appeal ruled that a choice of law clause in a necessaries supply contract should be upheld unless there is a compelling case to be made that another jurisdiction has a closer and more substantial connection to the transaction.
Supreme Court Declines Opportunity to Consider Issues Raised in Cougar Ace
14/01/2009 The Supreme Court of Canada recently dismissed the application for leave to appeal the decision of the Federal Court of Appeal in the Cougar Ace Case, with costs. By declining the opportunity to consider the issues raised in this case, the debate over the interpretation of Section 46(1) of the Marine Liability Act may well continue in future cases.
Chile
Regulation to Expedite Container Recovery Issued
16/09/2009 The Customs Authority recently issued Resolution 4730/2009, which amended Chapter III of the Compendium of Customs Regulations. The deconsolidation of a container can now be requested whenever the goods cannot be cleared during or after the legal storage period, or whenever the dispatch has been suspended. It is hoped that these changes will expedite the turnaround time for container use.
Court of Appeal Confirms that Notice of Arrival of Goods is Not a Carrier's Duty
25/02/2009 The Iquique Court of Appeal recently issued a second instance judgment confirming a recent arbitration award which held that in Chile, the carrier and its agents and servants are not liable for failure to notify the consignee of the arrival of the vessel and goods.
Finland
New Road Cabotage Rules Introduced
15/07/2009 The government has approved a bill which specifies the circumstances in which road hauliers from one EU country can transport goods in another. The bill implements into Finnish law regulations approved by the European Parliament in April 2009. The new rules are likely to come into force in Summer 2009.
New-Year Changes to Fairway Dues Act
07/01/2009 The fairway dues collection system was traditionally based on a procedure whereby a foreign shipowner appointed a Finnish agent, and the agent and foreign shipowner were jointly and severally responsible for payment of the fairway dues imposed on the respective vessel. However, to comply with EU law, from January 1 2009 the shipowner alone is liable for paying fairway dues.
Italy
Invalid Clauses in Maritime Transport Consumer Contracts
29/07/2009 The Court of Palermo recently ruled that certain clauses in a carrier's contracts for the transport of passengers by sea were void, as they violated the Consumer Code and potentially disadvantaged passengers. The ruling follows a judicial opinion that interprets general conditions of carriage as clauses subject to Article 1341 of the Civil Code, even if such conditions have been approved by the Ministry of Transport.
Supreme Court Rules on Fuel Tax Reduction for Rail Transport
13/05/2009 The Supreme Court has ordered an iron and steel producer to pay full price for the fuel it uses to transport scrap iron. The company had claimed a reduced tax rate under legislation that implements the EU Mineral Oils Directive. However, the court did not explicitly support the Ministry of Transport's view that such a reduction should apply only to transport services with an element of public utility.
New Zealand
Security Interests in Ships
26/08/2009 New Zealand has two registers in which security interests over ships can be registered: one under the Ship Registration Act 1992 and one under the Personal Property Securities Act 1999. A High Court case offers a measure of clarity and comfort for foreign mortgagees seeking to understand their position.
Is Master's Outrageous Conduct an Act in the Navigation and Management of a Ship?
01/07/2009 The Court of Appeal recently decided, by a majority, that a master's "outrageous conduct" did not come within the carrier's exception of liability under Article IV Rule 2(a) of the Hague Visby Rules. The majority and minority judgments reach fundamentally opposed conclusions by applying ostensibly identical principles.
Is the Carriage of Goods Act 1979 a Code?
03/06/2009 The Court of Appeal recently rendered a majority decision in Ports of Auckland v Southpac Trucks which has implications for all parties performing carriage in New Zealand. The act had previously been understood to constitute a code, whereby everyone involved in carriage could rely on the NZ$1,500 limit for cargo loss. However, the court's decision has created uncertainty for carriers.
Belgium
Arbitration and Choice of Law Clause in a Ship Agency Contract
08/07/2009 In ship agency contracts it is common practice to find clauses that refer disputes between the parties to arbitration and that make the contract subject to a specifically defined law. However, a case before the Antwerp Commercial Court between a Belgian ship agent and a foreign, EU-based shipping line has broken new ground.
Conflict between Arrest Convention and Cross-Border Insolvency Proceedings
29/04/2009 The ongoing economic crisis has brought new topics before Belgian arrest judges and is giving rise to significant discussions about the influence of insolvency proceedings on matters of ship arrest. The effect of foreign insolvency proceedings on the arrest of a German-owned ship in Belgium was the subject of a recent Antwerp Court of Appeal decision.
Germany
Supreme Court Rules on Goods Damaged during Inland Transportation
21/10/2009 The Federal Supreme Court has ruled on a case in which goods had been damaged during both the inland transportation and the return sea voyage. In deciding the case, the court ruled on the circumstances under which a carrier has the right to limit its liability if it is unable to explain the cause of the damage.
Forfeiting of Carrier's Right to Limit Liability
09/09/2009 The Federal Supreme Court has ruled on the requirements applicable to the forfeiting of a carrier's right to limit liability in the context of shipping. The finding that a carrier forfeits its right to limit liability only where it is guilty of a qualified fault is in line with previous court rulings. Regardless of the arguments on this issue, practitioners must take note of the ruling since the lower courts are very likely to follow suit.
Notice of Liability May Not be Given by Email
08/07/2009 A recent case before the Higher Regional Court of Munich dealt with the question of whether a notice of liability may be given by email or must be given in writing. The claimant argued that, since notice of damage is permitted to be given in the form of an email, emailed notice of liability should also be considered legitimate. The court disagreed.
Extent of Carrier's Lien
20/05/2009 The issues surrounding the right of retention based on a contractual or statutory lien are highly significant, since such liens may constitute the only promising way for a carrier to seek the satisfaction of claims against an insolvent freight forwarder. However, the owner's interests must be taken into account, since goods owners usually have nothing to do with the problems between the freight forwarder and the carrier.
Regional Court Rules on Non-consensual Cargo Handling
22/04/2009 A recent case before the Hamburg Regional Court addressed the question of whether German shipping law could be applied to cargo handling in the course of a stopover during a sea carriage, where transshipping between the two parties involved had not been consented to.
Carrier’s Liability During Discharge by Delivery Driver
28/01/2009 The carrier is generally liable for damage to a consignment which occurs within its custody after takeover and before delivery. If the damage arises while the consignment is still on the load floor of the lorry during unloading by the driver, the carrier’s liability depends on whether the damage occurred before or after delivery.
International
The Perils of Piracy: The Year So Far
10/06/2009 From a January low of seven ships held, recent months have seen a considerable spike in hijackings and attacks, with 18 ships seized by pirates. Dozens of pirates have been captured by patrolling naval vessels and there is renewed political will to see them prosecuted. Against that, ransoms appear to be going up, indicating that the risk/reward ratio for the pirates remains unchanged.
Delay in Pursuing Bunker Claims Can Be Fatal
08/04/2009 Even the most experienced industry observers have been surprised by the speed with which optimism in the shipping market has waned in recent months and most expect there to be casualties. Lack of access to credit, combined with sharply rising operating costs, could mean that certain time charterers, operators and owners that built or contracted in a time of plenty will struggle to survive.
When the Worst Happens: Recovering Piracy Losses
11/03/2009 Commercial risk takers spare little thought for the supposed romance and mysticism of piracy when considering the likely fate of their cargo on vessels plying pirate-infested waters. What is the position of a shipper's cargo insurance arrangements and its prospect of indemnity should an act of piracy occur and its cargo become prey to ransom demands and possible loss or damage?
Spain
Application of General Insurance Default Interests to Marine Insurance Contracts
15/07/2009 The Supreme Court has clarified the law on the supplementary application of general insurance default interests to marine insurance contracts. Should parties fail to provide for a regulation on the interests applicable to indemnity in case of late payment by the insurer and unless the parties have expressly excluded the application of the Law on Insurance Contracts, the loophole will be filled by Article 20 of the law.
Insolvency of Spanish Shipyard and Its Effects on Shipbuilding Contracts
06/05/2009 This update looks at the power granted to insolvency judges regarding the termination of a shipbuilding contract when, at the time the insolvency proceedings are initiated, obligations of both parties are still pending (ie, the shipyard for construction of the vessel and the shipowner for the payment of instalments).
Precautionary Arrest of Ships
04/03/2009 The provisions of the 1952 Brussels Convention on the Arrest of Seagoing Ships were ratified by Spain in 1953. They apply to vessels flying any flag pursuant to Articles 1, 2 and 3 of the Law on the Precautionary Arrest of Foreign Seagoing Vessels. The Spanish rules regarding interim and precautionary measures such as arrest are governed by Articles 721 to 747 of the Civil Procedure Act.
Cyprus
Taxation of Ship Management Companies
18/03/2009 The Department of Merchant Shipping recently issued a circular reminding ship managers of the arrangements for assessment and payment of their tax liabilities for 2008. Under Section 19 of the Income Tax Law 2002, ship managers may opt to be taxed according to the prevailing Income Tax Law at a rate of 4.25% on their income from ship management services.
Hong Kong
Understanding ship arrest procedure
02/09/2009 Arresting a ship in Hong Kong is generally an easy process, particularly for those familiar with English law. This update outlines the arrest procedure and considers related issues, such as types of admissible claim and the appraisal and sale of a vessel pending litigation.
'Phantom Ships' and the Institute Cargo Clauses
01/07/2009 'Phantom ships' is the term used for vessels without valid classification which are not registered with a recognized ship registry and are usually operated by criminals. This update considers the risks involved - as exemplified by a High Court case - and the provisions in the Institute Cargo Clauses.
New Civil Justice Regime: Impact on Shipping Cases
20/05/2009 The extensive revision of Hong Kong's civil justice rules seeks to allow litigants, lawyers and the courts to cooperate in order to resolve disputes in a practical, fair, time-efficient and cost-effective manner. It might be argued that shipping and transport lawyers have always followed the spirit of these underlying objectives; however, the new rules are expected to have a considerable impact on their work.
Netherlands
One claim, two proceedings
28/10/2009 The Rotterdam District Court recently rendered an important judgment regarding the 'suit pending' status of two proceedings instituted on the same day in two EU member states. Since the Dutch bailiff had received the writ at 10:25am and since the Italian proceedings were pending only from 11:00am, the court considered that the Dutch proceedings were pending first - the Dutch court was therefore competent to hear the case.
Bow thruster liability ruling
07/10/2009 A recent Hague Court of Appeal decision on limitation of liability on inland waterways will be of interest to maritime jurisdictions throughout Europe, where there is a dearth of case law on the issue of whether a thruster's power should be taken into account when deciding liability limitation.
Court Holds That Damages Can Be Offset against Down-Payment
09/09/2009 The Amsterdam District Court has found in favour of a Netherlands-based shipyard in a contractual dispute over damages and loss of profits resulting from the decision to rescind a contract to build a luxury yacht for Bermudian principals. The court held that Alpha was in default by virtue of having rescinded the contract unlawfully, as a result of which it was liable for all damages incurred by the shipyard.
Rotterdam Court Upholds Algerian Arrest Order
29/07/2009 The Rotterdam District Court has upheld the right of an Algerian court to order the arrest of a container vessel by a Dutch bunker supplier for the non-payment of bills. In so doing it dismissed an application to lift the arrest on the grounds that the claim could not be enforced against the ship because, among other things, proper justice in the case was not achievable in Algeria.
Food for Thought as Rotterdam Court Rules against Overweight Cook
20/05/2009 A recent Rotterdam court decision to dissolve the employment contract of a ship's cook for being overweight was correct, but the cook should have been awarded some compensation for his length of service. The cook had been declared unfit to work and refused a medical certificate because he was unable to pass through a manhole unaided, as required by regulation.
Remedies for Lenders in the Recession
25/02/2009 Shipping has been hit hard by the recession. In particular, the bulk and container markets are suffering badly under the worldwide economic downturn. During the shipping boom that lasted until last year, many shipowners bought ships at high prices against high lending. A large number of those owners can now no longer pay back principal and interest to their lenders.
Sweden
Sailing with Paying Crew Considered Commercial Shipping
07/10/2009 The Supreme Court recently found that the skipper and one crew member of a pleasure yacht had breached the Vessel Safety Act, as the skipper lacked the certificates required to captain a commercial vessel. The case highlights the fact that even vessels carrying paying crew members must fulfil the requirements applicable to commercial traffic on crewing and safety regulations.
New Sulphur Regulations to Impact on Shipping Industry
26/08/2009 The Maritime Authority has recommended that measures be instituted to alleviate the effects of the new tighter limits on the sulphur content of marine fuel. The authority has suggested the introduction of transport subsidies at ports, increased funding or investment in the research and development of alternative fuels, better purification methods, the development of more efficient engines and reduced fairway charges.
Government Aims to End Passenger Rail Monopoly
27/05/2009 As the government pushes ahead with market-oriented reform, plans are in motion to open up the railways to full competition by 2010. If the bill passes through Parliament, passenger rail services will be open to full competition from October 2010, thereby giving effect to EU Directive 2007/58/EC on the opening up of the community market to international passenger services.
New Transport Agency Covers All Modes of Transportation
21/01/2009 The role of the new Swedish Transport Agency is to supervise the four fields of transport: railways, aviation, maritime and road. Under the new agency each mode of transport has its own department. However, rather than resulting in any substantial alterations, the new agency is merely a restructuring of the authorities handling transport inspections and regulations in Sweden.
Malta
How Mortgagees Can Protect Their Position under Maltese Law
09/09/2009 The financial crisis has brought with it increased requests from mortgagees about how best to protect their interests. Fortunately for mortgagees of vessels registered in Malta, a mortgage duly registered in the Shipping Register is an executive title and therefore equivalent to a judgment. This means that in case of default, the mortgagee need not prove title or go through any court procedures to enforce the mortgage.
New Single Warrant of Arrest Created
28/01/2009 In December 2008 Parliament passed Act XV/2008, which brought into force a number of procedural changes, including the creation of one single warrant of arrest of a seagoing vessel to replace the previous warrant of impediment of departure and warrant of seizure.
Portugal
Economic Study and Draft Navigation Law Seek to Boost Shipping Sector
07/10/2009 A recent report on maritime economic activity has given rise to several proposals to support sea carriage and shipbuilding. In addition, a change to the ranking of priorities for claims in favour of mortgagees will help to improve the competitive position of the Portuguese fleet, while a draft navigation law is likely to facilitate ship arrest in Portugal.
Sea Reports: Relevance for Claimants and Defendants
17/06/2009 Many owners and insurers of vessels operating in the Portuguese jurisdiction, calling at Portuguese ports or sailing in Portugal's coastal waters are unaware of the importance of presenting a sea report following an incident at sea if damages or compensation may be sought in proceedings in Portugal. Potential claimants and defendants are well advised to follow and intervene in the inquest to confirm such a report.
New Regime for Ranking of Priorities Benefits Mortgagees
18/02/2009 New legislation has changed the ranking of priorities over Portuguese-flagged ships in favour of mortgagees. Most newbuilds and purchases of ships in service are financed by banks or leasing companies that require owners to flag their vessels in mortgagee-friendly jurisdictions; the recent change aims to halt a 20-year decline in the numbers of Portuguese ships and shipowners.
Singapore
High Court Rules on Arrest of Vessels as Security in Foreign Proceedings
08/07/2009 In a recent case the High Court allowed the claimant to arrest a ship in Singapore in order to obtain security for a judgment in a foreign jurisdiction. The decision is unusual, given that the court had previously held that its jurisdiction to arrest a ship in an action in rem should not generally be exercised in order to provide security for an award or judgment in another jurisdiction.
Brazil
Maritime Agency Considers Changes to Regulations on Chartering Foreign Vessels
28/10/2009 The National Maritime Administration Agency is considering alterations to the norms governing the charter of foreign vessels for cabotage and maritime support. With regard to cabotage, the agency intends to extend the circulation period to five days, while its changes to the existing offshore support norms concentrate on sub-chartering issues.
Registry Office Has Absolute Competence to Register Maritime Contracts
30/09/2009 The notary public and the court official of the Rio de Janeiro Maritime Contracts Registry Office recently filed a lawsuit against the federal government requesting acknowledgement of the fact that the Admiralty Court is not competent to register maritime contracts.
Proposed Bill to Alter Time Limit for Filing Lawsuits against Cargo Loss or Damage
16/09/2009 Legislative Bill 1285/2007 is being considered by Congress. The bill increases the time limit for filing lawsuits against loss or damage of goods carried by waterways to three years. The bill aims to end the conflict between Decree-Law 116/1967 and the Civil Code, which provide for different time limits.
House of Representatives Approves Ratification of Ballast Water Convention
09/09/2009 The Commission of Constitution, Justice and Citizenship of the House of Representatives recently approved Legislative Decree Bill 1053/08 of the Foreign Affairs and National Defence Commission, which ratifies the International Convention for Control and Management of Ballast Water and Sediment from Ships. The convention obliges vessels to submit to ballast water inspections.
Amendments to Convention on Facilitation of International Maritime Traffic Approved
26/08/2009 The Commission of Constitution, Justice and Citizenship of the House of Representatives recently approved Legislative Decree Bill 985/08 of the Foreign Affairs and National Defence Commission, thereby ratifying the adoption of amendments to annexes of the Convention on Facilitation of International Maritime Traffic, which came into force in Brazil in 1977.
Government Publishes Decree to Regulate Actions Related to ISPS Code
15/07/2009 The government recently published Decree 6.869, which sets forth provisions relating to the International Ship and Port Facilities Security Code. The decree includes provisions on the institution of an alarm and control network for ships and port facility protection levels.
Norway
To Lay Up or Not to Lay Up?
30/09/2009 Faced with plummeting freight rates and the possibility of more vessels on hand due to early redeliveries from charterers, many owners have already decided to lay up some of their tonnage. Laying up a vessel is a last resort. All other commercial ways of employing the vessel should be explored before taking such a step.
Norway Considers Signing Rotterdam Rules
16/09/2009 The Ministry of Justice has issued a consultation paper requesting views on whether Norway should sign the Rotterdam Rules at the signature ceremony on September 23 2009. Signing the rules will not oblige Norway to comply with them, since a subsequent ratification will be required. However, a signature will have a symbolic effect, showing that the government supports the adoption of the convention.
Design responsibility in newbuilding contracts: return to 1981 standard the solution?
02/09/2009 In turbulent times it becomes even more necessary to balance properly the liability for design errors between buyers and shipyards. Whether it is time to return to the solution in the 1981 Standard Shipbuilding Contract regarding design liability is something that the industry must decide, but the fact that attention is again being given to the issue of design liability could prompt new regulation on this issue.
State Liability for Failure to Report Shoal
26/08/2009 Five years after the Rocknes ran aground after hitting an unmarked shoal, the claimants filed a lawsuit against the government claiming compensation for losses incurred. The Norwegian First Instance Court heard the case in February and March 2009. The principal issue was the standard of duty of care that was to be applied with respect to the state's liability.
Forced Sale of Vessels: Procedures and Pitfalls
12/08/2009 As a consequence of the challenging times that the shipping industry faces, an increasing number of requests are being made regarding the procedure for arrest and forced sale of vessels. While arrest, or even the threat of arrest, may be a tempting way for a claimant to get the debtor's attention and hopefully receive payment, it may not be equally tempting to embark upon a forced sale procedure to collect the debt.
Obtaining a Ship Arrest
15/07/2009 An arrest is normally obtained to provide security for a claim against the vessel owner, but it is also an effective way to press for a quick settlement of undisputed claims. The fact that vessels constantly change locations and continuously incur debt and liability means that an arrest, or the threat of an arrest, is an important tool for suppliers and other creditors to ensure payment of claims.
Switzerland
Recourse Action for Subrogated Underwriters
16/09/2009 A recent Supreme Court decision has opened the door for subrogated underwriters to take recourse action in international transport relationships. The decision is significant since it limits the longstanding practice established in the Gini/Durlemann Case in cases where the transport is governed by the Convention on the Contract for the International Carriage of Goods by Road.
Limitation of Liability in Sea Carriage Case
27/05/2009 In a recent case a pleasure yacht transported to Gabon by sea suffered major damage during unloading in the port. As the damaged yacht was transported on deck, the Supreme Court held that an exclusion of liability was in line with the Federal Act on Carriage by Sea.
USA
Court Finds Ship Attachment and Arrest Wrongful
26/08/2009 In 2008 the vessel Athena was arrested under Rules B and D of the Supplemental Rules for Admiralty and Maritime Claims. The claimant was involved in a shareholder dispute with the vessel's owner and demanded $15 million for its release. However, the courts found that the claims did not support federal admiralty jurisdiction and that the arrest was wrongful.
Wilful Failure to Pay Maintenance and Cure Warrants Punitive Damages
19/08/2009 In a significant opinion underlining punitive damages as not only an accepted remedy in general maritime law, but now a remedy with a uniform rule, the US Supreme Court held that an injured seaman may recover punitive damages in a claim for wilful failure to pay maintenance and cure.
Cruise Line Escapes $2.8 Million Fine for Passenger Vessel Services Act Breach
12/08/2009 US Customs and Border Protection recently fully mitigated approximately $2.8 million in fines levied against two cruise ships for alleged violations of the Passenger Vessel Services Act. It found that the breaches were not wilful, as the cruises had had to be diverted due to a river closure by the US Coast Guard.
Recovery of Economic Loss Damages in Absence of Damage to Proprietary Interest
29/04/2009 Under US admiralty law, a party may not recover purely economic loss damages in the absence of physical damage to property or damage to property in which the party holds a proprietary interest. However, under the Oil Pollution Act, pure economic loss damages may be recoverable when caused by the discharge or threat of discharge of oil onto the navigable US waters.
Malaysia
Specialized Admiralty Court in the Making
29/07/2009 Various stakeholders are making a concerted effort to pave the way for the formation of a specialized court to hear maritime and admiralty-related disputes. It is hoped that this specialized court will be able to guarantee speed, efficiency and judicial specialization and integrity, and in the process help greatly in further developing and promoting maritime activities in Malaysia.
Government Reviews National Cabotage Policy
29/04/2009 The National Cabotage Policy reserves domestic trade to Malaysian-flagged vessels. However, the policy is not popular - in the past year the East Malaysian states have renewed calls to abolish it, claiming that the exclusionary nature of the policy is to be blamed for high freight rates and high prices in East Malaysia. As a result, the Ministry of Transport has announced an independent study to review the mechanism of the policy.
Arresting Ships in Malaysian Waters to Secure a Claim in Arbitration
28/01/2009 The primary aim of commencing an in rem admiralty action is to obtain security for a maritime claim. Once the respondent’s ship is arrested, it has two options: attempt to set aside the arrest or negotiate security for the claimant’s claim. The question is whether a claimant can arrest a vessel in Malaysia as security for its maritime claim which is to be referred to arbitration.
United Kingdom
Charterparty Liens and Arbitration Agreements
15/07/2009 Many standard time charterparty forms provide that the shipowner is to have a "lien on sub-freights". Often this is expanded to say "and/or sub-hire". Potentially, this provides a shipowner with a useful remedy in the event that its charterer fails to pay hire or other sums due under the charter. Legally and practically, however, this is an increasingly problematic area.
Time Charterers' Right to Revoke Redelivery Notices
08/07/2009 A recent decision concerns the status and effect of a notice of approximate redelivery date and intended port given by a time charterer to an owner. Essentially, the question was whether, subsequent to the giving of an approximate notice of redelivery, the charterers could revise their plans and send the vessel on an additional voyage.
Damages against a Shipbuilder: The Gearbulk Decision
24/06/2009 The Court of Appeal has clarified the exposure of a builder for damages if a shipbuilding contract is terminated by a buyer in circumstances where the builder is in breach. In principle, the right to damages can be excluded or limited by drafting a suitable term in the contract, but the builder would have to get the buyer to agree to very clear words of exclusion.
Remedies for Invalid Detention under Merchant Shipping Act
08/04/2009 A court has held that the Department for Transport was not entitled retrospectively to justify the detention of a cruise ship under health and safety regulations when the inspector did not have the regulations in mind when the notices were issued. However, if the detention had been valid under the regulations or the Merchant Shipping Act, it could not have been invalidated by defects in the form of the notices.
Cargo Insurers' Liability in Tort for Inducing a Breach of Contract
01/04/2009 A recent decision confirms that the courts will not restrain a party to a UK arbitration clause from arresting a vessel in another jurisdiction where the purpose of that arrest is to obtain reasonable security for its claim. However, where a claimant's actions go beyond seeking reasonable security for the UK arbitration, the court will deem this a breach of the English arbitration clause and will restrain such actions.
Interpretation of Claims Time Bar Provision of BPVoy4 Form
25/03/2009 The Commercial Court recently revisited the question of the proper construction of the claims time bar in the BP voyage charter form and arrived at a different decision from that reached in The Sabrewing. The ruling may assist owners that find themselves engaged in a similar argument with charterers in relation to demurrage - although it is not clear how the Commercial Court would decide the point in future on different facts.
Telecommunications
Germany
Legal Protection in Frequency Award Proceedings
23/09/2009 The Federal Administrative Court recently issued a landmark decision with respect to fundamental spectrum management issues. The decision favoured companies seeking legal protection from two Federal Network Agency decisions regarding frequency award proceedings.
Adoption of Frequency Allocation Ordinance Postponed
10/06/2009 Following the postponement of the adoption of the Frequency Allocation Ordinance, it seems clear that the further procedure and timeframe for the award of the frequencies in the 790 megahertz (MHz) to 862 MHz band will not only depend on the adoption of the Frequency Allocation Ordinance by the Federal Council, but will also require solutions to be found to a series of pending technical and legal questions.
Allocation of Digital Dividend Frequencies for Mobile Services Causes Controversy
08/04/2009 The Federal Network Agency has published its guidelines for the allocation of the 790 to 860 megahertz band. The government's controversial adoption of an amendment to the Frequency Allocation Ordinance 2006 enabled the band - previously reserved for broadcasting services - to be allocated to mobile network services. Fears remain that such usage will cause harmful interference.
Court Declares Regulatory Order on IP Bitstream Access Partly Illegal
18/02/2009 The Federal Administrative Court has decided Deutsche Telekom's appeal against a Federal Network Agency order that Deutsche Telekom grant competitors internet protocol bitstream access upon request. The order will enable competitors to offer their own broadband internet access products to consumers instead of merely reselling Deutsche Telekom's digital subscriber line products.
Italy
Quicker and Easier Switching between Fixed-Line Service Providers
02/09/2009 The Communications Authority has approved a revision of the procedure for migrating customers between fixed-line service operators. Migration from an operator other than Telecom Italia can take up to 30 days, but a new resolution will reduce this time to 10 days in all cases by March 2010.
Regulator's Approval for Telecom Italia's Open Access Undertakings
20/05/2009 The review of the regulation on open access to Telecom Italia fixed-network infrastructure has finally reached a conclusion. Among other things, the Communications Authority has accepted Telecom Italia's revised undertakings and has established the New-Generation Network Committee and the Office of Telecommunications Adjudicator, which will play key roles in the new regulatory arrangements.
Switzerland
Federal Supreme Court Not Competent to Hear Appeal on GSM Licence Fees
09/09/2009 In an important recent ruling the Federal Supreme Court held that it was not competent to hear an appeal by Sunrise Communications AG regarding the determination of Global System for Mobile spectrum licence fees. Sunrise had requested that the licence fees be determined in accordance with the fee schedule applicable at the time that the licence was granted.
Sunrise Alleges Swisscom Abuse of Market Dominance
20/05/2009 Sunrise – Switzerland's second largest provider of telecommunications services – has complained to the Competition Commission against Swisscom for abuse of market dominance. Sunrise complained after Swiss Post awarded the contract for broadband services for its post offices and teller machines to Swisscom, despite Swisscom's offer of Sfr20.4 million being far lower than Sunrise's offer of Sfr29.7 million.
Allocation of Mobile Radio Frequencies: ComCom Opens Public Consultation
13/05/2009 On behalf of the Federal Communication Commission, the Federal Office of Communication has opened a public consultation regarding the allocation of mobile radio frequencies which are currently free and those that will become available in 2013 and 2016. Interested parties are invited to file their comments by June 26 2009.
Court Rules on Overseas Call Monitoring
08/04/2009 The state prosecutor ordered a telecommunications service provider to scan its networks for calls to or from a specified number abroad and to relay the content of the traffic to the competent authority in real time. The Federal Administrative Court rejected an appeal by the provider and made clear that a screening order may cover not only a single access number, but also the entire traffic over a provider's network.
New Attempt to Create Modern, Flexible and Efficient Telecommunications Act
11/03/2009 The latest revision of the Telecommunications Act in 2007 introduced, among other things, the unbundling of the local loop. The opinion of some market participants and politicians is that the compromise reached in Parliament is unsatisfactory and insufficiently flexible. Therefore, the Commission for Transport and Telecommunications has sought to invite the Federal Council to issue a report by mid-2010.
Court Confirms that Swisscom Must Offer Regulated-Price Bitstream Access
04/03/2009 The Federal Administrative Court has confirmed a 2007 Communications Commission decision, pursuant to which Swisscom was ordered to offer bitstream access at regulated prices. Swisscom has stated that it has accepted the judgment; however, in regard to ongoing Competition Commission proceedings, it continues to maintain that it has not misused its market dominance.
Taiwan
Chunghwa Telecom to Reduce Internet Protocol Peering Fees
23/09/2009 The National Communications Commission has agreed upon a new rate plan for Internet Protocol peering fees provided by Chunghwa Telecom in order to ease tensions among other internet service providers, including Taiwan Fixed Network. The commission hopes that the savings made by the ISPs due to the reduced peering fees will be passed on to consumers.
Reducing the Digital Divide: Power Line Communication
16/09/2009 The National Communications Commission and Far Eastone Telecommunication (FET) have announced that the first steps have been taken towards reducing the digital divide in certain remote villages by using lines also used for electric power transmission to carry the data needed to provide broadband services. FET will offer free broadband access with speeds of at least two megabits per second to the area until 2011.
Internet Protocol Peering Fees to be Screened Annually
22/07/2009 The National Communications Commission has announced plans to screen the Internet Protocol peering fees annually rather than biennially, in order to settle the dispute regarding the calculation of such fees payable by Taiwan Fixed Network to Chunghwa Telecom.
China Mobile Plans to Acquire 12% Stake in Taiwanese Operator
24/06/2009 Representatives of China and Taiwan have signed a declaration which, among other things, opens the doors to Chinese investment in Taiwan. Just three days later, Far EasTone Telecommunications Limited announced its plans for a strategic cooperation agreement and a share subscription agreement with China Mobile Limited, the world's largest mobile telecommunications operator.
Congress Agrees Bill on Base Station Control Measures
20/05/2009 If a proposed bill to amend the Telecommunications Act is passed in the forthcoming general assembly meeting, not only will existing second and third-generation operators be threatened with the removal of their base stations, but the would-be operators of Worldwide Interoperability for Microwave Access will be left with nowhere to construct their base stations.
Mobile Telecommunication Firms Ordered to Float Shares
13/05/2009 The National Communications Commission has approved the Procedure on Public Offerings of Mobile Operators. Mobile operators (including third-generation mobile operators) and 1900 megahertz digital low-tier cordless telephone operators are required to comply with certain measures in order to allow for the supervision of their financial management.
Bermuda
Why Can't I Have Just One Bill?
20/05/2009 Frustrated consumers often blame service providers for their inability to offer bundled telephone, cable television and internet services, but it is actually the legislative framework that keeps the services separate. The minister has stated that imminent reform will benefit consumers by providing them with more service options, competitive pricing and licensees offering the latest telecommunications technology available.
Brazil
Mobile Phone Carriers Face Massive Penalties for Call Centre Failures
09/09/2009 On the basis of Decree 6523/08, which determined that public service provider companies should create customer service centres, mobile service carriers are facing a series of multimillion-real actions for damages filed by the Public Ministry and consumer protection agencies on the grounds of failures in the services provided to their customers via the customer service centres.
ANATEL Regulates Broadband over Power Line Systems
20/05/2009 The National Telecommunications Agency recently published Resolution 527, which approves the Regulation on the Conditions of Use of Radio Frequency by Broadband over Power Line (BPL) Systems. The new regulation establishes the criteria and technical parameters for the use of this technology to ensure that BPL systems do not cause harmful interference to other services.
Consumer Protection Agency Questions Changes to Universal Service Target
11/03/2009 Through Decree 6424/08 the Executive Branch authorized an amendment to the general plan on universal service for the fixed switch telephone service. The change to the rule has led to a consumer protection body questioning its legality. The courts have suspended the change to obligations under the general plan on universal service until the merits of the case can be decided.
Terms for Authorizing MMDS Made Available for Public Comment
18/02/2009 The National Telecommunications Agency recently made the new terms for multichannel multipoint distribution service (MMDS) authorizations available for public comment. The terms state that the authorization to provide an MMDS service is for an open-ended period, but the right to use the associated radio frequencies will expire in 2024 and cannot be extended.
India
Lock-In Periods Reintroduced for Telecommunications Operators
02/09/2009 When unified access service (UAS) licences were introduced they permitted licensee companies to provide fixed-line services, as well as cellular services, under the same licence. Unlike existing cellular licences, UAS licences imposed no lock-in restrictions on promoters. However, the Department of Telecommunications recently issued a notification amending UAS licences and introducing such a lock-in condition.
Value-Added Services Outlined
11/03/2009 Traditionally, the telecommunications service has essentially been considered a voice service. However, in the modern world telecommunications operators are now providing increasing varieties of value-added service (VAS). This increase in VAS has raised new challenges for the existing legal regime governing the telecommunications sector.
Mexico
Ministry of Communications Prepares for Spectrum and Dark Fibre Auctions
10/06/2009 The Ministry of Communications has announced that it has finalized the conditions for the auction of spectrum in the 1.7 gigahertz (GHz) and 1.9 GHz bands for mobile telephony and internet access. The ministry is also preparing the terms on which the Federal Electricity Commission will auction a segment of its dark fibre.
Regulator Confirms Interconnection and Interoperability Plan
03/06/2009 The Federal Telecommunications Commission has published the Technical Plan for Interconnection and Interoperability in the Official Gazette. The plan sets out the terms and conditions for the regulation and promotion of interconnection and interoperability in the public telecommunications networks.
Greece
Commission Amends Code of Ethics for Provision of Multimedia Information Services
23/09/2009 After carrying out a public consultation, and in view of a large number of consumer complaints, the National Telecommunications and Posts Commission decided to amend the code of ethics for the provision of multimedia information services. The amendment aims to protect consumers more effectively by imposing specific obligations on the providers of multimedia information services.
Commission approves measures governing wholesale access markets
16/09/2009 The National Telecommunications and Posts Commission has issued a decision approving a new set of measures governing the wholesale markets which facilitate the retail market for broadband access to the Internet. The measures cover the markets for wholesale physical unbundled access to network infrastructure at a fixed point.
Public Consultation for Amendment of Regulatory Tools
01/07/2009 The public consultation on the amendment of the Code of Conduct for the Provision of Premium Rate Services recently ended. The amendment was deemed necessary in view of the vast number of consumer complaints to the National Telecommunications and Posts Commission in the last six months in respect of short codes in the 54XXX range.
Commission Fines OTE for Delayed Submission of Cost-Accounting Information
20/05/2009 The National Telecommunications and Post Commission has fined OTE SA €1.5 million for delaying the submission of the 2009 cost-accounting data and information contrary to its legal obligations. Furthermore, it failed to submit the report forms containing the cost-accounting information within the framework of the Long Run Average Incremental Cost pricing model.
Commission Rejects Complaint and Addresses Recommendation to OTE
13/05/2009 In a recent plenary meeting the National Telecommunications and Post Commission rejected a complaint filed by Newsphone Hellas SA against OTE SA regarding the unlawful use by OTE of the short code 131. However, the commission chose to address a recommendation to OTE rather than to impose a fine.
OTE Fined for Delays Delivering Leased Lines to Competitor
06/05/2009 The National Telecommunications and Post Commission has fined OTE SA a total of €7.5 million for infringements of the electronic communications and free competition legislation, resulting in the delayed expansion of broadband into rural areas. OTE also failed to supply leased lines to competitor Hellas On Line within a specific deadline set by a commission decision.
Netherlands
Auction of 2.6 GHz Frequencies Postponed
22/04/2009 The auction of 2.6 gigahertz frequencies will take place in the first quarter of 2010. This is the fourth time that the date of the auction, which was initially set for 2007, has been postponed. The latest postponement is due to the addition of a sixth licence to the auction.
Policy Rules Published on Tariffs for Access to Fibre Networks
14/01/2009 The Independent Post and Telecommunications Authority has published policy rules governing tariffs for access to fibre networks. The policy rules seek to strike a balance between promoting competition and encouraging innovation. They encourage efficient investment in fibre networks so as to allow competitors access to these networks without having to pay an excessive price.
Nigeria
Requirements for Ownership, Operation and Construction of Submarine Cable System
15/07/2009 A recent United Nations Conference on Trade and Development study has revealed that the Nigerian telecommunications market is among the fastest-growing mobile markets in the world, with a 125% average annual growth rate in the number of subscribers and mobile fixed lines. Therefore, there is a continuous pursuit of more cost-effective and reliable telephone and internet services in the telecommunications industry.
Trade & Customs
Singapore
Government Concludes Free Trade Agreement with Gulf Cooperation Council
09/01/2009 Singapore and the Gulf Cooperation Council (GCC) have signed a free trade agreement – the council's first such agreement. Among other provisions, GCC countries will give duty-free access to 99% of tariff items applicable to Singaporean goods, widening Singapore's links with a key commercial market.
European Union
Landmark Success for Chinese Exporter in Anti-dumping Rights Case
23/10/2009 In a landmark judgment, the European Court of Justice has annulled the EU Anti-dumping Regulation insofar as it imposed an anti-dumping duty of 18.1% on exports of ironing boards by Foshan Shunde Yongjian Housewares & Hardware – a Chinese hardware supplier – into the European Union.
New EU Regulation Classifies Multifaceted Devices as Mobile Phones
11/09/2009 A new EU regulation classifies three similar multi-faceted devices under one code for customs purposes. Manufacturers of electronic goods, especially high-tech mobile telephones and other communication devices, must be alert to the new classification as it must be applied uniformly by all 27 customs authorities throughout the European Union.
WTO Panel Holds Second Hearing on Tariff Dispute
28/08/2009 The World Trade Organization (WTO) panel adjudicating the ongoing dispute between the United States, Japan and Taiwan on one side and the European Union on the other over the latter's tariff treatment of certain high-technology products has held a second hearing of the parties. The complainants argue that the EU tariff regime is inconsistent with the WTO Information Technology Agreement.
Anti-dumping Procedures to be Reformed
17/07/2009 The longstanding debate over the reform of the EU trade defence regime is set to be revisited as the European Commission plans to launch a soft reform of its procedures. The plans aim to improve transparency in EU trade defence investigations. However, soft reforms may offer too little to exporting producers in countries such as China and are a far cry from the radical overhaul that was previously envisaged.
European Commission Adopts Fair Trade Communication
12/06/2009 The European Commission has adopted a communication examining the current situation of fair trade and other non-governmental trade-related sustainability assurance schemes. The communication provides an update on developments since 1999 and makes preliminary suggestions regarding the role of public authorities and stakeholders regarding fair trade schemes and other private sustainability assurance schemes.
European Union Delays Compulsory Use of Electronic Customs Declarations
24/04/2009 The European Commission has published new customs-related legislation introducing a transition period for the lodging of electronic summary declarations. The period runs from July 1 2009 to December 31 2010. During this period economic operators will be able to lodge electronic entry and exit summary declarations; this measure should allow operators seamlessly to adjust their systems to the new legal requirements
Belgium
Reimbursement of Para-Fiscal Charges Paid to Finance Incompatible State Aid
03/07/2009 The Brussels Court of Appeal has ruled on action by a number of slaughterhouses and livestock exporters to claim reimbursement from a municipality and the Belgian state for para-fiscal charges which were paid as part of a state aid package that was later annulled by the European Commission. The Supreme Court has also considered questions arising from the scheme.
Germany
State Aid from the Economic Fund
17/07/2009 In order to support manufacturing companies and their employees, the government intends to introduce a special programme under which the German public bank, KfW, will provide loans for projects carried out in Germany. Further funds have been made available for loan guarantees funded by the German federal states and, in certain cases, the central government.
Romania
Two State Aid Schemes Present Funding Opportunities
03/04/2009 Enterprises undertaking major investment projects may be eligible for one of two state aid schemes: one to promote regional development and one to encourage sustainable economic growth. However, a successful application depends on an understanding of the eligibility criteria, the value and timeframe of any financial support and the application procedure.
Mexico
Importers and Manufacturers Consider Changes to Free Trade Agreements
23/10/2009 A notice has been published in connection with various free trade agreements to which Mexico is a party. Manufacturers are invited to submit comments or proposed amendments. A separate consultation has sought comments on the rules of origin under Annex 401 of the North American Free Trade Agreement, focusing on zero-tariff goods or goods that are close to zero-tariff treatment.
Anti-dumping Measures and Temporary Trade Measures
11/09/2009 The past months have seen the announcement of a number of measures to impose, review or eliminate aspects of Mexico's anti-dumping controls. In addition, notice was published of the application of a resolution implementing temporary trade measures on imports from China.
Amendments to Foreign Trade Rules Published
04/09/2009 Amendments to the Foreign Trade Rules have changed the guidelines for inspection visits for Promotion of Manufacturing, Maquiladora and Export programmes and the rule which allows entities that definitively export goods to obtain a general import tax refund for goods exported to the United States or Canada in the condition in which they were imported.
Tax Changes Impose Stringent Documentation Requirements on Exporters
28/08/2009 Recent tax law amendments are intended to prevent simulated export transactions that are aimed merely at obtaining tax benefits. They allow the authorities to presume that goods declared by a taxpayer were sold in Mexico, not exported, unless the taxpayer presents specific documentary evidence to the contrary. This presumption applies even if the exporter has a valid export summary.
New Anti-dumping Measures Announced
26/06/2009 The Mexican authorities have issued a number of notices on anti-dumping issues, including a preliminary determination to conclude the sunset review of anti-dumping duties on imports of garments from China, which eliminates anti-dumping duties and confirms that such goods will be subject to temporary trade remedy measures.
National Standardization Programme and Foreign Trade Rules Published
29/05/2009 The authorities have published the National Standardization Programme and the Ministry of the Economy's 11th and 12th Amendments to the Foreign Trade Rules, which were followed by the Ministry of Finance's announcement of its Foreign Trade Rules for 2009. The government also exempted from foreign trade duties all attempts to help Mexico to combat the influenza outbreak.
Argentina
Anti-dumping Investigations in 2009
22/05/2009 While 11 anti-dumping investigations in total were initiated during 2008, nine have already been started so far in 2009. If this pace is maintained, 2009 will become one of the most active years in Argentine history in relation to the initiation of anti-dumping investigations since 1995 - the year that the World Trade Organization was created.
Canada
Government Tables Text of Canada-Jordan Free Trade Agreement
02/10/2009 The texts of the Canada-Jordan Free Trade Agreement and several parallel agreements were recently presented to Parliament. The agreements will be open for review and debate for 21 sitting days. If brought into force, the free trade agreement will eliminate all non-agricultural tariffs and most agricultural tariffs, in addition to introducing commitments to reduce non-tariff barriers.
Outsourcing for NAFTA Benefits: How Marking Rules Can Remove Duties
26/06/2009 A recent Canadian International Trade Tribunal decision demonstrates the complexity of international trade rules, but also the resulting benefits to those companies that take extra care to work through them in detail. In this case an importer of t-shirts successfully demonstrated that the goods were eligible for duty-free importation into Canada under the North American Free Trade Agreement.
Moving Towards EU-Canada Economic Agreement: Results of Scoping Exercises
12/06/2009 The historic launch of negotiations towards an economic partnership agreement between Canada and the European Union was recently announced. The negotiations will be guided by a joint 'scoping exercise' that culminated in the Joint Report on the EU-Canada Scoping Exercise, which outlines the areas proposed by both parties as subjects for upcoming negotiations.
Canada-EFTA Free Trade Agreement Enters into Force
29/05/2009 Bill C-2, the domestic legislation required to implement the Canada-EFTA Free Trade Agreement, has passed its final reading in the Senate, meaning that the free trade agreement between Canada and the European Free Trade Association (EFTA) will come into effect on July 1 2009. The agreement will open new markets for exporters and alleviate some of the burdens faced by those that import goods from EFTA countries.
Supreme Court Broadens GST Rebate Entitlement
22/05/2009 The Supreme Court of Canada recently released a precedent-setting decision in the first appeal of a goods and services tax (GST) assessment to be heard by Canada's highest court. The decision serves to broaden the number of eligible claimants beyond the person with the 'legal liability' to pay GST in the case of claims for rebate in respect of GST paid in error.
Tariff Ruling in Force Beyond 'Best Before' Date
15/05/2009 A recent decision illustrates a possible strategy available to an importer to delay implementation of a Canada Border Services Agency ruling that will have significant negative implications for its business. The court granted a stay of a revocation of an existing tariff classification ruling, thereby allowing the status quo to continue indefinitely until such time as a challenge to the replacement, negative ruling has been completed.
White Collar Crime
Albania
Changes under New Money-Laundering Law
14/04/2009 The new Law on Prevention of Money Laundering and Financing of Terrorism aims to tackle money laundering and the products that derive from such criminal actions, as well as preventing the financing of terrorism. It meets international standards and creates a framework not only of protection against money laundering, but also for securing, discovering and preventing such activity.
Germany
The Fight on Corruption versus Data Protection and Employment Law: A Balancing Act
28/09/2009 The new Section 32 of the Federal Data Protection Act fails to draw a clear line between what constitutes permissible anti-fraud measures and what is considered impermissible interference with employees' personal rights. At least until a new act is passed on the protection of employee data, the uncertainty surrounding how to ensure the legality of internal investigation and control measures will remain.
Ghana
Anti-money Laundering Law Introduced
01/06/2009 In February 2007 Ghana signed an agreement with the United Nations Office on Drugs and Crime to combat money laundering and the financing of terrorism. In January 2008 Ghana demonstrated its commitment to the global fight against drugs and terrorism by passing the Anti-money Laundering Law – the first of its kind. The act is intended to prevent Ghana from being used as a conduit or haven for stashing ill-gotten gains.
Netherlands
Undeclared Foreign Bank Accounts and VAT Fraud
12/10/2009 The Dutch tax authorities are constantly working on measures against citizens holding undeclared money in foreign bank accounts. An assessment period of up to 12 years may be applied to income generated or held abroad. Recent case law and regulatory approaches suggest taxpayers should act fast to benefit from the existing voluntary disclosure policy.
Anti-money Laundering and Undeclared Wealth
18/05/2009 The Supreme Court recently broadened considerably the scope of the term 'money laundering' by confirming that a failure to declare income or wealth to the tax authorities, even if this originated from a legal source, constitutes money laundering. Meanwhile, there are plans to increase the penalty payments for citizens holding undeclared money in foreign banks from 100% to 300% of the tax due.
Bermuda
New laws combat money laundering and terrorist financing
28/09/2009 Bermuda has longstanding obligations to maintain procedures on anti-money laundering and anti-terrorist financing. The Proceeds of Crime Regulations (Supervision and Enforcement) Act 2008 established a new regulatory regime, designating the Monetary Authority as the supervisory body for securing compliance with the regulations by relevant institutions and detailing the obligations and powers related to this duty.
United Kingdom
First UK Corporate Conviction for Corruption Offences
12/10/2009 The recent Mabey & Johnson Case represents, among other landmarks, the first prosecution brought by the Serious Fraud Office (SFO) in the United Kingdom against a company for corruption overseas. The SFO has heralded the case as a success that paves the way for other companies to self-report, but this is new territory for the SFO and the judiciary, as well as companies and their advisers.
Joint Committee Reports on Draft Bribery Bill
07/09/2009 A parliamentary committee has heard evidence and received submissions on proposed changes to the UK bribery laws. The process revealed support for a corporate bribery offence and the committee has recommended a strict liability offence of negligently failing to prevent bribery. In addition, the Serious Fraud Office has outlined what it considers to be adequate anti-corruption procedures for companies.
SFO Targets More City Fraud Cases: Hedge Funds Top List
10/08/2009 Richard Alderman, the director of the Serious Fraud Office, has published his first annual report to Parliament. He has been accused by some of concentrating too much on consumer crime, but the report reaffirms his commitment to tackling City fraud, with asset-backed securities, insurance, private equity companies and hedge funds identified as prime areas for further inquiry.
Regulators Prepare for Corporate Crimewave
06/07/2009 The credit crunch has produced a climate in which financial crimes, such as fraud and bribery, are more likely to be uncovered. The City of London Police has announced that it is investigating new frauds valued at £1 billion and is gathering intelligence on cases with potential losses of £500 million. More high-profile cases are expected to follow in the City.
Another extradition battle lost
15/06/2009 After a six-year fight, retired businessman Ian Norris has lost what could be his final battle against extradition to the United States. The High Court decision is a reminder of the significant and frightening threat that extradition poses to UK-based directors and officers of corporations with international operations.
Raids and Convictions: Insider Dealing Crackdown Gains Momentum
05/05/2009 Having been criticized for an apparent failure to clamp down on market misconduct, in 2008 the Financial Services Authority began a strategy of increased use of criminal prosecutions. Buoyed by much-needed initial success in its interventions, the FSA is likely to pursue its policy and continue to exercise its extensive criminal powers.
Italy
Fraud and Criminal Liability of Legal Entities
14/09/2009 Legislative Decree 231/2001 aims to allow a criminal judge to impose penalties not only on a natural person convicted for a specific economic offence, but also on the company that employed him or her at the time if it can be shown that the company benefited from the illicit activities.
Banking Secrecy and Financial Crime
06/04/2009 The principle of banking secrecy has long been recognized and protected in Italy. However, it may not be invoked against a writ of attachment issued by the judicial authority in a criminal case against a banking institution. Italian legislation gives the authorities clearly defined powers and prevents banking secrecy from providing an easy shelter for financial crime.
Portugal
Stricter Penalties for Financial Sector
21/09/2009 The international financial crisis has led to a flurry of legislative activity as governments have sought to counteract its effects and prevent future problems. Among other things, Portugal's Law 28/2009 sets higher maximum prison terms for unlicensed taking of deposits, insider trading and market manipulation. It also imposes new anti-fraud rules on granting credit to entities in offshore jurisdictions.
Operation Hurricane: Has Fraud Enforcement Been Blown Off Course?
20/07/2009 In 2005 the Public Prosecutor's Office began investigating suspected tax fraud, illegal appropriation of funds and money laundering by major companies, banks and law firms. It has now sought to suspend criminal proceedings against defendants who have paid their debts, but faces public pressure to bring charges and a judicial view that, in light of the seriousness of the crimes, the process should run its course.
Tougher Penalties to Reinforce Financial Legislation
06/04/2009 The Constitutional Affairs Committee is reviewing four proposals to reinforce the penalties for breaches of financial legislation. Among the ideas under discussion are an increase in the maximum criminal penalty for market abuse or insider trading, a fast-track process for minor breaches and the creation of special court divisions dedicated to financial crimes.
USA
Department of Justice Wins Guilty Verdict against Film Executives
05/10/2009 The Department of Justice announced that film executives Gerald and Patricia Green have been found guilty of conspiracy to violate the Foreign Corrupt Practices Act and US money laundering laws, as well as of substantive violations of the act and money laundering laws. Including guilty pleas, the Greens are the ninth and 10th individuals to have been convicted under the act this year.
SEC Creates Specialized Unit to Tackle Foreign Corrupt Practices
28/09/2009 The director of the Enforcement Division of the Securities and Exchange Commission has announced the creation of a specialized unit to focus on new, proactive approaches to identifying violations of the Foreign Corrupt Practices Act. The change further demonstrates the government's continued emphasis on aggressively identifying and prosecuting violations of the act.
High-Profile Conviction Should Bolster Foreign Corrupt Practices Act Enforcement
24/08/2009 One of the few Foreign Corrupt Practices Act cases to have gone to trial ended recently with the jury's conviction of the defendant. The decision was a significant victory for the government in a high-profile case and will likely further embolden the Department of Justice in its already significant Foreign Corrupt Practices Act enforcement efforts.
Income Tax Guidance for Ponzi Scheme Victims
27/07/2009 The US Internal Revenue Service recently issued important guidance with respect to the US federal income tax treatment of losses sustained by US taxpayers who are victims of Ponzi schemes. Several states have since issued their own guidance for reporting Ponzi scheme losses under their respective state income tax regimes.
Foreign Corruption Trends: More International Cooperation and Forfeiture Actions?
01/06/2009 The Department of Justice has filed a forfeiture action to recover nearly $3 million held in three Singaporean bank accounts, which is alleged to be the proceeds of a conspiracy to pay various Bangladeshi government officials and their family members in connection with certain public works projects. This action represents yet another effort by the government to step up enforcement of the Foreign Corrupt Practices Act.
Restitution Orders: Summary of Applicable Standards
05/01/2009 The legal tests for identifying victims' entitlement to restitution, losses that may be included in a restitution calculation and victims' costs that are recoverable through a restitution order can be confusing. This update outlines the provisions of the Mandatory Victims' Restitution Act and examines the legal tests for determining the proper scope of a restitution order.
