Wednesday, 27 July 2016

Dubai Dispute Resolution Authority

By art 3 (3) (c) of a decree dated 21 May 2014 (Law No. (7) of 2014 Amending Law No. (9) of 2004 Concerning the Dubai International Financial Centre) the Ruler of Dubai established the Dubai Dispute Resolution Authority, Art 8 (1) of the Law provides that the Authority shall be comprised of the DIFC Courts, the DIFC-LCIA Arbitration Centre and any other tribunals or ancillary bodies established in accordance with Article 8(5)(b) of that Law. At present, those ancillary bodies include the Academy of Law 
which regulates as well as educates DIFC Court practitioners and the Wills and Probate Registry for non-Muslims with assets in Dubai.

The Authority's mission is to be "a platform for delivering legal excellence in the Middle East and the gateway to a suite of services available to businesses operating in Dubai and beyond."  In a white paper distributed by The Lawyer on the 18 July 2016, James Foster and Robyn Waller of Gowling WLG list 15 facts about the Authority to consider when drafting an international contract. These include:
  • the freedom for parties to choose the governing law of the contract;
  • the absence of a requirement that any of the parties has a connection with Dubai;
  • the prestige and experience of its judges; and
  • the DIFC Courts' propensity for innovation.
On the last two points, a press release from the Courts dated 18 May 2016 announced that Sir David Steel had succeeded Sir John Chadwick as Deputy Chief Justice of the DIFC Courts and that Sir Jeremy Cooke had joined the bench and an article in the Emirates Insider announced that the DIFC Courts will open a virtual court in September (see DIFC Courts to launch GCC's first 'virtual court' 23 July 2016 Emirates Insider). The court, which will hear claims of up to AED 1 million (£207,289) using VoIP technology which will enable small and medium enterprises to recover debts and employees compensation for wrongful dismissal without returning to Dubai.  

It should be remembered that the DIFC has its own law of confidence (see DIFC Law of Confidence 27 Jan 2011) and action for passing off (see The DIFC Law of Passing off 7 April 2011). There does not seem to be any reason why this new online court should not entertain trade secrets, franchising and licensing disputes. Practitioners from all jurisdictions can qualify to practise in Dubai but as the rules and practice are modelled on the Civil Procedure Rules and so many of the judges are from London members of the English bar are particularly well placed to do so.

Anyone wish to discuss this article or this topic generally should call +44 (0)20 7404 5252 during office hours or use my contact form.

Tuesday, 12 July 2016


This morning I received comments to two of my articles which began with the words:
"I am a private loan lender which have all take to be a genuine lender i give out the best loan to my client at a very convenient rate" (sic).
In each case the comment was accompanied by an application form for a loan.  Not only does that sentence offend English grammar it also offends me. This blog is intended to be a source of information and commentary on the intellectual property laws of the GCC countries and not a billboard for services of various kinds.

The company that enables me to publish this blog allows me to scrutinize each and every comment before it appears and gives me the choice of publishing the comment, deleting it or marking it as spam.  I marked the two loan application comments as spam and they will never appear on this blog as long as it subsists.

Sometimes an advertisement is disguised in elaborate flattery for the article or publication with a hypertext link to the service provider. I wasn't born yesterday and I am quite astute to that approach too. Such comments are also marked as spam.

The only commentary that I shall allow are those that relate to the subject matter of the article.

Friday, 10 June 2016

Fajer Ahmed's Law Column

National Assembly of Kuwait
Author: xiquinhosilva
Source Wikipedia
Creative Commons Licence

Serendipity means a "fortunate happenstance" or "pleasant surprise". The word was coined by Horace Walpole who explained an unexpected discovery he had made by reference to a Persian fairy tale, The Three Princes of Serendip in which the princes were “always making discoveries, by accidents and sagacity, of things which they were not in quest of”.  A practical example of serendipity occurred this morning when I was referred to an article in the Kuwait Times about a ballet teacher in Kuwait by the Royal Academy of Dance (see Jane Lambert Dance in the Gulf 10 June 2016 Terpsichore).

I discovered that the Kuwait Times has a legal column in English called Legalese. The columnist is called "Attorney Fajer Ahmed".  His columns seems to cover everything from What happens if you’re fired by telephone? which was published on 5 June 2016 to Understanding Kuwait's Laws on 15 Nov 2015. Articles that my readers might find particularly interesting include The Law and Franchises in Kuwait (28 Feb 2016), How to start a Business in Kuwait 31 Jan 2016) and Protecting your Intellectual Property (17 Jan 2016).

Fajer also contributes to a an online publication called 248AM which also has a legal column. Interesting articles on that site include Kuwait Law: How a Law becomes a Law 2 Nov 2015 and Kuwait Law: SMEs and Small Businesses in Kuwait 25 Nov 2013. 

I also learned from 248AM that Kuwait is building a cultural centre that will include a stage for opera, ballet and other performing arts (see Sneak Peak: Kuwait Cultural Centre 5 May 2014 and A Photographic Journey inside Qasr Al Salam 9 Apr 2014). Since copyright protects librettos, musical scores, choreographic notation, stage backdrops and sometimes costumes and props and as actors, dancers, singers and musicians have the right to object to filming, taping or broadcasting of their performances it is perhaps time to revisit Kuwait copyright and related rights which I last discussed in Intellectual Property Law in Kuwait on 14 July 2011.

Thursday, 24 March 2016

When an Abu Dhabi Royal sues in England: Sheikh Tahnoon Bin Saeed Bin Shakhboot Al Nehayan v Kent

Royal Courts of Justice
Author Anthony M
Source Wikipedia
Creative Commons Licence

In the United Kingdom, as in many other countries, the unsuccessful party in civil litigation usually has to contribute substantially to the solicitors and counsel's fees of the successful party. The amount that the unsuccessful party has to pay is known as "costs" in England, Wales and Northern Ireland and "expenses" in Scotland. If there is serious doubt as to whether a claimant could or would pay such costs or expenses the courts if those jurisdictions have power to require him or her to give security (or in Scotland caution) for the costs. That typically takes the form of a deposit of money into an interest bearing account managed by the court but it could be a bank guarantee, insurance bond, escrow fund or other arrangement.

In England and Wales the power to order security for costs is governed by Section II of Part 25 of the Civil Procedure Rules. CPR 25.13 enables the court to make an order for security for costs if:
"(a) it is satisfied, having regard to all the circumstances of the case, that it is just to make such an order; and
(b) (i) one or more of the conditions in paragraph (2) applies, or
(ii) an enactment permits the court to require security for costs."
This is a very powerful weapon for defendants as it can stop a claim in its tracks.  The usual reason for an order is that:
"the claimant is a company or other body (whether incorporated inside or outside Great Britain) and there is reason to believe that it will be unable to pay the defendant’s costs if ordered to do so."
However, there are other grounds one of which is that the claimant is:
"(i) resident out of the jurisdiction; but
(ii) not resident in a Brussels Contracting State, a State bound by the Lugano Convention, a State bound by the 2005 Hague Convention or a Regulation State, as defined in section 1(3) of the Civil Jurisdiction and Judgments Act 1982."
It was on that ground that Mrs Justice Nicola Davies expressed willingness in  Sheikh Tahnoon Bin Saeed Bin Shakhboot Al Nehayan v Kent [2016] EWHC 623 (QB) (21 March 2016) to make a security for costs order (albeit limited in scope) against the sixth in line to the throne of Abu Dhabi who is a very wealthy man.

In this action the claimant claimed £2 million under an agreement with the defendant to invest in an hotel business. His claim form was issued on 8 July 2013 and a request was made for interim security on 10 Jan 2014. That was not provided to the defendant's satisfaction so he applied on 28 July 2015 for security in the sum of £1 million payable as follows:
"i) £400,000 within 35 days of the date of the court's order;
ii) £250,000 by no later than 35 days after the hearing of the restored CMC;
iii) £350,000 by no later than 2 days before the date fixed for the trial in the action."
The defendant's application notice provided for the claim to be struck out and judgment to be given to the defendant if such security was not given.

The defendant submitted that:
  1. He would face serious and substantial difficulties in seeking to enforce any costs award in his favour against the claimant having regard to the claimant's status as a senior member of the ruling family of Abu Dhabi and for position generally with respect to the enforceability in the UAE of judgments of the court of England and Wales.
  2. If the court were to ignore the standing of the claimant and concerns about the judicial system in the UAE, expert evidence before the court demonstrated that a costs order from the courts in England and Wales would not be enforced by the courts in the UAE.
In support of his first submission, the defendant relied on a report on the UAE by the United Nations Special Rapporteur on the Independence of Judges and Lawyers. The rapporteur found that:
"The justice system in the UAE has developed into an elaborate and complex court system in a relatively short time frame. Despite commendable progress and achievements the Special Rapporteur is concerned that the challenges and shortcomings she has identified are serious and negatively affect the delivery of justice, the enjoyment of human rights and the public's confidence in the judiciary. …"
 She found at para [28] of her report that:
"The federal system of the United Arab Emirates is complex and can be difficult to understand, in particular for non nationals, who constitute the majority of the population. During a visit, the Special Rapporteur was told that because of the complex superposition of federal and local laws, it is sometimes difficult for the public to know where the boundaries lie between the federal and local justice systems. There also appears to be a lack of consistency between the applications of federal laws between the Emirates. The Special Rapporteur is concerned about reports that it is difficult for people to know which legal provisions are applicable to them depending on where they are in the Federation, and that laws are sometimes applied in an arbitrary manner, that creates ambiguity and mistrust with both law enforcement authorities and the justice system."
There were also concerns about the independence of the judiciary, the absence of a formal distinction between the judiciary and the executive and particularly that the attorney-general was one of the 7 members of the federal supreme court and 3 others represented the executive.

In support of his second submission, the defendant relied on the evidence of a senior UAE lawyer  that it would be extremely difficulty and expensive to enforce a costs order against the claimant in the UAE.

At para [29] of her judgment, Mrs Justice Nicola Davies found no objectively justified grounds upon which to conclude that this defendant was unlikely to successfully obtain enforcement of a costs judgment against the claimant in the civil or commercial courts of the UAE but she did accept at [30] that the defendant would be likely to have to embark upon a legal process which could be lengthy and thus costly in order to attempt to obtain enforcement of a costs order. She formed the view that those difficulties would be better protected by a security for costs order tailored to the additional costs that the defendant would incur in enforcing a costs order. She made it clear that such an order would be limited in its amount and would not preclude this claimant from pursuing his claim.

As the defendant's application did not include such a claim and as no quantification had been provided, Her Ladyship left it to the parties to state in writing whether they could agree terms and to return for a second hearing if they could not.

An order of the kind proposed by the judge is unusual and would not have been made if the claimant had substantial assets in the United Kingdom. In expressing willingness to make it, she impliedly accepted at least some of the criticisms that had been made of the UAE and Abu Dhabi legal systems by the defendant. No doubt that is one of the reasons why the authorities in Dubai and Abu Dhabi have established special common law jurisdictions in their financial districts (see Jane Lambert Abu Dhabi Global Market - Yet Another Common Law Enclave in the Gulf 22 Feb 2016).

Should anyone wish to discuss this case or any of the issues raised in it he or she should call me on +44 (0)207 404 5252 during office hours or send me a message through my contact form. I should like to thank Mr Abdul Hafeezi of Freeman Harris for bringing this case to my attention.

    Monday, 22 February 2016

    Abu Dhabi Global Market - Yet Another Common Law Enclave in the Gulf

    The Abu Dhabi Global Market ("the ADGM") describes itself as "a broad-based international financial centre for local, regional and international institutions, established in accordance with the Federal Law No (8) of 2004, Federal Decree No (15) of 2013, Cabinet Resolution No (4) of 2013, and Abu Dhabi Law No (4) of 2013." It is located on Al Maryah Island which is a 114 hectare island to the North East of the capital. Like the Dubai International Financial Centre and the Qatar Financial Centre, the ADGM will have its own legal system based on English common law.

    S.1 (1) of the Application of English Law Regulations 2015 provides:
    "The common law of England (including the principles and rules of equity), as it stands from time to time, shall apply and have legal force in, and form part of the law of, the Abu Dhabi Global Market—
    (a) so far as it is applicable to the circumstances of the Abu Dhabi Global Market;
    (b) subject to such modifications as those circumstances require;
    (c) subject to any amendment thereof (whenever made) pursuant to any Abu Dhabi Global Market enactment; and
    (d) notwithstanding any amendment thereof as part of the law of England made pursuant to an Act or any legislative instrument adopted thereunder at any time after the date of enactment of these Regulations, which amendment shall not apply and have legal force in, or form part of the law of, the Abu Dhabi Global Market, unless and until an Abu Dhabi Global Market enactment expressly provides that it applies and has legal force in, and forms part of the law of, the Abu Dhabi Global Market."
    Accordingly, it would appear that the English law of confidence and the action for passing off are imported directly into the law of the ADGM.

    S.2 (1) of the same Regulations imports a number of UK statutes into ADGM law with certain modifications. The governing body of the ADGM have made their own laws on companies, data protection, employment, insolvency and partnerships which are based on English law. All the ADGM's laws will be in English.

    The ADGM Courts will be governed by the ADGM Courts, Civil Evidence, Judgments, Enforcement and Judicial Appointments Regulations 2015. S. 1 (2) of those Regulations establishes a Court of Appeal and a Court of First Instance. S.12 (1) provides for the Court of Appeal to be a superior court of record and the court of final instance in the ADGM and s.16 (1) for the Court of First Instance to be a superior court of record.  The Court of Appeal shall consist of the Chief Justice of the ADGM and any other judge directed to sit in that court by the Chief Justice (see s.26 (1)). The Court of First Instance shall consist of the Chief Justice and any other judge directed to sit in that court by the Chief Justice.

    The Chief Justice has power under s.187 (1) and s.191 (1) of the Regulations to make rules and practice directions to be known as the “ADGM Court Procedure Rules” (see s.186 (1)). These rules shall govern and provide for all the practice and procedure to be followed in the Court of Appeal, the Court of First Instance and any other court as may, from time to time, exist.

    The Courts are likely to open in the next few months.  The judiciary has now been appointed. Lord Hope of Craighead will be the first Chief Justice and Lord Saville, the Hon. Kenneth Hayne AC, the Rt. Hon. Sir Peter Blanchard KNZM and William Stone QC will also sit on the bench. Lord Hope must now compile draft ADGM Court Procedure Rules and Practice Directions for consultation.  When the courts open, any lawyer who has practised or been employed as a lawyer for a continuous period of 5 years or more anywhere in the world may appear before the ADGM courts by virtue of s.219 (1) (a) of the ADGM Courts etc Regulations 2015.

    Should anyone wish to discuss this article of the ABGM courts generally he or she should not hesitate to call me during office hours on +44 (0)20 7404 5252 or get in touch through my contact form.

    Monday, 26 October 2015

    Arab Center for Dispute Resolution: New Kid on the UDRP Block

    Every agreement to register a generic top level domain name, that is to say one ending with the suffix ".com", ".org" or ".info", contains a clause requiring the applicant to agree to submit any dispute with a trade mark owner over the domain name to a form of alternative dispute resolution known as "a mandatory administrative proceeding".  This is a form of adjudication by a one or three member tribunal appointed by an approved administrative-dispute-resolution service provider. Those service providers are appointed by the Internet Corporation for Assigned Names and Numbers ("ICANN"), a California company which manages the international domain name system ("DNS") in accordance with a memorandum of understanding with the US Department of Commerce dated 25 Nov 1998.

    ICANN has appointed five administrative-dispute-resolution service providers, the latest being the Arab Center for Domain Name Dispute Resolution ("ACDR") which was approved on the 18 May 2013. The others are the Asian Domain Name Dispute Resolution Centre, the Czech Arbitration Court of Arbitration Arbitration Center for Internet Disputes, the National Arbitration Forum and the World Intellectual Property Organization ("WIPO").   ICANN has published the process by which it considers applications for approval as an administrative-dispute-resolution service provider on its website in Information Concerning Approval Process for Dispute-Resolution Service Providers.

    The function of an administrative-dispute-resolution service provider is to receive complaints by those who object to the registration of a domain name and allocate them to neutrals known as "administrative panels" to determine whether the complaint is well founded.  If the panel finds that the complaint is well founded he or she can order the company that registered the domain name ("the registrar") to cancel the registration or transfer it to the complainant. The registrar is required by its contract with ICANN to wait 10 business days to see whether the transfer is challenged in the courts in which the registrar or the domain name holder is domiciled.  If it is not challenged the registrar is contractually bound to carry out the panel's order.

    The memorandum of understanding sets out a number of principles by which the DNS was to be managed one of which was competition.  Art II C.2 provides:
    "This Agreement promotes the management of the DNS in a manner that will permit market mechanisms to support competition and consumer choice in the technical management of the DNS. This competition will lower costs, promote innovation, and enhance user choice and satisfaction."
    That include competition between registrars for applications for the registration of domain names and competition between administrative-dispute-resolution service providers in the resolution of domain name disputes.  As all administrative-dispute-resolution service providers have to decide domain name disputes in accordance with ICANN's Uniform Domain Name Dispute Resolution Policy and its Rules for Uniform Domain Name Dispute Resolution Policy, the only scope for competition lies in fees and service.

    As the fees charged by the ACDR are comparable with WIPO's and those of other service providers the ACDR must compete on service.  The choice of service provider lies with the complainant who will consider such factors as language, convenience and confidence in the panel.  The ACDR is located in Amman and its offices are described in its application to ICANN for approval as a service provider describes them as "spacious" and "state of the art".  Its staff are said to be "educated in English or French, or both, next to Arabic". Its panel of neutrals are drawn from across the world as well as the Middle East and includes several members of other service providers' panels.

    Those factors would might be expected to appeal to complainants in Jordan and other Middle East North African countries but perhaps not so much to those outside the region unless they have trade marks in Arabic. According to the WIPO over 88% of all its disputes since 1999 have been conducted in English followed by Spanish and French accounting for 4.1% and 2.5% respectively. No cases have been conducted in Arabic though there have been 83 cases in Turkish and one in Hebrew. Whereas 663 complaints have been filed from the USA, 267 from France, 220 from Germany and 189 from the UK so far this year there have been only 3 from Qatar and 6 from the United Arab Emirates. It is perhaps not surprising the no decisions have been published by the ACDR so far.

    However, that may change with the registration of an increasing number of domain names in Arabic script, more registration agreements in the Arabic language and the economic development of the region generally. The Asian Domain Name Dispute Resolution Centre appears to have developed a market in resolving disputes in Mandarin and that may be a model for the ACDR.

    Should anyone wish to discuss this article or domain name disputes in general, he or she should call me on +44 (0)20 7404 5252 during office hours or use my contact form.

    Saturday, 19 September 2015

    Pursuing Expatriates in England and Wales

    Oxford Combined Court Centre
    Author Kaishu Tai
    Source Wikipedia
    Creative Commons Licence

    According to such web forums as the Consumer Action Group, Getoutofdebtfree, LegalBeagles and World Law Direct, banks and other financial institutions in Dubai have been chasing returning expatriates in this country for unpaid bank loans, credit card balances and other debts that they are alleged to have incurred in the Emirates. Much of the advice that is posted to those forums is helpful but some of it is not. One or two posts are downright dangerous. Here are some tips for handling such claims.

    1.  Foreign debts can be pursued here

    As a general rule the courts in England and Wales will enforce foreign debts and other causes of action. Those courts will apply the law of the place where the debt or other cause of action occurred.  Thus, if you have borrowed money from a Dubai bank or credit card company the court will construe and enforce the loan or credit card agreement in accordance with UAE and Dubai law rather than that of England and Wales. There are a number of exceptions. For example, the English courts will rarely entertain a claim where the parties have agreed to resolve their dispute in the courts of some other country or by arbitration. However, that would not prevent the English courts from enforcing a foreign judgment or arbitration award.

    2.  Foreign Limitations Periods 

    Every legal system sets a time limit for bringing a claim. That is known as "the limitation period." In England and Wales the limitation period for most other claims is 6 years.  In the United Arab Emirates it is much longer.  Art 473 of the Civil Code provides:
    "A right shall not expire by the passage of time but no claim shall be heard if denied after the lapse of fifteen years without lawful excuse, but having regard to any special provisions relating thereto."
    For many years the English courts applied the English limitation period even if the law of the place where the contract was made provided a different limitation period but our law was changed by the  Foreign Limitation Periods Act 1984. S.1 (1) of that Act provides:
    "Subject to the following provisions of this Act, where in any action or proceedings in a court in England and Wales the law of any other country falls (in accordance with rules of private international law applicable by any such court) to be taken into account in the determination of any matter—
    (a)  the law of that other country relating to limitation shall apply in respect of that matter for the purposes of the action or proceedings subject to section 1A; and
    (b) except where that matter falls within subsection (2) below, the law of England and Wales relating to limitation shall not so apply."
    However, that section is subject to s.2 (1) and (2)  of the Act:
    "(1)   In any case in which the application of section 1 above would to any extent conflict (whether under subsection (2) below or otherwise) with public policy, that section shall not apply to the extent that its application would so conflict.
    (2)   the application of section 1 above in relation to any action or proceedings shall conflict with public policy to the extent that its application would cause undue hardship to a person who is, or might be made, a party to the action or proceedings."
    There have been cases where very short foreign limitation periods have been overridden on the ground that they are contrary to public policy in that they cause undue hardship to the claimant but I have found no case where an exceedingly long limitation period has been overridden by an English court. However, it is at least arguable that s.2 (1) and (2) were inserted to enable the English courts to consider lengthy limitation periods like that of the UAE and to override them if need be. I am aware of at least one recent case where an application for summary judgment by a foreign creditor was dismissed on that ground.

    Try to settle quickly

    Because costs can mount up quickly for all parties the sooner you settle your dispute the better.  The longer you leave it the more expensive settlement will become because you will have to take account of your own and probably the other side's costs.

    Practice Direction - Pre-Action Conduct and Protocols

    Paragraph 3 of the Practice Direction - Pre-Action Conduct and Protocols provides:
    "Before commencing proceedings, the court will expect the parties to have exchanged sufficient information to—
    (a)  understand each other’s position;
    (b)  make decisions about how to proceed;
    (c)  try to settle the issues without proceedings;
    (d)  consider a form of Alternative Dispute Resolution (ADR) to assist with settlement;
    (e) support the efficient management of those proceedings; and
    (f) reduce the costs of resolving the dispute."
    The first step is for the creditor's solicitors to write a letter before claim. It is imperative to acknowledge that letter at once. It is unlikely to be a try on even if it is the first communication you have received from the other side in many years. You then have a very short time in which to seek legal advice in order to answer the letter before claim in full.

    Getting the Right Legal Advice

    Claims by foreign creditors to enforce foreign contracts involve difficult points of foreign as well as English law and not every law firm or barrister has experience of this kind of litigation. Consumer advice services and websites are even less likely to have all the answers. Ask your legal advisor whether he or she has experience of the sort of claim that you are facing and how such previous claims were resolved. Specialist legal advice does not come cheap but it is a lot less expensive than litigation which is likely to result from bad advice or no advice at all. Remember that there are lots of deals that can be done to reduce or spread the cost of legal advice.

    Be prepared for Hard Bargaining

    The other side are likely to be represented by law firms with years of experience of this kind of litigation and they can be expected to drive a very hard bargain. There is nothing personal in this. They are just doing their job. The best way to deal with them is to follow the Practice Direction and seek and follow the best advice that is available to you.

    Further Information

    If you want to discuss this article or any related matter, call me on 020 7404 5252 during office hours or use my contact form.