Samer Abou Said

Samer Abou Said

Most Significant Amendments to the UAE Civil Procedures Law Adopted on 29 August 2021

By Samer Abou Said

06 September 2021

Notification through the Court’s website

This amendment allows the Court to take the decision to notify a litigant, whether an individual or a company, if not found on their address and under certain conditions, through the Court website. This new amendment will facilitate notification and, depending on how access will be organized, it could form a valuable means to look up cases by names of defendants or plaintiffs which is only available currently through a POA. Finding out names of litigants will increase transparency and enhance due diligence for concerned parties.

One-day-court for claims up to AED 1,000,000

The amendment raised the value of claims that could be resolved before the one-day-court from AED 500,000 to AED 1,000,000. The hearing should take place within 15 days of finalizing the registration of the case.

 Three levels of litigation in one court or the “Special Courts” or “C3 Courts”

Finally, after several reports during the past years, the legislator introduced the articles regarding the setup of the “Special Courts” which merge the three levels of litigation into one court composed of three judges who attend pleadings simultaneously, so that there is a judge from each degree of litigation (first instance – appeal – cassation), where lawsuits are heard by three judges. News coverage have previously referred to the concept of those courts as the C3 Courts.

Jurisdiction of the Special Courts

The amendment provides that the Special Courts have jurisdiction to resolve civil, real estate, commercial and estate disputes, subject to a minimum value of AED 500,000, which are determined by the justice minister or the head of judiciary in the respective Emirate, or pursuant to the parties’ agreement to opt into its jurisdiction. The following is excluded from the jurisdiction of the Special Courts:

  • criminal, administrative and labour matters.
  • personal status matters except for estate.
  • Orders, temporary applications and urgent matters which are filed originally before the court of first instance.
  • Lawsuits that are registered before the Special Courts commence its work.

The first hearing should take place within 30 days of finalizing the registration of the lawsuit. However, there is no provision on the term within which the judgment or order of the Special Courts should be issued.

Judgments and orders of the Special Courts are final, immediately enforceable, not appealable and subject to Re-trial in accordance with Article 169 of the Civil Procedures Law or if the notification of the statement of claim is considered null.

Recourse against judgments and orders of the Special Courts

As an exception to the irrevocable nature of the judgments and orders of the Special Courts, the legislator stipulated that the Special Courts can, sitting in-camera, revoke its judgment on its own or pursuant to a demand by the judgment obligor in any of the three following circumstances:

  1. If the Special Court or any its supplementary departments commit a procedural mistake which impact the findings of the judgment or order.
  • If the judgment or order relied on an abolished law provided that the application of the law in force will change the findings of the judgment or order.
  • If the judgment or order violates any of the judicial principles decided by the general assembly of the Special Court, or if it violates the previous principles of the Special Court or those principles issued by the Committee for Unification of Principles between Local and Federal Judicial Authorities.

Conclusion

The introduced changes appear to be geared towards expediting the resolution of disputes and present a very innovative way of settling the disputes before the Special Courts which combine the three levels of litigation in one court and one hearing. 

It remains to be seen when the Special Courts will see the light of the day. Some might be disappointed that the amendment does not put a time limit for issuance of the judgments or orders before the Special Courts, however, given the novelty of the proceedings, the decision of the legislator appears to be carefully considered.

The UAE legislator asserts again their courage to adopt once more innovate ideas that sets global trends and encourages others to follow suit.   

Should you wish to learn more about the new amendment please get in touch with our lawyer Samer Abou Said.

“Contents of this article are for general informational purposes only. It is not intended as professional counsel and should not be used as such.”

Similar Posts

أهم التعديلات التي طالت التعامل بالشيكات في دولة الإمارات العربية المتحدة

By Samer Abou Said


:نظرة سريعة على الشيك كوسيلة سداد تعطي الدائن ضمانات هامة

شكلت الشيكات إحدى ركائز التعامل التجاري في دولة الإمارات ولا تزال نظرا للحماية القانونية التي خصصها بها المشرع الإماراتي. فبالإضافة الى أن ساحب الشيك يكون مسؤولا مدنيا عن الوفاء بقيمة الشيك، هناك عقوبات جزائية مثل الحبس والغرامة التي يمكن أن تنزل بالموقع على الشيك في حال إرتجاع الشيك سواءً لعدم وجود رصيد كافٍ أو لأي سبب آخر سندا للمادة 401 من قانون العقوبات الإماراتي التي تطلّبت أن يكون إصدار الشيك بسوء نية، وقد درجت المحاكم على إعتبار أن كل إصدار لشيك دون رصيد يتصف بسوء النية دون الحاجة للتثبت من وجود سوء النية. وهذه العقوبات تطال الموقع على الشيك أيضا في حالة التوقيع على الشيك بالنيابة عن الساحب كأن يوقع مدير الشركة بالنيابة عنها على شيك لسداد مستحقات على الشركة
فضلا عن ذلك، فإن الموقع على الشيك بالنيابة عن الشركة كالمدير مثلا يكون مسؤولا في أمواله الشخصية عن الوفاء بقيمة الشيك سندا للمادة 599 من قانون المعاملات التجارية الإماراتي. وإن العقوبات والمسؤولية تطالب ساحب الشيك والموقع ليس فقط في حال إرتداد الشيك لعدم كفاية الرصيد، إنما أيضا في حالة إقفال الحساب أو تسليم شيك مع تعمد تغيير الإمضاء لمنع صرفه. وإن المسؤولية المالية عن سداد قيمة الشيك، تسمح للدائين أو المستفيد من الشيك من إصدار أمر بمنع من السفر بحق الموقع على الشيك لمنعه من مغاردة الدولة
ومؤخرا قام المشرع الإماراتي بتخفيف العقوبات الجزائية المتعلقة بالشيكات المرتجعة بحيث ألغى عقوبة الحبس فيما يتعلق بالشيكات التي تساوي أو تقل عن مائتي ألف درهم (200,000) درهم، فيما إحتفظ بعقوبة الغرامات المالية. والجدير بالذكر هنا أن الكثير من الدول الغربية ألغت من قوانينها العقوبات الجزائية على الأشخاص فيما يتعلق بالدين الناشىء عن إلتزام تجاري أو مدني

وقد أدت هذه الضمانات للمستفيد من الشيك في ملاحقة الموقع على الشيك جزائيا داخل دولة الإمارات العربية المتحدة الى جعل الشيك وسيلة سداد لها قيمة تقارب الدفع بالنقود، فبات الدائنون يعتمدونها في الدفعات مع الأجل، وصارت تغنيهم في بعض الأحيان عن ممارسة واجبهم بالتحقق من ملاءة أو صدقية من يتعاقدون معهم

أهم التعديلات على التعامل بالشيكات التي أدخلها المشرع الإماراتي في العام 2020

بتاريخ 27 سبتمبر 2020 صدر القانون بمرسوم إتحادي رقم 14 لسنة 2020 بتعديل بعض أحكام قانون المعاملات التجارية الذي أدخل تعديلات هامة على التعامل بالشيكات تماشيا مع الإتجاه المستمر في تطوير الإقتصاد الإماراتي، بحيث حافظت تلك التعديلات على مكانة الشيك كوسيلة للوفاء وعدلت العقوبات بجعلها عادلة أكثر وتساعد في ترسيخ الثقة بإستعمال الشيك والتعامل التجاري كما نشرح أدناه. ونلفت نظر القارىء أن التعديلات المشار إليها فيما يلي تدخل حيز التطبيق إبتداءا من 2 يناير 2022. ورغم المسافة الزمنية بين القانون وتاريخ تطبيق التعديلات، إلا أنه على التجار والشركات أخذ الحيطة فيما يتعلق بالشيكات التي لها تاريخ إستحقاق لاحق لـ2 يناير 2022 ودراسة موقفهم القانوني ليبنى على الشيء مقتضاه

إلغاء جريمة إصدار شيك دون رصيد: ألغى المشرع الإماراتي المواد 401 و402 و403 من قانون العقوبات الإماراتي التي تتناول جريمة الشيك دون رصيد، وفرّق بين فعل إرتداد الشيك دون رصيد الذي أزال عنه صفة الجريمة، وإرتداد الشيك بسبب قيام الساحب بسحب قيمة الشيك أو إقفال الحساب بعد إصدار الشيك أو تعمد توقيعه بطريقة تمنع صرفه حيث تم الإبقاء على العقوبات الجزائية مع تعديلها. وإن إزالة الصفة الجرمية عن إرتداد الشيك دون رصيد في الحالة الواردة أعلاه لا يخل بمسؤولية الساحب المدنية أو وكيل الساحب الذي يوقع على الشيك لمصلحة غيره سندا للمادة 599 من قانون المعاملات التجارية

عقوبات بديلة تتعلق بالشيكات المرتجعة: تعاقب المادة الجديدة 641 (1 مكرر) بالحبس مدة لا تقل عن ستة أشهر ولا تزيد على سنتين، وبالغرامة التي لا تقل عن (10%) من قيمة الشيك وبحد أدنى مبلغ (5,000) درهم، ولا تزيد على ضعف قيمة الشيك، أو بإحدى هاتين العقوبتين، كل من يرتكب أحد الأفعال التالية:

أمر المصرف قبل تاريخ السحب بعدم صرف الشيك إلا في حال ضياع الشيك أو إفلاس حامله.أقفل الحساب أو سحب كل الرصيد الموجود فيه قبل إصدار الشيك أو قبل تقديمه للمسحوب عليه للسحب، أو كان الحساب مجمدا.

تعمد تحرير الشيك أو توقيعه بصورة تمنع من صرفه.

إذا يظهر أن المشرع لم يلغ العقوبات بالكامل إنما قام فقط بإلغاء عقوبة سحب شيك دون رصيد التي لا تتصف بسوء النية. وبالتالي، فإن العقوبات الجزائية عدلت وأصبحت تطال فقط الساحب الذي يتصرف بسوء نية كأن يقوم بسحب قيمة الشيك بعد إعطائه للمستفيد، أو كان يقفل الحساب أو يتعمد تحرير الشيك بطريقة تمنع من صرفه، وهذه أفعال لا يجب أن تكون جزءا من أعمال التجارة المشروعة. ويلاحظ أيضا أن العقوبة المالية تم تشديدها تماشيا مع قيمة الشيك بحيث أنها لا تقل عن 10% من قيمة الشيك ولا تزيد على ضعفي قيمة الشيك. وهذا يعطي للمحكمة التي تنظر في القضية صلاحية تطبيق الغرامة المالية التي تراها متناسبة مع الفعل المرتكب. وتمنح المادة 643 (مكرر 2) الجديدة المحكمة الحق بحظر المحكوم عليه من ممارسة نشاط تجاري أو مهني لمدة تصل الى ثلاثة سنوات في حال إرتكب الفعل خلال ممارسة النشاط

إرتكاب إحدى جرائم الشيكات لمصلحة الشخص الإعتباري (كشركة مثلا): نصت المادة 644 مكررا (1) أنه في الأحوال التي ترتكب فيها إحدى الجرائم المنصوص عليها في هذا الفصل، بإسم ولحساب الشخص الإعتباري، لا يعاقب المسؤول عن الإدارة الفعلية إلا إذا ثبت علمه بالجريمة أو إرتكبها تحقيقا لمصلحة نفسه أو غيره. ومؤدى ذلك أن مدير الشركة لا يسأل عن الفعل إلا في حال ثبت علمه فيها أو إرتكبها بنفسه. ويشير نص المادة إلا أنه على جهة الإدعاء إثبات علم المدير أو تحقق مصلحته من الجريمة
وقد شُددت الغرامات على الشخص الإعتباري بحيث يعاقب في حال ثبتت مسؤوليته بمثلي الغرامة المقررة للجريمة أي لا تقل عن 20% من قيمة الشيك ولا تجاوز خمسة أمثاله

إعتبار الشيك سندا تنفيذيا: نصت المادة 632 مكررا الجديدة على أن يعدّ الشيك المثبت عليه من المسحوب عليه أي المصرف بعدم وجود رصيد له أو عدم كفايته سندا تنفيذيا ولحامله طلب تنفيذه كليا أو جزئيا، جبرا. وهذا يعد تعديل هام يسرع إجراءات التنفيذ والتحصيل المعمول به سابقا حيث أنه كان يتطلب تكليف ساحب الشيك بالوفاء عن طريق البريد المسجل خلال خمسة أيام عمل، يمكن للمستفيد عند إنتهاء المهلة تقديم عريضة للإستحصال على أمر أداء، وعند صدور أمر الأداء يصار الى التنفيذ. وتستهلك هذه الإجراءات وقتا لا يستهان به قد يزيد عن الشهرين ويصل الى عدة أشهر في حال لم يكن للساحب عنوان معلوم إذ يتوجب إلإستعلام عن عنوانه من الجهات المختصة وإجراء النشر في الجريدة
وجوب وفاء المصرف بقيمة الشيك جزئيا: ألزمت المادة 617 الجديدة المصرف بالوفاء الجزئي لقيمة الشيك بالقدر الموجود لديه مع التأشير بالوفاء الجزئي على الشيك إلا في حال رفض المستفيد ذلك. ويعيد المصرف اصل الشيك الى المستفيد لإستعماله إذا شاء في المحكمة أو لإعادة تقديمه مرة أخرى في حال توفر رصيد قيمة الشيك. وهذا تطور هام حيث أن المصارف كانت تفسر نص المادة 617 القديمة بأنها تعطيها الحق برفض الصرف الجزئي للشيك، حيث كان يؤدي ذلك الى عدم قدرة المستفيد على إستلام الأموال الموجودة في المصرف في حال كانت تقل عن قيمة الشيك، وكان عليه رفع الدعوى للمطالبة بكامل المبلغ وتكبد مصاريف قانونية أكبر عن كامل قيمة الشيك والتأخر في تحصيل أمواله. وقد ألزمت هذا المادة المصرف المسحوب عليه أن يخطر المصرف المركزي في حال رجوع الشيك لعدم كفاية الرصيد كليا أو جزئيا أو في حال إسترداد الساحب للرصيد بعد إصداره الشيك. ويبدو أن هذا الإجراء يهدف الى تسجيل المخالفات التي يقوم بها الساحب بغرض مراقبة ملاءته أو منعه لاحقا من الإستفادة من التعامل بالشيكات وفقا لتعليمات المصرف المركزي

الخلاصة

يظهر إستعراضنا أعلاه للتعديلات التي طالت التعامل بالشيكات أن المشرع الإماراتي أزال صفة الجريمة عن الشيك دون رصيد في حالة واحدة فقط في خطوة تعزز إنسانية وذكاء العقوبات لتطال فقط جرائم الشيك الأخرى التي تتصف بسوء النية التي تم رفع قيمة الغرامات المالية على مرتكبيها لردعهم. وتم تسريع إجراءات التنفيذ الجبري على أموال ساحب الشيك. بالخلاصة، تبدو التعديلات الجديدة وأنها جاءت إستجابة للتطور في التعامل التجاري الحاصل، حيث أنها سترسخ الشيك كوسيلة وفاء تحظى بحماية المشرع في حال سوء إستخدامها. وإن المتعاملين بالشيك مدعوون الى إعادة تقييم موقفهم القانوني على ضوء تلك التعديلات لإتخاذ الإجراءات اللازمة لحماية مصالحهم
لطفا التواصل مع المستشار القانوني سامر أبو سعيد في حال الحاجة لمزيد من المعلومات أو المشورة القانونية التي تتعلق بالموضوع الوارد أعلاه

“إن المعلومات الواردة أعلاه هي على سبيل الإسترشاد ولا تشكل ولا يجب إعتمادها كإستشارة قانونية”  

Similar Posts

Gender Pay Gap: She Deserves The Same

By Samer Abou Said and Minal Naseem – The Firm

Introduction
In the words of the Late H.H. Sheikh Zayed bin Sultan Al Nahyan, “Nothing pleases me more than seeing a woman take on her distinguished role in society, and nothing should hinder her progress.” In 2015, in line with this objective, the UAE Gender Balance Council was established to further develop and implement gender balance in the UAE. Since then, the UAE has taken significant steps to promote gender equality by enforcing equal wages and salaries for men and women in the public and the private sector.

Equal pay for governmental sector
Federal Law No 27 of 2018 concerning gender wage equality in the public sector provides that federal government bodies should not discriminate between the wages of employees working in the same position based on their gender. The law recognized that salaries may vary depending on other factors such as the knowledge, skills or experience of the employees.

Equal pay for private sector
Recently, article 32 of Federal Law No. 8 of 1980 was amended by Federal Decree No. 6 of 2020 (“Labour Law”) to provide that a “female worker shall be granted a wage equal to that of the male worker should she be performing the same work, or another one of equal value.”

We discuss below the impact of Article 32 and the challenges for its enforcement.

The Government: guidance and requirements
Article 32 further provides that “by virtue of a Cabinet Decision – based on the proposal of the Minister of Human Resources and Emiratisation – the procedures, controls and standards necessary to evaluate the work of equal value” will be developed. This indicates that the Government will be working alongside the Ministry of Human Resources and Emiratisation (“MOHRE”) to issue a well-rounded guidance and monitoring system to ensure that businesses are complying with Article 32 and that employees are aware of their rights and the procedures to follow should their employers fail to conform with the requirement of this Law.

So far MOHRE has not issued any instructions or guidance on the application of Article 32. Therefore, in the interim, it would be up to the UAE Courts to determine how damage and loss to the employee would be calculated, what remedies would be granted to the employee and what penalties would be imposed on the employer, if any.

It should be noted that Article 181 of the Labour Law provides that whoever breaches any imperative provision of this Law or its relating regulations or decisions shall be sentenced to imprisonment and a minimum fine of AED 10,000. Although this Article is not commonly used, It appears that it might be applicable to any employer in breach of Article 32 which is considered binding until and unless the Government issues any specific penalties for breaching Article 32.

Employees: How to determine whether you are receiving equal pay or not?
At present, many workplaces do not have a culture of openly discussing or sharing information on salaries. Thus, it would be challenging for an employee to ascertain whether she is receiving equal pay in comparison to her male counterparts.
The two obvious routes to obtain an answer to that question would be to either ask her employer or male colleagues in the same or similar position. However, often such conversations are considered intrusive and may be uncomfortable. In this regard, equal pay activists believe that secrecy around salaries makes it difficult for employees to learn about salary disparities. It will be interesting to see how the Government will address this issue and create a means for female employees to gauge whether they are receiving an equal pay or not.
In organisations where only females are hired for certain roles or where there is no male counterpart in a certain role, it would not be easy to verify whether the female employee is receiving an equal pay. However, per the wording of Article 32, the fact that an employee’s salary should be compared to that of a male conducting work of equal value, does not necessitate that the male be working for the same employer.

Employers: Does the change create an obligation to disclose salaries?
It is uncertain at this stage whether the Government would require Employers to take any steps to disclose the job descriptions and relating salaries (or salary grades) of their employees internally or externally to MOHRE. While MOHRE can monitor the salaries of a company’s employees through the Wage Protection System (“WPS”), the current WPS system does not indicate whether the wages relate to the level of seniority or work performed.
Nevertheless, it is clear going forward that some form of disclosure will be required, either to the employees or to MOHRE, in order to ensure compliance with Article 32 of the Labour Law. Such disclosure could be based on the size of the company as a starting point with bigger companies being the first to apply disclosure requirements.

Comparison: Equal pay laws in the United Kingdom
Various countries have implemented equal pay laws, and while they have not successfully eradicated unequal pay, they show that stringent monitoring measures must be put in place to ensure that businesses abide by the regulations and implement an equal pay policy.
In the UK, equal pay was enforced in 1970 and the current Equality Act 2010, like Article 32 of the Labour Law, gives women and men the right to equal pay for similar work. The Advisory, Conciliation and Arbitration Service (ACAS) provides some guidelines for employers to reduce the risk of unequal pay, which includes:

  • Have an equal pay policy
  • Have up to date job descriptions that accurately describe work staff do
  • Ensure that men and women who do the same work do not have different job titles
  • Be consistent and have a single pay structure
  • Conduct an equal pay review or audit depending on the size of the company

ACAS also encourages companies to conduct a company-wide or department specific equal pay audit (or review) to check for equal pay issues. The companies are required to share the results of the audit with the employees who were included in the audit. Furthermore, employers with 250 or more employees must publish and report specific figures about their gender pay gap.

How to approach implementation of Article 32?
It would be reasonable to assume at this stage that a guidance will follow, which would lay out the steps that companies should adopt to ensure equal pay among their staff at the same seniority level and the process for employees’ grievance should they think they are receiving an unequal salary.

One beneficial solution for employers to show compliance with the law would be to issue salary grades internally so that employees would be well informed about whether their salary falls within the bracket allocated to their seniority and level of work.

Best practices in other jurisdictions provide useful guidance for employees who feel they may not be receiving equal pay. As a preliminary step, employees are encouraged to resolve the issue by having informal discussions with the employer. If no acceptable solution is reached, the employees have the option to raise a formal grievance with the employer and if not resolved, a complaint can be filed with the competent court. The employee filing the complaint would have to prove that they are at a disadvantage in comparison to their male colleague who does equal work. Until the Government issues a guidance on how to remedy an unequal pay claim, UAE female employees might benefit from following a similar approach as stated above.

Conclusion
Studies show that equal pay laws have not entirely eradicated gender pay gap, but such laws have had a great impact in reducing it.

The World Economic Forum’s 2020 Global Gender Gap report ranked the UAE as a leading country with regards to gender equality in the region. The introduction of Article 32 is a very positive development which will undoubtedly reflect the growth mindset of the country.


“Contents of this article are for general informational purposes only. It is not intended as professional counsel and should not be used as such.”

Similar Posts
debt

Creditors of Drake and Scull International PJSC Are Invited to Lodge Their Claims Against the Company

By Samer Abou Said

Introduction
It was announced that Drake and Scull International PJSC (“DSI”) made an application pursuant to Federal Decree Law No. (9) of 2016 on Bankruptcy for its financial reorganization process to be conducted under the supervision of the Financial Reorganization Committee (the FRC) which has accepted DSI’s request.

Companies falling under DSI
Pursuant to the announcement addressed to creditors, the following companies are considered part of DSI group, and thus creditors of those companies are concerned with this announcement:
–        Drake and Scull International PJSC;
–        Drake & Scull International LLC;
–        Drake & Scull for Contracting Oil & Gas Fields Facilities LLC;
–        Drake & Scull Engineering LLC (formerly Drake & Scull Water and Power LLC) (each a Company and together the Companies)

Once the reorganization plan is approved, Creditors of DSI group would be invited to vote on the plan after having the opportunity to review it.

Lodging of claims and participation in voting on the reorganization plan
In order to participate in the voting process, each creditor must lodge with the FRC appointed expert by no later than 28 September 2020 a proof of its claim(s) (as at 30 June 2020) together with any available documents which support such claim(s). In the event that any such claim is disputed by the relevant Company, that Company may request that the creditor submit additional documentation supporting the relevant claim (which may be required to include documentation approved by a reputable auditor).

Should you wish to learn more about the restructuring process or if you need assistance with lodging your claim or lodging an objection to the decision of the appointed expert of the FRC regarding your claim please get in touch with our lawyer Samer Abou Said.


“Contents of this article are for general informational purposes only. It is not intended as professional counsel and should not be used as such.”

Similar Posts

Employers’ and Employees’ Rights and Obligations under Resolution 279/2020 of the MOHRE

By Imad Kassir, Samer Abou Said and Minal Nasseem

Introduction
Federal Law No. (8) of 1980, as amended, governs the UAE Labor Law (the “Law”) and sets out the grounds upon which an employment contract may be terminated. However, it did not provide clear guidance on the options that would be legally available in the current circumstances.
To address the growing concern within the community, the Ministry of Human Resources and Emiratisation issued the “Ministerial Resolution No. 279 of 2020 concerning the Employment Stability in Establishments of the Private Sector During the Application of Precautionary Measures to Control Novel Coronavirus Outbreak” (the “Resolution 279”). It should be noted that this resolution only applies to non-Emirati onshore employees and its validity is solely for the period during which precautionary measures are being applied.

Application to Free Zone Entities
It is unclear at this stage whether any guidance would be issued regarding free zone entities. However, it is recommended that free zone entities use the Resolution 279 as guidance in the event they wish implement any employment measures because they court might take it into consideration should a dispute arise between the employer and the employee.
Free Zone entities affected by the crisis would be still able to use termination for economic reasons as we explain below.

Termination for economic reasons
It is prevalent in the UAE that the termination of any employment contract for grounds other than those set out in Article 120 of the Law would be considered unfair, and consequently the employee would be entitled to a compensation that does not exceed the equivalent of three months’ salary.
However, Article 117 of the Law allows termination for a “valid” reason. The UAE Courts have accepted that an employer can terminate employment of an employee for economic reasons subject to the following:

  • The employer should provide the employee with a notice, either in accordance with Article 117 or the notice period specified in the employment contract.
  • The economic losses should be real, actual and substantiated by audited financial statements or credible internal financial documents which show that a significant economic loss occurred which justified the termination of the employee(s).
The employer carries the onus to prove such losses before the Court.

Re-organization of employment relationship based on Resolution 279
The Resolution provided onshore employers with an avenue to re-organize their employment relationship. Article 2 of the Resolution stipulates that employers in the private sector who have been affected by the precautionary measures to control Covid-19 may progressively and subject to the consent of the employee opt for the following options:

  • Implement a remote working system / work from home system.
  • Grant paid leave.
  • Grand unpaid leave.
  • Temporarily reduce salaries during the COVID-19 restrictive measures.
  • Permanently reduce salaries.
The wording of this Article provides the order of actions which should be taken by the employers, as necessitated by their business, and indicates that temporary and then permanent reduction in salaries should be the last resort.
Furthermore, a temporary reduction in salary shall be made in writing as an addendum to the labor contract per the template provided by Resolution 279 and will expire at the end of the term of the addendum or enforceability of the Resolution, whichever occurs first. On the other hand, a permanent reduction in salary requires the Ministry’s approval as per the applicable procedures for amending a labor contract.

Employee’s consent to use any of the options is required
Save for paid leave which can be split once by the employer pursuant to Article 76, Resolution 279 requires the consent of the employee for its other options. If an employee is not willing to accept a justified option offered by the employer, the employer may terminate the employee and give the employee end of service benefits.  If the employee files a complaint against the employer, it is believed that the Court will take into consideration that the employer tried to avoid termination by relying on Resolution 279 in order to reduce or reject completely ordering unfair dismissal compensation.

Employer has to provide housing and other entitlements for terminated employees
Article 3 emphasizes that the employers will remain responsible towards the employees who have been made redundant as a result of the precautionary measures to control Covid-19 with regards to their housing and entitlements (other than wages) until they either leave the UAE or become authorized to work for someone else. If the employer distribution of the gross salary does not provide a separate allowance for housing as part of its package, it is unclear whether the employer will be or will not be obliged to provide housing. Moreover, employers should register the redundant employees on the Virtual Labor Market System to help them find alternate roles.

Adoption of measures under Resolution 279 should be gradual, justified and proportional
Resolution 279 requires that the employer gradually adapt the options it provides. Thus, if giving the employee paid leave saves the business, the employer may not resort to unpaid leave or the reduction of salary. Should a dispute arise between the employer and the employee regarding measures taken under Resolution 279, the employer should be able to justify that the measures it adopted were fair and proportional. If the employer fails to justify, the court is likely to order compensation to the employee.

Employees should pay attention that reduction of salary is proportional to the break-down of the salary
When entering into discussions with their employers, employees are recommended to pay attention that the addendum they sign to reduce their salaries includes a proportional distribution of the reduction. If the salary breakdown includes the basic wage and other allowances, the reduction should not be from the basic wage only because it would reduce their end of service gratuity which is calculated based on the basic wage.

Conclusion
If an action is required by an employer during this period with regards to their employees, the employer should follow the guidelines provided in Resolution 279, first by implementing a remote working system, if possible, then granting paid leave, followed by unpaid leave, if necessary. It is advised that employers should not rush to make temporary or permanent reductions in salaries unless it is justified and proportional.


“Contents of this article are for general informational purposes only. It is not intended as professional counsel and should not be used as such.”

Similar Posts

Dubai Courts Adjourn Hearings

By Samer Abou Said

Dubai Courts issued a decision (No. 30 for year 2020) on 17 March 2020  to adjourn all hearings before Courts of Cassation, Appeal and First Instance falling in the period from 22 March 2020 until 16 April 2020. These hearings will be adjourned to a date after 16 April 2020.

The courts will continue to adjudicate matters in summary procedures and provisional matters cases as well as online requests, and criminal cases and appeals related to persons in custody and prisoners.


“Contents of this article are for general informational purposes only. It is not intended as professional counsel and should not be used as such.”

Similar Posts

The UAE Allows 100% Foreign Ownership of 122 Business Activities

By Samer Abou Said

Introduction
The Federal Law by Decree No. 19 of 2018 regarding Foreign Direct Investment (“FDI Law”) aimed to encourage foreign investment in certain sectors in the UAE through removing the requirement that 51% of the shares of a company be held by an Emirati individual or 100% Emirati owned company.
On 17 March 2020, the UAE Cabinet issued Resolution No. 16 of 2020 Defining the Positive List of the Economic Sectors and Activities in which Foreign Direct Investment is Permitted and their Ownership (“Resolution 16”). Resolution 16 included a complete list of the sectors and activities in which foreign investors can own 100% of the shares (the “Positive List”).

List of business activities open to 100% foreign ownership
The Positive List entails 122 activities which specifies required minimum capital for each activity and other requirements. We provide below a summary of the activities:

  • The cultivation of various agricultural items and various farming activities.
  • The manufacturing of a variety of items such as leatherware, wood, agrochemical products, detergents, rubber and plastic, electronics, machinery and equipment.
  • The building of commercial vessels, helicopters and boats.
  • Certain services such as legal consultancy, accounting, engineering and medical activities.
  • Construction of buildings, civil engineering and other specialized construction activities.
  • Education.
  • Creative activities, theatre, musical band and circus.
  • Sea and coastal freight water transport and inland freight water transport.
  • Holding companies in intellectual properties

Excluded activities:
The FDI Law does not apply to projects in the Free Zones. Furthermore, the Law incorporates a “Negative List” which comprised of sectors and activities which will not be altered by the Law. The Negative List includes the following:

  • Exploration and production of petroleum materials.
  • Investigations, security, military sectors, manufacturing of arms, explosives and military equipment, devices and clothing.
  • Banking and financing activities, payment systems and dealing with cash.
  • Insurance services.
  • Hajj (pilgrimage) and Umrah services, providing employment and recruitment services for staff and servants.
  • Water and electricity services.
  • Services related to fisheries.
  • Postal services, telecommunications services and audio and video services.
  • Land and air transport services.
  • Printing and publishing services.
  • Commercial agents’ services.
  • Medical retail such as private pharmacies.
  • Blood banks, venom and quarantine centres.

Should you wish to explore your options of restructuring your business or to have a copy of the entire list of the 122 activities, please get in touch with one of our lawyers.


“Contents of this article are for general informational purposes only. It is not intended as professional counsel and should not be used as such.”

Similar Posts
Important Update for Insurers and Insured: Insurance Disputes to Be Referred to Committee prior to Filing a Case in the Competent Court

Important Update for Insurers and Insured: Insurance Disputes to Be Referred to Committee prior to Filing a Case in the Competent Court

Introduction 
On 25 April 2018, His Highness, Sheikh Khalifa Bin Zayed Al Nahyan, the President of the UAE issued Federal Law No. (3) of 2018 on the Amendment of Certain Provisions of Federal Law No. (6) of 2007 Concerning the Establishment of the Insurance Authority & Organization of its Operations. The new Law went into force on 01 May 2018.

Establishment of Committee to Resolve Insurance Disputes
The most significant amendment was the establishment of a special Committee in accordance with new Article 110. The Committee shall resolve the dispute and issue its decision. An unsatisfied party to the dispute may appeal its decision before the First Instance Court within 30 days of being notified of the decision.

Referring Insurance Disputes to Committee is Mandatory before Filing a Law Suit
Article 110 provides that an insurance dispute shall not be heard by the court if the claimant does not file the dispute first with the Committee and obtain a decision.

Abu Dhabi Court Dismisses a Case Filed by An Insurer
Subsequent to the amendments, the Abu Dhabi Court of First Instance issued a judgment on 29/07/2018 which dismissed a case filed by an insurer against the insurance company who sought recovery of damages to his insured car. The Court dismissed the case observing that the Claimant/Insured has not followed the route prescribed by Article 110 of the Federal Law No. 3 for Year 2018 that set up a committee to resolve insurance disputes.

Other Amendments
Furthermore, in accordance with new Article 28 insurance policies shall be issued in Arabic accompanied by a true translation to another language if needed.
In line with modern legislations, Article 28 stated that the policy`s articles exempting the company from the liability shall be written in bold letters and different colour and must be acknowledged by the insured. This amendment is meant to protect the insured against onerous exemptions.

Get in touch with our lawyers Samer Abou Said or Imad Kassir for more information on how you would be affected by the provisions of the new Law.

“Contents of this article are for general informational purposes only. It is not intended as professional counsel and should not be used as such.”

Similar Posts
The Current View of Dubai Mainland and DIFC Courts Regarding Capacity to Sign Arbitration Agreements

The Current View of Dubai Mainland and DIFC Courts Regarding Capacity to Sign Arbitration Agreements

01 August 2017

By Samer Abou Said, Counsel, The Firm

Introduction
The validity of arbitration agreements in Dubai remains subject to the strict observance by the courts of the formalities set out in the law and repeated case law of cassation courts. Many litigants learnt this the hard way when awards involving hundreds of thousands, and even millions, of pounds of legal expenses were set aside due to the failure to observe such formalities. And such oversight is recurring. However, recently a diverging position was pronounced by the DIFC Courts.

The Current Position of DIFC Courts
The DIFC courts of Dubai have veered in a different that varies from direction professed by main land courts. In Ginette Pjsc v (1) Geary Middle East FZE (2) Geary Limited [2016] DIFC CA-005, Justice Roger Giles accepted the authority of an executive director of a joint stock company (the appellant) who signed a settlement agreement that contained an arbitration clause to enter into arbitration agreement on behalf of his company, despite that the said director was not explicitly authorized by the board of the company as per the requirements of the article 103 of the old UAE Commercial Company Law.

Commenting on case law of Dubai Courts submitted by the appellant in support of its attempt to set aside the award, the DIFC judge distinguished the case before him from those submitted by the appellant as evidence on how Dubai main land courts dealt with the matter to justify reaching a different decision. Furthermore, the judge shifted the onus of proof to the party seeking to set aside the arbitration clause that the executive director was not authorized to agree to arbitration to the shoulders of the appellant.
Apparently, the DIFC court diverged from the consistent interpretation of Dubai courts opining that “it would be odd, and scarcely conducive to commercial efficacy, if entry into a contract containing an arbitration clause did not carry with it agreement to arbitrate in accordance with that clause.”

The following case litigated before Dubai courts reflects a different if not opposite opinion of Dubai courts to that expressed in the aforementioned DIFC judgment.

The Case
The claimant, a supplier of building materials, filed a claim before Dubai courts in 2016 seeking a judgment to commit the defendant to pay outstanding amount for delivered materials. The defendant challenged the jurisdiction of Dubai courts on the grounds that the schedule of the supply contract contains an arbitration agreement. While the position of the claimant was that the schedules were not signed and that the signatory of the supply contract does not have the capacity to enter into arbitration agreements.

The First Instance Court upheld the arbitration clause and dismissed the case for lack of jurisdiction.

The Court of Appeal, in its judgment on 28/11/2016 quashed the judgment of the first instance court and decided that the arbitration clause is not valid for two reasons.

The first ground is that arbitration clause is a special clause that requires the parties to sign the schedules and hence it is not enforceable because the schedules do not carry signature of the claimant. The court implicitly rejected the defendant’s argument that the arbitration clause is valid because the schedules were mentioned in the main supply contract and that they carried the stamp of the appellant.

The second ground is that the signatory of the agreement was a manager of the claimant but not the director whose name was mentioned on the commercial license. Pursuant to the law, only the director whose name is on the commercial license is authorized to enter into arbitration agreements unless provided otherwise in the constituent documents of the claimant / company. The court affirmed that the onus to prove that the signatory of a contract was authorized to sign an arbitration clause rests with the party that invokes the arbitration clause.

The Court of Cassation of Dubai upheld the decision of the Appeal Court in April 2017.

Conclusion
Those two judgments issued by the two courts, which are only several kilometers apart, do look to be much farther apart in their legal reasoning. Whilst the DIFC Appeal Court have dealt with the decision of the Dubai Courts invoked by the appellant cautiously by distinguishing its case, to avoid being seen as opposing the decisions Dubai Courts, the difference in the reasoning and the placement on the onus of proof to prove the validity of the arbitration agreement is significant and stands obvious.
Litigants should be mindful of this difference that does not seem to be fading anytime soon, so that they can draft their dispute resolution clauses accordingly, and when such disputes arise to make the correct strategic decision on which jurisdiction to have recourse to. 

“Contents of this article are for general informational purposes only. It is not intended as professional counsel and should not be used as such.”

Similar Posts
The Use of Experts Reports Before Dubai Courts prior to Litigation and Arbitration

The Use of Experts Reports Before Dubai Courts prior to Litigation and Arbitration

01 August 2017

By Samer Abou Said, Counsel, The Firm

Introduction
Some UAE companies that are owed monies by the opposing parties are increasingly resorting to filing applications before UAE courts for the appointment of experts to assess the amounts owed in order to put pressure on the other party and in a desperate attempt to avoid costly litigation or to obtain better terms for settlement. 
In another article of this issue, we explain how many subcontractors are running into recovery problems due to the high costs of legal proceedings, particularly if the dispute is subject to arbitration. One of the recent trends that we have witnessed is the use of expert reports as a means of putting pressure on the other party. The outcome of this method is rather controversial and not always effective.

Can the Application for Expert Appointment Enhance the Claimant’s Position?
It is very common for UAE courts to appoint experts to prepare a report in the case before them pursuant to Article 69 of the UAE Federal Evidence Law for Civil and Commercial Transactions. This practice is widely relied upon in the overwhelming majority of the cases, even where the expertise requirement is not obvious.

This overreliance stems on many occasions from the lack of sufficient documents in the hands of one party that supports their claim in the absence of a discovery process like that available in common-law jurisdictions.
The ordinary practice is that the court would either suo moto appoint an expert through a preliminary judgment following the end of submissions, or upon the request of a party.

However, following the establishment of the Dubai Amicable Dispute Resolution Centre, litigants now have a new forum (it is an option and not mandatory) in which they may request the appointment of an expert through the Centre before filing their claims before the relevant court.
Under the Centre’s rules, a party can request the appointment of any expert for a sum of AED 12,000 if it is not seeking a monetary claim. The trending practice is seen by some as a way in which a claimant can put pressure on the opposing party prior to issuing the claim before Dubai courts.

An expert report that favours the applicant may enhance its position and could persuade the other party to settle the dispute amicably having had a glimpse of what the evidence against them would be if the case proceeded to the court.

The applicant can rely on the expert report later before the court if it decides to commence proceedings and the court would admit it as evidence where the probative value is subject to its sole estimate. However, the court is not bound to accept the expert report’s conclusions, and it has the discretion to appoint another expert.

Notwithstanding the outcome of the expert’s report, the report itself can be a way to evaluate the strength of the case and act upon it accordingly. However, it should be noted that the parties can still proceed directly to the court without appointing an expert, or can request to appoint an expert during the proceedings.

Appointing Experts in Disputes Subject to Arbitration
Similarly, we have seen that some parties make applications before the Centre (Dubai) or directly before the court (Abu Dhabi) to have an expert appointed even where the dispute is subject to arbitration. The effectiveness of such practice is questionable and it is usually relied upon to avoid the arbitration fees or in an attempt to avoid the arbitration clause in the event the defendant commits a mistake indirectly by recognizing the jurisdiction of the courts.

Notwithstanding that it can be a way to put pressure on the opposing party, the expert report would have lower probative value before the arbitral tribunal because the expert has no duty towards the tribunal. 
This is because the appointment of the expert is under the supervision of the Centre (affiliated to Dubai courts) or the courts if in Abu Dhabi where the appointed experts are selected from the roll of experts maintained by the court, hence providing a certain degree of credibility to the expert’s opinion. However, this does not apply to the tribunal that is not necessarily prone to recognise the professionalism or neutrality of the expert.  

On the other hand, UAE courts have recognised the right of a party to appoint an expert in a dispute subject to arbitration. In a ruling issued in Petition No 475/2016 (Commercial) in 2016, the Court of Cassation of Abu Dhabi reversed a judgment of the Court of Appeal, deciding that a party can apply for the appointment of an expert in spite of the presence of the arbitration agreement if such agreement does not expressly state that the tribunal has the jurisdiction to rule on conservatory and precautionary measures related to the dispute.

The Court added that the arbitral tribunal cannot decide such matters (conservatory and precautionary) without the agreement of the parties to grant it such right.
The Court’s decision explained that the application to appoint an expert is tantamount to a request for “determination of the status” pursuant to Article 68 of UAE Federal Law No 10/1992 (“Evidence Law”). Such determination does not have any impact on the merits of the case, the adjudication of which remains subject to the substantive case.  

Conclusion
Seeking a court-appointed expert report through the Centre in Dubai or through the courts in Abu Dhbai prior to the substantive claim appears to be more relevant if the claim is to be filed before the courts, particularly if the dispute is complicated and a party lacks the supporting evidence.

That being said, the efficacy of appointing an expert in a dispute subject to arbitration seems questionable due to the reasons mentioned above and because it is likely to result in additional expenses and delay of proceedings for several months without reaching the expected outcome. Nevertheless, even where the dispute is subject to arbitration, appointment of an expert before courts may serve other goals of the party seeking it

“Contents of this article are for general informational purposes only. It is not intended as professional counsel and should not be used as such.”

Similar Posts