Dubai World – government releases details of a tailor-made restructuring process
In the wake of the high profile financial problems affecting the Dubai World group, the Dubai government has announced a new reorganisation law in case that group is unable to achieve an acceptable restructuring of its debts. New legislation was needed because the status of Dubai World as a company incorporated under special legislation means that the UAE insolvency laws do not apply to it. The new legislation:
- establishes a tribunal comprising three judges taken from the courts of the Dubai International Financial Centre (the DIFC) to oversee the restructuring process; and
- creates a legal framework for the financial reorganisation based on the laws of the DIFC.
This is an interesting legal development because the laws and the legal system of the DIFC do not usually apply outside of that freezone to entities and activities carried on in the mainland UAE.
Please see the Herbert Smith e-bulletin from December 2009 which discusses the role and powers of the specially constructed tribunal.
New dispute resolution centre launched in Bahrain
The Kingdom of Bahrain has launched a new dispute resolution centre to be known as the Bahrain Centre for Dispute Resolution, in joint venture with the American Arbitration Association. The aims of the centre are to provide public and private arbitration in Bahrain for international claims as a new potential choice of forum in the Middle East. To ensure its independence from the Bahraini legal system, the BCDR has been created within an "arbitration freezone" so that awards made by a tribunal of the BCDR will be free from challenge before the Bahraini courts if the "seat" of the dispute is in another jurisdiction.
In addition, the Bahraini government has legislated to move certain high value commercial claims falling within the jurisdiction of the Bahraini courts to the BCDR for a "statutory arbitration" process, depending on the identity of the parties to the dispute. The awards made will be final and binding and deemed to be a ruling of the Bahraini courts, which follows from the majority of the judges in these cases being selected by the Supreme Judicial Council (which supervises the judiciary in Bahrain). This is a significant legal development because it imposes arbitration procedures on commercial disputes falling within the jurisdiction of the Bahraini national courts, irrespective of the intentions of the parties.
Please see the Herbert Smith dispute resolution e-bulletin for further details on the BCDR-AAA.
Draft business laws in their final stages in the UAE
The Emirates Securities and Commodities Authority has stated that a new corporate law requiring listed companies in the UAE to exercise full transparency and making it compulsory for listed companies to abide by all ESCA rules and regulations will be introduced by April 2010. Separately, it has been reported that the UAE Minister of Justice has stated that a number of new business laws are in their final phases before being referred to the Federal National Council for discussion, including laws relating to competitiveness, bankruptcy and company law.
New Kuwaiti private sector labour law due to come into force
A new labour law for private sector employers and employees has been approved by the Kuwaiti parliament. The new law is reported to include provisions for redundancy pay and a right of transfer between sponsors, as well as improved maternity rights and a requirement for large employers to provide childcare facilities. A mandatory three month notice period is also said to be included in the law for employers wishing to terminate employment contracts.