• Legal Update

    ADGM issues new rules permitting litigation funding

    funding-davidson

    The Abu Dhabi Global Market (“ADGM”) Courts have recently issued legislation which expressly allows for third-party litigation funding in what they describe as a “first” in the Middle East and North Africa (“MENA”) region.  The introduction of the “Litigation Funding Rules 2019” follows a public consultation and review of existing frameworks in jurisdictions such as the United States, England and Wales, and Hong Kong.

    Litigation Funding is a process which enables third parties to bear the costs of litigation in exchange for an agreed proportion of the eventual recovered sum. Litigation Funding Agreements (“LFA”) share certain similarities with Conditional Fee Agreements (“CFA”) or ‘no-win-no-fee’ arrangements. Both an LFA and CFA ensure that the Litigant does not bear certain upfront and/or ongoing costs in respect of the litigation, in exchange for the Litigant agreeing to part with a sum or percentage of their final payout. The main difference between a CFA and LFA is that under an LFA, a third party to the litigation (the Funder) covers the agreed upfront costs and/or ongoing costs.

    The Chief Justice of the ADGM Courts commented that the legislation aims “to strike a balance between litigants’ needs for the financing of their proceedings to ensure access to justice, the legitimate commercial interests of Funders, and promoting transparency of the Funder’s role for the benefit of consumers of these resources.” The new rules do so by providing for the minimum terms to be included in an LFA such as liability to pay insurance premiums, the amount of funding and its scope, and timings with regards to the advance of tranches. The legislation contains provisions which also regulate settlement of funds, LFA termination procedures and provide that the ADGM is the correct forum and jurisdiction for disputes arising from AGDM LFAs.

    The new framework is yet another progression in the UAE legal sector, following the DIFC Courts’ Practice Direction No. 2 of 2017 which established a framework for funding claims in the DIFC Courts, and the long-awaited amendment to DIAC Arbitration Rules, which will acknowledge third party funding.

    For further information in relation to the ADGM or the new rules permitting litigation funding, please contact caschipperton@davidsoncolaw.com

  • Visa

    New Visa Sponsorship Policy

    new-visa-rules-dubai

    Considerations will now be made to the persons “income”, rather than their “profession”.

    The UAE cabinet has recently announced it has adopted a decision to amend rules for expats sponsoring family members. Previously, only members of certain listed “professions” could sponsor the visa of a family member, meaning that certain workers, regardless of their salary, would not be able to move their family over to the UAE to reside with them. This condition has now been removed, with the sole requirement being an individual must have an “income”. As of yet, there are no specific details in respect of whether there will be a minimum threshold of income for the rules to apply however, the decision has been welcomed as a positive move for the UAE, as it simplifies the sponsorship process and allows more UAE residents to move their families to the country.

  • Private Client

    Did you know that Davidson & Co has one of the best Private Client practices in the UAE?

    Private Client practices in the UAE

    As our economy continues to expand and the private wealth of individuals across the globe is on the rise, at Davidson & Co we recognise that it is now more important than ever to make suitable arrangements to manage your assets and your family’s future.

    We pride ourselves on being one of a limited number of firms within the region offering a full range of private client services. Our team are expertly placed to advise expats, UAE residents, or international persons with a connection to the UAE on: –

    • Wealth Structuring
    • Asset Protection
    • Succession Planning
    • Family Governance
    • Family Office
    • Family/Private Disputes
    • Reputation Management
    • Economic residency and Second Citizenship

    For further information on how our team could assist you, please contact Andrew Young or Victoria Smylie on +971 4 343 8897 or at ayoung@davidsoncolaw.com / vsmylie@davidsoncolaw.com.

  • Employment/ Legal Update

    All UAE workers entitled to 14 public holidays in 2019 and 2020

    uae worker

    The UAE government has taken the decision to remove the distinction between private sector and public sector in terms of public and national holidays. Previously the public sector had been granted more public holiday than the private sector every year, and the decision is seen as one designed to encourage more Emiratis to enter into the private sector.

    All workers in the UAE for the next 2 years are therefore entitled to 14 days public and national holiday.

  • Legal Update

    Middle East Legal Awards 2019

    awards-2019

    Davidson & Co are delighted to announce that two of our lawyers have been shortlisted for awards at the Middle East Legal Awards 2019.

    Scottish duo Yousif Ahmed (‘Rising Star’ category) and Victoria Smylie (‘Most Promising Newcomer’ category) have been recognised for their outstanding legal work and contribution over the last year.

    The firm’s founding partner, Jonathon Davidson commented “For two of our lawyers to receive nominations and be shortlisted for awards at such a prestigious ceremony is a testament to the quality of our team as a whole. Well done to our nominees and to all those in the firm who have supported them. Congratulations, as well, to all of the other firms and individuals involved!

    The awards ceremony will be taking place on Thursday 18 April 2019 at the Ritz-Carlton in JBR, Dubai.

  • Federal Law/ Legal Update

    Arbitration Law Update – Federal Law No. 6 of 2018

    Arbitration Law Update

    The much-anticipated Federal Law No. 6 of 2018 (the “New Federal Law”), which broadly aligns the UAE federal law with the United Nations Commission on International Trade Law (UNICITRAL) Model Law on International Commercial Arbitration, was implemented in mid-2018 in an attempt to secure the UAE’s position as an international hub for arbitration disputes. The New Federal Law, which is seen as a radical overhaul, has repealed Articles 203 to 218 of the UAE Civil Procedure Code (Federal Law No. 11 of 1992 (as amended)), and was earmarked to increase the scope of application of federal arbitration law, to clarify procedural issues stemming from capacity to enter arbitration agreements, and to empower tribunals to order interim remedies.

    What is Arbitration?
    Arbitration is a popular form of dispute resolution whereby arbitrators, as opposed to judges, render an arbitration award that is legally binding on both parties. Arbitration is attractive in commercial disputes, as parties can agree the procedure that a tribunal must follow, as well as nominating arbitrators with the relevant expertise to comprise the tribunal, rather than an expert of law (judge).

    Scope of Application
    The New Federal Law potentially extends the scope of the law to apply to international arbitrations (those seated outside the UAE) where the governing law is UAE law. This interpretation is ambitious, and it remains to be seen whether extraterritorial application will be accepted in other seats.

    Arbitration Agreements
    The New Federal Law still contains express provisions relating to the authority to enter arbitration agreements, though the requirements have been somewhat watered down. Incorporation by reference, in line with the UNICCITRAL Model Law, is now deemed acceptable, as is a party’s request to refer a dispute subject to court proceedings to arbitration where it is alleged the parties agreed to arbitrate. These changes are designed to reduce the all-too-common procedural delay tactics whereby one party challenges the signatory’s capacity to enter the arbitration agreement.

    Interim Remedies
    In a much anticipated and welcomed step forward, the New Federal Law expressly recognises the tribunal’s authority to order interim or conservatory measures as it considers necessary. This will allow for preservation and maintenance of evidence and assets, and is undoubtedly one of the highlights on the new legislation.

    For further information in relation to Federal Law No. 6 of 2018 and arbitration in the UAE, please contact caschipperton@davidsoncolegal.com

  • Legal Update

    UAE set to introduce ‘Good Samaritan’ law in 2019

    Good Samaritan law 2019

    The Rescuer Protection Law, recently approved by the UAE Ministry of Health and Prevention, will allow bystanders to offer aid in medical emergencies without fear of legal punishments.

    With Abu Dhabi Police previously stating that it is an offence to provide assistance without being trained in first aid, medical professionals in the UAE have advised that the general public are often reluctant to intervene in emergency situations for fear of prosecution. It is therefore hoped the law will boost survival rates and encourage the public to provide assistance in life-threatening situations.

    A large public campaign to raise awareness of the new law is expected and community services centres will be introduced to train UAE residents in providing lifesaving assistance in emergencies.

    The law will be sent to the UAE Cabinet for final approval within the next two weeks and is expected to be introduced shortly after.

  • Employment/ Legal Update

    Terminating an unlimited term contract under Article 117

    Terminating an unlimited term contract under Article 117

    Federal Law number 8 of 1980 (as amended), colloquially known as the UAE Labour Law, regulates all employment contracts in the UAE, with the exception of certain ‘offshore’ jurisdictions such as the Dubai International Financial Centre or Abu Dhabi Global Market. It is therefore a fundamental piece of legislation, the understanding of which is essential to both employees and employers alike.

    The UAE Labour Law distinguishes between two types of employment contracts; limited term and unlimited term. In their basic forms, the contracts are as the name suggests; limited term contracts specify a fixed term and an end date, and unlimited term contracts are open ended and therefore seen as more flexible. Different articles relate to the termination of the two separate contract types, and for the purposes of this commentary, we will review one of these articles – article 117 – one of the two main ways in which an employer may lawfully terminate an employee’s unlimited term contact.

    Article 117 stipulates that there must be ‘valid grounds’ by which either an employer or employee can terminate an unlimited contract. These ‘valid grounds’ are not defined, although the UAE Labour Law does specify that they must be work related when seeking to be relied upon by the employer, and from previous judgments, the Labour Courts have been willing to accept poor performance or misconduct as a ‘valid reason’. Where an employee is terminated for a valid reason, they are entitled to their full end of service gratuity and other entitlements under the law.

    Where a company fails to comply with the UAE Labour Law provisions regarding termination, they may be found to have arbitrarily dismissed the employee, and subject to a penalty of between 1-3 months compensation based on an employee’s full final salary. The penalty is at the court’s discretion, usually having regard to the specifics of each case; eg. length of employment, seniority etc.

    Under the terms of article 117, a minimum mandatory notice period of thirty days is also prescribed, during which an employee is entitled to their full pay and benefits, and are still bound by the terms of their employment contract. Failure to abide by the notice period, by the employer or employee, opens up the possibility for a payment in lieu of notice. Whether the employer wishes the employee to remain an active part of the business during the notice period, or decides that gardening leave is more appropriate, is a matter of company policy. The requirements of an employee on notice should be set out clearly so as to avoid dispute, and should ensure that handover, and any other company requirements, happen during the notice period and specifically while the employee is still contracted with the company.

    The legal obligations on an employer do not end once article 117 has been satisfied, but having a coherent and well-drafted company policy that expands upon what ‘valid grounds’ are, provides for company work standards and details procedure on termination, can ensure that the termination process is as straightforward as possible. The best outcome in any termination is one whereby both the employer and employee know the process, and are committed to it.

    Where an employer is looking to rely on article 117 to terminate an employee, it is extremely important that the correct procedure is followed and the necessary paperwork is in place.

    For further information on article 117 or any other employment advice

    Christopher Chipperton
    caschipperton@davidsoncolaw.com
    +971 4 343 8897

  • Property

    Landmark Acquisition deal with one of UAE’s largest real estate developers

    Landmark Acquisition deal

    Davidson & Co has acted for one of the Middle East’s leading construction companies in a share acquisition (valued at AED 230,000,000) from one of the largest real estate developers in the UAE with a prominent international presence.

    Our team worked together to complete this complex transaction within a demanding time frame. We delivered a range of contractual documentary suites that provided the framework and platform to facilitate the overall transaction. From the negotiation stages up to completion we worked together with the developer’s lawyers to achieve a successful completion and meet our client’s needs in advance of their expected timeframes.

    This was a significant deal and we are very pleased to have worked with our client in helping deliver an excellent outcome for all concerned. The transaction allowed us to showcase the strength and depth of our local commercial and industrial expertise and our unrivalled M&A practices.

    Managing partner, Jonathon Davidson commented, “This acquisition represents a significant milestone in our client’s regional expansion. The matter allowed us to demonstrate our deep understanding of the real estate and construction sector and we are thrilled to have had the opportunity to work with one of the Middle East’s leading construction companies on this transaction.”

    Reach out to us for a confidential discussion on Mergers and Acquisitions or general Corporate matters and to find out how we can help.

    Our team would be delighted to hear from you.

    Rhea Bindra
    rbindra@davidsoncolaw.com

    Yousif Ahmed
    yahmed@davidsoncolaw.com

  • Economy

    Major JV between China and Iran

    china-iran-JV

    Davidson & Co’s Corporate and Commercial team has been providing local and international clients with legal services for over ten years. Our Corporate and Commercial division has a growing clientele base that includes local, regional and international companies, banks and financial institutions, international and regional law firms and high-net-worth individuals.

    Recently, we acted in a corporate restructuring involving the establishment of a joint venture company and multiple share transfers to facilitate the investment by a major state-owned petroleum energy and chemicals company in China of over USD 500,000,000 in a long-established methanol plant based in Iran.

    This joint venture marks the Chinese entry into the Iranian methanol market. The above corporate restructuring is expected to significantly boost annual revenue generated in Iran and China.

    Our team on this transaction comprised of Partner, Andrew Lyons and Associate, Rhea Bindra. Managing Partner, Jonathon Davidson commented: “We are delighted to have continued our long-standing relationship with our clients based in Iran, by acting on yet another successful corporate restructuring, which is expected to prove a very progressive move for them in the Iranian and Chinese markets.”

    This transaction is another indication of continued M&A activity, which we are seeing within the oil and gas sector. The matter allowed us yet again to demonstrate our deep understanding of the realm of corporate and commercial law in the region and abroad.

    We aim to simplify the issues involved with transactions and make it our focus to help our clients understand their investment risks, at every stage.

    Reach out to us for a confidential discussion on any Corporate or Commercial matters and to find out how we can help.

    Our team would be delighted to hear from you.

    Rhea Bindra
    rbindra@davidsoncolaw.com

    Yousif Ahmed
    yahmed@davidsoncolaw.com