Part-time and flexible working arrangements are a fundamental part of workforces in western jurisdictions and serve as a significant incentive that employers can use to recruit and retain their talented employees. While these arrangements are not currently offered by many employers in the United Arab Emirates, this may be about to change in light of a significant statutory development. This development is a win-win for all parties, and businesses should consider creating roles for part-time employees.
There is a huge amount of uncertainty and misunderstanding surrounding the legal approach to redundancies and restructures in the United Arab Emirates. Redundancies were particularly prevalent during the 2008-2009 crash and the more recent oil price slump in 2015-2016. During those periods, many UAE employers received judgments against their businesses after they failed to understand or comply with the legal position and expectations of the local courts when undertaking internal processes.
The Abu Dhabi Global Market (ADGM) has announced the establishment of the ADGM Arbitration Centre, which will include the Middle East and North Africa representative office of the International Chamber of Commerce International Court of Arbitration. The centre is forecast to be fully operational by January 2018. This marks an important development for arbitration in the region and provides users of arbitration in the Middle East with greater choice.
As a result of the economy experiencing an upswing over the past year, there was an increase in transactions and deal values in the first half of 2017. Further, because the United Arab Emirates put its plans to diversify its economy away from a dependency on oil into action, M&A activity outside the oil sector has been bolstered. In particular, there has been growth in the healthcare, education and retail sectors.
Decree 19/2016 established a judicial committee tasked with resolving conflicts of jurisdiction between the Dubai courts and the Dubai International Finance Centre (DIFC) courts. Just over six months after the issuance of Decree 19/2016, the committee rendered its first decisions, which have made it clear that an arbitral award rendered onshore in Dubai cannot be enforced in the DIFC courts where proceedings in respect of the same award have been commenced before the Dubai courts.
The Ministry of Economy recently issued Ministerial Resolution 694/2016, which waives the requirement for limited liability companies, joint liability companies and limited partnerships to amend their memoranda of association, as per the new Companies Law. That said, it is advisable for exempt companies to amend their memoranda of association in due course for ease of reference.
Clients often ask how to conduct legal due diligence or background checks on another party in the United Arab Emirates. Unfortunately, there is no straightforward answer. With no centralised company register, and over 40 different free zones, obtaining basic information about UAE free zone companies may pose a daunting challenge. Even so, there are still effective tools available to uncover the necessary information.
The competition law regime established by Federal Law 4/2012 and Resolution 37/2014 has been criticised – in particular, for being ambiguous in relation to merger control, making the law unenforceable in practice. Most notably, the regime lacked defined thresholds for the application of merger control provisions. These issues were recently addressed through two cabinet resolutions. However, considerable ambiguity remains in the interpretation and application of the UAE competition law regime.
The much-awaited new bankruptcy law in the United Arab Emirates is a complete legal framework designed to help financially troubled companies to avoid collapse. The new law recently took effect after being decreed by President Sheikh Khalifa. It is part of the global wave of insolvency reform referred to as the 'rescue culture' and has been warmly received by local and international stakeholders.
A recent unexpected change to the Penal Code which criminalises arbitrators' and experts' violations of their duties of integrity and impartiality has stunned the arbitration community. While steps are underway to lobby the UAE government to repeal or amend the new Article 257, it has cast a shadow over the significant efforts in recent years to promote the United Arab Emirates as a regional hub for resolving disputes.
Investors seeking to acquire an enterprise must consider the liability arising from a multitude of legal engagements. While the nature and complexity of existing contracts that should be reviewed in legal due diligence may differ considerably depending on the area of business in which the target is engaged, employment relationships will be a significant factor in most corporate transactions. As such, recent amendments to the employment regime are highly relevant to M&A transactions.
International business companies incorporated or proposed to be incorporated in Ras Al Khaimah must note the recent establishment of the Ras Al Khaimah International Corporate Centre which, going forward, will be the sole authority responsible for the incorporation of international business companies. While the existing advantages of incorporating an offshore company in the United Arab Emirates remain, the system is now more flexible and simplified in terms of bureaucracy.
A recent ministerial resolution has sought to clarify some of the ambiguities and uncertainty surrounding the applicability of the Companies Law to limited liability companies (LLCs). While the resolution does not pinpoint the applicability of each joint stock company (JSC) provision to LLCs, it includes a catch-all clause stating that JSC provisions which contradict the nature of LLCs will not apply to LLCs.
Established in 2013, the Abu Dhabi Global Market (ADGM) has taken steps to put itself on the arbitration map through the enactment of the ADGM Arbitration Regulations 2015. Although largely based on the United Nations Commission on International Trade Law Model Law, the regulations contain a number of modifications and enhancements, including in relation to confidentiality and privacy, the right to object and rules for the appointment of arbitrators.
In the wake of the OW Bunker insolvency in late 2014, shipowners have found themselves at risk of double payment demands and numerous vessels have been arrested, forcing shipowners to pay physical suppliers even if they had already paid. A recent judgment has now accepted an appeal by the owners based on the principle of relativity of contracts. However, it is unclear what the decision will mean for future arrest applications.
The new Commercial Companies Law has finally come into force. Companies incorporated and operating under the old law have only a few months left to comply with the new law. As companies that fail to comply will be considered dissolved, it is paramount that they review the new law, its provisions and obligations and amend their memorandum of associations and articles of associations accordingly within the stipulated timeframe.
The Dubai International Financial Centre (DIFC)-London Court of International Arbitration (LCIA) has announced a relaunch of the centre. Through the relaunch, the DIFC-LCIA has introduced a new and improved version of its product: the arbitration centre will now be headed by a registrar located in the DIFC and, in due course, will operate under revised DIFC-specific rules.
In September 2015 the Trademark Office beta tested its new online system by allowing several trademark agents to file a limited number of trademark applications and renewals. In addition, the Dubai Department of Economic Development recently seized a record haul of counterfeit goods over a 26-hour period. Body
The Dubai International Financial Centre (DIFC) courts have undergone significant developments in 2015, including expanding the reach of DIFC court judgments, responding to the needs of different nationalities in relation to wills and probate (eg, allowing non-Muslims to register a will under common law), expanding the jurisdiction of the Small Claims Tribunal and spearheading the conversion of money judgments to arbitral awards.
Recent decisions have confirmed the Dubai International Finance Centre's (DIFC) jurisdiction to recognise and enforce both foreign and domestic onshore arbitral awards, irrespective of any connection to or assets in the DIFC. These judgments open the door to award creditors seeking to use the DIFC courts as a conduit jurisdiction so that DIFC orders can be enforced in onshore Dubai, thereby circumventing the Dubai courts' ratification procedures.