Sheikh Mohammed issues law on free zones and special development zones in Dubai

In his capacity as Ruler of Dubai, Vice President and Prime Minister of the United Arab Emirates, His Highness Sheikh Mohammed bin Rashid al Maktoum, issued Law No. 15 of 2016 on the regulations issued by the authorities of free zones and special development zones in Dubai.

The new Law is applicable to all free zones and special development zones in Dubai, including Dubai International Financial Centre, DIFC. Government entities subject to this Law will publish any bylaws or regulations on their official websites and make them available to the public free of charge.

Pursuant to the Law, authorities of free zones and special development zones in Dubai may publish their regulations in Arabic or any other language. The regulations published in any authority’s official website is binding and considered effective within 30 days of the date of publication unless stated otherwise.

All regulations issued by authorities of free zones and special development zones in Dubai prior to Law No. 15 of 2016 remain valid and obligatory and must be communicated by the authorities through their official websites within 30 days of the date of activation of the new Law.

The new Law shall be published in the Official Gazette and is effective from the date of publication.

Sheikh Khalifa U.A.E President issued federal bankruptcy law by decree

Sheikh Khalifa, the President, on Monday issued the long-awaited new federal bankruptcy law by decree, according to the state news agency Wam.

The law, which contains elements of bankruptcy protection laws from jurisdictions including France, Germany and the Netherlands, provides, for the first time, a comprehensive legal framework to help distressed companies avoid bankruptcy and liquidation.Under the terms of the federal constitution, the new law will come into effect three months from its publication in the country’s official legal gazette.

A senior official at the Ministry of Finance, who asked to remain anonymous, said that the new law had already been published in the gazette, and would come into effect in late December or early January. A copy of the new law seen by The National dates the law’s approval by the president from September 20.

The new law contains provisions to safeguard the rights of both creditors and debtors in insolvency situations, including measures that prioritise secured creditor rights and enable companies to restructure without unanimous creditor approval.

The law applies to companies established under the commercial company’s law, companies that are partly or fully owned by the federal or the local government, and companies and institutions established in free zones that are not governed by existing bankruptcy provisions. It does not apply to companies registered in the DIFC and the Abu Dhabi Global Market, or to private individuals.

The law will establish the Committee of Financial Restructuring (CFR), a new regulatory body which will oversee the procedures of financial restructuring outside the scope of the courts, have responsibility for the appointment of experts in the field of financial restructuring, and establish and maintain a national electronic database of individuals who have had bankruptcy rulings against them.

 

UAE Bankruptcy Law

Creditors will be able to initiate insolvency proceedings against companies or traders in cases where debts of Dh100,000 or more are unpaid for more than 30 days.

Insolvent companies will be able to avoid liquidation via four pathways set out in the new law, namely financial reorganisation, a pre-emptive settlement, financial restructuring and the raising of new funds.

The law also contains provisions blocking creditors from applying criminal charges against executive of insolvent companies for bounced cheques, when the company is undergoing a court-mandated restructuring process.

The approval of the new law drew praise from the country’s legal community.

"The law is a very important step for the creation of a healthy, transparent commercial environment in the UAE," said Essam Al Tamimi, senior partner at Al Tamimi and Company.

"In a nutshell it says that companies and traders have to pay what they owe or face consequences, while also giving them options for rescue and restructure where there is a realistic and constructive plan in place."

Mark Beer, chief executive of the DIFC Dispute Resolution Authority, said the approval of the new law was evidence of the efforts and commitment of the leadership of the UAE in ensuring that the country’s laws reflected the needs of a dynamic business environment.

"Working with the DIFC Courts and the Dubai World Tribunal, which also have the benefit of excellent restructuring regimes, I have seen first hand the benefits of a trusted and effective restructuring law in ensuring creditors are paid, jobs are protected and a business has the protection it needs to thrive," Mr Beer told The National.

"May I applaud all those who have worked so hard to bring the new federal law to this stage."

UAE Penal Code to replace jail terms for minor offenses with community service

Changes have been introduced to the UAE Penal Code to replace jail terms for minor offenses with community service, according to a new law.

Community payback such as cleaning the streets, schools or other voluntary work will be determined in a decision by the Minister of Justice, in agreement with the ministers of Interior and Emiratisation and Human Resources, according to the new law issued by President His Highness Shaikh Khalifa Bin Zayed Al Nahyan last month.

Community service of up to three months will replace punishment for minor offences that would have otherwise been punishable by not more than six months or a fine, states the new law which will take effect from next month. Public prosecutors will oversee implementation of the community service and receive reports on the offenders’ performance.

The court, on recommendation from prosecutors, may order a jail term similar to the community service period if the offenders fail to discharge their duties during the community payback period.

In 2009, the Cabinet approved the federal law of alternative punishments which lists 20 offences that call for community service ranging between 20 to 240 hours.By applying the new code, the UAE will be the first among Arab countries to adopt such a type of law.

Legal experts said the move towards restorative justice or alternative sentencing means that some offenders avoid imprisonment with its many unwanted consequences. They deem it beneficial for society, as it may prevent them from getting into the so-called revolving door syndrome, the inability of a person to get back to normal life after leaving prison, becoming a career criminal. Furthermore, experts say, there are hopes that this could alleviate prison overcrowding and reduce the cost of punishment.

The community service may include unpaid work or community payback, house arrest, curfew, mandatory treatments and programmes (drug or alcohol treatment, psychological help and regular reporting to an official).Meanwhile, the new law provides for tougher penalties for crimes committed in a state of war and acts of terror.

• Under the law, a citizen who joins in any way the armed forces or security institutions of an enemy in a state of war with the UAE will face execution.
• The capital punishment will also be handed down to those who commit any crime to undermine the sovereignty, independence and integrity of the nation.
• Deliberately acting against a foreign country with a purpose to harm diplomatic relations of the country or endanger its citizens, employees, money or interests, will be punishable with a life sentence.
• Insulting the president of the UAE will carry a jail term ranging between 15 and 25 years and a fine, according to the new law.

• Capital punishment or life sentence will be handed down to those who set up, run or join any organisation, group or gang plotting to overthrow the government and seize power in the UAE. Promoting these organisations verbally, in writing or by any other means, will carry a jail term ranging between 15 and 25 years.
• Abusing religion to entice sedition verbally, in writing or by any other means, will carry a jail term of not less than 10 years.

National icons

Insulting the UAE, its flag, national logo, leadership or institutions will carry a jail term ranging between 10 and 25 years and a fine of at least Dh500,000.

Publishing false news, statements or rumours with a purpose of terrifying the people or harming public interest will carry a jail term of at least one year.

Making, importing, exporting or possessing pornographic material will carry a prison term of up to three years or a fine of at least Dh5,000 or both.

Gambling
Gambling will be punishable by a prison term of up to two years or a fine of up to Dh50,000. The penalty will be stiffened to three years in jail and a fine if the crime is committed in public or a place designed for gambling.

Prostitution and abuse

Those who set up or run a brothel for prostitution will be penalised by a prison term and a fine of at least Dh100,000.

The law makes it a criminal offence to swear or use abusive language against a person, punishable by a prison term of up to a year or a fine of up to Dh10,000. The penalty will be increased to up to two years in jail or a fine of up to Dh20,000 or both if the swearing was against a public officer. Publishing of swearing or use of abusive language will toughen the penalty, according to the law.

• Torturing, mistreating or failing to provide due care to a pet will carry a fine of up to Dh5,000.
• Trespassing will be punishable by a jail term of up to one year or a fine of up to Dh5,000.
• Failing to pay the bill for your hotel stay, a rental car, or dine and dash without paying in a restaurant will be punishable by a prison term of up to six months, or a fine of up to Dh5,000 or both.

UAE opens consulate in Kerala

The UAE has opened a Consulate General in Kerala, India, and appointed Jamal Al Zaabi Consul-General to Kerala, to further ties between the two countries.

The opening of the second UAE consulate in India comes within the context of bolstering the growing relations between the two countries, UAE Ministry of Foreign Affairs and International Co-operation said.

"I am delighted to announce the opening of the new UAE consulate in the Indian state of Kerala. It represents an important achievement and a new boost for bilateral relations between the two friendly countries," said Under-Secretary at the UAE Ministry of Foreign Affairs and International Co-operation, Mohammed Mer Al Raisi, in a ceremony in the presence of Kerala Governor P Sathasivam, Kerala Chief Minister Pinarayi Vijayan, Assistant Under-Secretary for Consular Affairs at the UAE Ministry of Foreign Affairs and International Cooperation Ahmed Elham Al Dhaheri, Ambassador of the UAE to India Dr. Ahmed Abdulrahman Al Banna, a delegation from the Ministry of Interior and a group of notable political figures and businessmen from the UAE and India.

The opening of the consulate in Kerala is aimed at furthering co-operation and partnership between the two countries in the business sector and trade and economic cooperation as well as at the level of social and cultural exchange, he added.  

In collaboration with the interior ministry, the consulate will provide visa services for UAE citizens visiting Kerala and southern India, as well as residents of Kerala in particular, Al Dhaheri said, and noted this would further facilitate and speed up the entry of Indian workers to the UAE via e-gates at the country's points of entry.

Kerala, he said, is a global business and trade hub and an integral part of the fast-expanding partnership between the UAE and India. This achievement would enable the two countries to continue to build strong relations in Kerala, an important economic partner of the UAE, he added.

"We have a lot in common, from trade and investment to workforce. A large number of workers, who come to the UAE every year to realise their job ambitions and improve their living standards in our country, hail from Kerala, UAE Consul-General to Kerala Jamal Al Zaabi said.

The new consulate will play an effective role in bolstering ties with India through enhanced trade relations and increased cultural exchange and cooperation between the UAE and Kerala, he added.

The UAE Consulate General in Kerala will support the partnership between the two countries in the government, business and social sectors, consular services, diplomatic documents as well as resources for trade and exchange between them.

Non-Competition clauses in U.A.E Labour law

U.A.E Labour law permits non-competition clauses to be included in a contract of employment as a way of protecting a business, and while they are legitimate, such post-termination restrictions can be difficult to enforce.

 Article 127 of UAE Labour Law specifically states that where an employee performs a role which allows him to become familiar with confidential information, the employer may put in place an agreement with provisions that prevent an employee from working with a competing business. But there are limitations. Any non-compete clauses must be reasonable and must only limit conduct in a way that is necessary to protect legitimate business and legal interests. The clauses must be limited in duration, geographical scope and the nature of the restriction. Restrictions of more than six months are unlikely to be upheld and the employer would have to prove that they have been disadvantaged in some way.

A non-competition agreement may be signed before or during the term of the employment, but as per the law, it will only come into effect on termination of the employment contract. The employers may include a clause in the labour contract or sign an additional agreement banning the employees from working for competitors for a certain period.

In order to apply non-competition clause certain conditions, have to be fulfilled. The agreement shall be, as far as time, place and nature of work are concerned, limited to what is necessary to protect the legal interests of the employer. If the job assigned to the employee allows him to know the secrets and know-how of the employer’s business dealings, then the employer may impose non-competition clause

To impose a non-competition clause against an employee, the non-competition agreement signed between the parties is to be restricted as per the provisions mentioned in the UAE Civil Code and the labour law. Such a stipulation shall not be valid unless it is clearly restricted to certain time, place and type of work, in a sufficiently determined manner so as to constitute a real protection of the legitimate employer’s interests. If the employer terminates the employee or the employee terminates the contract due to a reason that is ascribed to the employer’s fault, then the non-competition conditions shall not be applied against the employee.