UAE Federal Traffic Council seeks ban on Passenger Minibuses

UAE Federal Traffic Council is seeking a ban on passengers in minibuses by January 2018, a top official said on Wednesday.

Major General Mohammad Saif Al Zafein, Assistant Chief for Operations Affairs at Dubai Police, and Director of Federal Traffic Council said that the council issued a recommendation to stop renewing the registration of minibuses for passenger transportation and only allow them to transport goods.

“We want to ban minibuses from transporting passengers. We have sent a recommendation to Ministry of Interior to ban the minibuses and hopefully, the suggestion will be active law by January 2018,” General Al Zafein said.

He said minibuses will be registered only if they are used for other purposes, such as transporting goods.

He said that Lt Gen Shaikh Saif Bin Zayed Al Nahyan, Deputy Prime Minister and Minister of Interior, had asked the council to cooperate with the Ministry of Health to conduct a study on the minibuses, especially the psychological side of the drivers. “Our suggestion to ban the minibuses from transporting passengers came as a result of the study which recommended to use it only for transporting goods,” Major General Al Zafein said.

Ten people were killed and 152 injured in 79 traffic accidents caused by minibuses last year. Dubai Police said the death toll reached 198 in 2016.

“The number of deaths on roads is increasing and minibuses are not a transportation vehicle. We see accidents due to over-speeding and packing such vehicles with people without safety measures taken into consideration.”

He continued: “Sometimes it’s the speed, the dangerous swerving or simply the driver being exhausted and half asleep at the wheel with people packed away in these killing machines on wheels. This cannot go on.”

“Minibuses, which are normally designed to carry 14 people are sometimes packed with 16 to 18 people, making it unsafe due to overcrowding and unstable when the driver is speeding. In many cases, the vehicles are overcrowded and unfit to transport people safely.”

He said that if there is a situation, there are no emergency exits, unlike regular buses, to facilitate escape.

In a major incident in July last year, a Toyota minibus carrying 20 people crashed into a stationary lorry on Emirates Road in Dubai, killing seven people and injuring 13.

Minibuses were banned from transporting schoolchildren in 2013.

UAE's new bankruptcy law an advantage for business

U.A.E businessmen will no more have to face arrest or legal prosecution for unpaid debts, nor do they have to flee the country - as many had done in the past- to avoid jail term following the implementation of the landmark UAE insolvency law, legal experts and analysts said.

However, since the law, which came into effect by end-2016, is applicable only to commercial firms, government-owned companies and individual traders, non-trader individuals who are unable to repay their debts will not get protection from arrest under the law. In other words, insolvent individuals will not be able to resort to the new bankruptcy law to avoid criminal prosecution. As a result, cases of personal bounced cheques will remain subject to the general rules under the UAE Civil Code, experts said.

The new legislation, which applies to all onshore and free-zone companies in the UAE - with the exception of companies in the financial free zones - will offer protection for employees, shareholders and directors of companies undergoing court-led insolvencies, experts said at a "Technical seminar on UAE's new bankruptcy law".

The seminar was organised by The Institute of Chartered Accountants of India (ICAI) - Dubai.

The new bankruptcy law contains 230 articles and offers creditors and debtors increased flexibility in dealing with financial distress while ensuring certainty and security for business owners and investors, who can rely to some extent on protection for their businesses during a restructuring. It will also enable them to effectively negotiate with their creditors, they said.

Following the implementation of the law, there is no need to set up special tribunals as in the past to deal with the insolvencies of large companies.

"With proper insolvency regulations, businessmen will no more have to face arrest or legal prosecution for unpaid debts nor do they have to flee the country to avoid arrest as many had done in the past," experts said.

Legal experts said the new law, which repeals much of the previous bankruptcy regime laid down in the Commercial Transactions Code (CTC) which was in existence since 1993, primarily involves four new procedures, each of those supervised by the court. These include a 'light touch' rehabilitation process for solvent debtors facing financial difficulties called "the preventative composition;" a more substantial rehabilitation process for insolvent debtors - the restructuring scheme; an end-of-the-line insolvent liquidation process, and a framework for the financial restructuring of financial institutions.

As per the new law, criminal proceedings in connection with dishonoured company cheques drawn by the debtor prior to the commencement of the relevant process stay once a preventative composition or restructuring scheme has been initiated. "However, misuse of this protection may result in criminal liability for a fraudulent insolvency offence."

Dr Habib Al Mulla, chairman of Baker & Habib Al Mulla, who was a keynote speaker at the seminar, said criminal actions filed for dishonoured cheques would be suspended if a "preventive composition plan" or "debt restructuring plan: is initiated. In this case, the cheque holder becomes one of the unsecured creditors.

"This may encourage distressed businesses to initiate composition plans and potentially consider filing for bankruptcy and debt restructuring rather than prompting a member of the management to abscond and exit the UAE."

"Under the new system, the ability to seek new financings is reinforced. Provisions in the new law are more flexible compared to those the CTC. More powers are attributed to bankruptcy trustees who are nominated by debtors under the new regime. "This may potentially reduce the court' involvement and lead to a smoother and more efficient process," said Dr Al Mulla.

He said the much-needed federal bankruptcy law has indeed brought a level of modernisation and reform, although it has its shortfalls. "However, real assessment of the successful impact of these laws will depend on how they are used and how much they will improve the business and investment climate in the UAE."

Christian Saunders, the partner of Allen & Overy LLP, who was also a speaker at the seminar, said the new law is focused very much on rehabilitation. For the first time workable 'cram down' processes that allow courts to modify loan terms are available.

"Likewise, the new law imposes mandatory timelines for the completion of the processes. While the new law is not perfect in every respect, it represents a significant improvement on the existing legal framework."

Only a debtor can apply to the court for a preventative composition. This procedure appears to be intended to be used at the early stages of financial distress to provide breathing space to a debtor facing initial financing difficulties. The aim of the process is rehabilitation supervised by the court.

A restructuring process may be commenced by a debtor where it has failed to meet its debts as they have fallen due for a period of more than 30 working days as a result of financial difficulties or where such debtor is balance sheet insolvent. The process may also be commenced by an unsecured creditor owed a debt of more than Dh100,000 that is more than 30 working days overdue following a formal demand by the creditor.

In the case of a court ordering an insolvent liquidation, the debtor (or presumably its board if it is a company) may no longer participate in any commercial activity. An official or insolvency trustee shall be appointed by the court to manage the debtor or its business. The court-appointed official or insolvency trustee is tasked with determining the indebtedness of the debtor and monetising the debtor's assets under the court's supervision.

"The new law represents 'evolution not revolution', but constitutes a significant improvement on the existing framework. Implementation will be critical, however - whether the new law is a success or not will depend almost entirely on the approach taken to it by the local courts - will they abide by the spirit of the law, and bring in best international practice," said Saunders.

Pankaj Mundra, chairman, ICAI UAE (Dubai), said the new law embodies a sea-change in the method to the treatment of debtors in the UAE and presents significant implications for the administration of the procedures set out in the Law.

"The removal of the criminal offence of bankruptcy by default, provisions for bounced cheques and new requirements for creditor-initiated insolvency proceedings are likely to be helpful."

The previous insolvency regime, which was set out in the CTC, was largely untested and much criticised by practitioners and market participants.

"In short, it was regarded as cumbersome and unsuitable for a modern dynamic economy with prevalent sophisticated financial products and institutions. It appeared to serve neither the goal of prompt and efficient liquidation nor the goal of corporate rehabilitation," Allen & Overy legal experts said.

The World Bank has calculated that on average an insolvency process in the UAE results in a recovery for creditors of less than 30 cents on the dollar, takes 3.2 years with a cost of the estate of 20 percent of the estate. If you compare that to, say Singapore or the United Kingdom with figures for recovery of 88.7 and 88.6 cents on the dollar, taking 0.8 and one year, with a cost of four and six per cent. 

New law will see justice dealt out of court in Dubai

Minor cases will soon be settled quickly outside court as part of a new law intended to streamline judges’ workloads.

In some misdemeanour cases such as low-value bounced cheques or drinking alcohol without a licence, prosecutors can issue an order similar to a court’s verdict and issue fines of about half the amount a court would have imposed.

The law will come into effect within three months and follows the success of a one-day court in Ras Al Khaimah, which has led to some cases being resolved in less than an hour.

Plaintiffs go directly to the judge’s office at RAK Courts to press charges, summon their opponents and receive a verdict as quickly as possible.

The new law will not apply to all types of misdemeanours.

Dubai’s attorney general is drawing up a list of petty crimes that prosecutors will be able to handle quickly.

Once issued, a judicial order can either be accepted or rejected within a week by those involved. If the order is rejected, both parties can insist on having the case referred to court.

Senior prosecutors will be assigned by the attorney general to revise all judicial orders and amend or cancel them within seven days.

The new law says the aim is to "secure speedy settlements that are in line with the legal process, curbing the number of criminal cases referred to court and to simplify legal procedures and save time, as well as effort and costs".

Judge Ezzat Abdullah praised the law as a great addition that would noticeably reduce the number of cases heard in courtrooms every day.

Yousef Al Bahar, from Al Bahar Advocates, said similar laws had been introduced in other Arab countries.

"This will contribute to further take Dubai towards excellence," Mr Al Bahar said.

Emirati lawyer Eman Al Rifaee agreed: "This is great. Some cases are not worth taking to court and this will free judges to handle other cases without being tight on time owing to a large number of cases they hear every day."

Unified rental contract from March 2017 in Dubai

From next month March 2017 onwards, all of Dubai's property lease contracts will have a unified structure, according to the Land Department. The "Unified Lease Form" is designed to "regulate relationships between all parties involved in such transactions and guarantees the rights of all parties," the agency said.

Landlords will have to download and print contracts from the Ejari website and must provide assurance that all items included within are based on a legal framework that regulates the transactions. Items within the contract will thus be governed by applicable laws, including those related to rents.

If any omissions are subsequently found, there is provision for penalties to be applied. Parties to the contract agreement should agree on the items before signing the lease.

According to Hamdan Al Madhani, Director of Rental Relations Regulatory Department, “The applied unified lease form primarily depends on the legal system, and having unified contracts between the parties guarantees the rights of all stakeholders involved.

“The Rental Affairs Sector carries the responsibility to apply the new unified lease contract, in addition to registering leases and tracking the real estate index."

As per Law No. (26)  (under clause No. 16), the landlord is responsible for maintenance repair, and repair of any damage or defect that may affect the well-being of the tenant within the premises, unless otherwise agreed.

Therefore, there cannot be a clause forcing the responsibility on one party alone. Law No. (2) is one of the references used to draft the unified contract. The document also refers to Law No. (33), which regulates the relationship between landlords and tenants, specifically clause No. (25), which specifies the cases that enable the landlord to request an eviction.

These can include subleasing of the property, or in the case of using the property for carrying out prohibited or illegal activities.

India Goverment discontiued pension scheme for NRIs

Pension scheme for Indian workers living abroad has been discontinued by the Government of India citing poor response.

The scheme, Mahatma Gandhi Pravasi Suraksha Yojana (MGPSY), was launched in the UAE in 2012 in its pilot phase before introducing it in 16 other countries. The objective was to encourage and enable the overseas Indian workers by giving government contribution to saving for their return and resettlement (R&R), save for their old age, obtain a life insurance cover against natural death during the period of coverage.The foreign office is discontinuing three initiatives - a pension-cum-life insurance scheme, short-term academic courses, and a business opportunities platform - a year after it took charge of overseas Indian affairs, according to a report in The Telegraph.

The pension scheme was the only initiative representing the blue-collar workers living abroad but it failed to attract a huge number of subscriptions. Officials speaking to The Telegraph attributed the lack to demand to the refusal of both, the current Narendra Modi administration and the former Manmohan Singh government to popularise the scheme.

According to the scheme, if a male subscriber deposits Rs 5,000 annually under the scheme (Rs 1,000 through the National Pension System and Rs 4,000 through the UTI Monthly Income Scheme) he would stand to receive Rs 1,000 from the government as a contribution towards his pension and Rs 900 towards the MIS each year. Women could avail Rs 2,900 as government contribution annually (Rs 2,000 for the pension and Rs 900 for the MIS.)

The scheme also sheltered the subscribers with free cover from the Life Insurance Corporation of Rs 30,000 in the case of natural death, Rs 75,000 in the case of unnatural death or permanent disability due to an accident, and Rs 37,500 for partial disability.

The investment had to be made for five years or the duration of employment abroad, whichever is shorter. Once back in India, the worker would get the total sum in their MIS account, coupled with the interest earned, as a lump sum. The pension remains in their account, accruing interest till the worker turns 60 and they can avail the money monthly.