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Dubai extends DIFC Court Jurisdiction

Guiding Principle

This Article introduces the recent changes in the jurisdiction of DIFC Courts. The jurisdiction is now open to agreements of the parties allowing them to benefit from the common law jurisdiction. This brings advantages for the party but creates new problems with local courts.

I. Introduction

On 31 October 2011 his Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, signed a law allowing any businesses to use the DIFC Courts to resolve commercial disputes. The courts are part of the Dubai International Financial Centre (DIFC), which is a Free Zone inDubai. The new law amends Dubai Law No. 12 of 2004, which regulates the jurisdiction of DIFC Courts.

II. Old Regulations

Before, DIFC Courts had only jurisdiction over:

  • Civil or commercial cases and disputes involving the DIFC or any of the DIFC’s Bodies or any of the DIFC’s Establishments.
  • Civil or commercial cases and disputes arising from or related to a contract, that has been executed or a transaction that has been concluded, in whole or in part, in DIFC or an incident that has occurred in DIFC.
  • Objections filed against decisions made by the DIFC’s Bodies, which are subject to objection in accordance with the DIFC’s Laws and Regulations.
  • Any application over which the Courts have jurisdiction in accordance with the DIFC’s Laws and Regulations;

III. New Changes

Under the new rules, parties can agree to resolve their disputes now in DIFC courts. This agreement has to be made expressively and in written form. Beside the choice of court the agreement can include the language for the hearing (Arabic or English), the applicable procedure (civil- or common law) and which authority shall hear the case (Court of First Instance, the Small Claims Tribunal, the Court of Appeal). In other words, parties wherever located are free to opt now to choose the jurisdiction of the DIFC Courts and elect them to adjudicate their dispute.

IV. Advantages

The new regulation will allow companies and private persons to let international law firms handle their cases directly and have the cases heard by international experienced judges, some with knowledge in specific fields of law like maritime or real estate law. Furthermore the court can award justified legal cost, including the cost of the lawyer. The DIFC Courts are also one of the most advanced commercial courts in the world, employing new technologies including electronic case management and video-conferencing, which makes procedures faster and more efficient.

V. Problems with the Changes

However the new extension of the jurisdiction of DIFC courts is not without critics and problems.

1. Conflict with local Courts

The new choice of law and especially law procedure deepens a conflict in the otherwise uniform law system of the UAE. The English common law is foreign to the civil law system in the UAE and instead of improving the standard in the local courts, this increases the conflict, as it is expected that more and more companies will chose to avoid local courts. The DIFC court already became the home of the Dubai World Tribunal, a panel established to hear disputes arising from the state-backed conglomerate’s debt restructuring, which local courts were seen unfit to rule over.

2. Problems with Enforcement

It is also unclear to what extend courts and jurisdictions of other emirates and other countries will recognize judgments from DIFC courts. While there is a clear regulation for Dubai courts, there is no regulation on the federal level.

How ever the DIFC Courts remain committed to cooperating with other Courts in the region and beyond. The DIFC Courts signed a number of Memoranda of Understandings with other bodies to work together towards furthering judicial excellence and innovation. There are regular meetings with judicial bodies from across the region, including Qatar and Bahrain, in an effort to work together more closely.

January, 2012 Tobias Speer
Meyer-Reumann & Partners, Dubai Office

Trademark Protection at Dubai Customs

Guiding Principles

Taking action against trademark infringements through Dubai Customs is an additional option for trademark owners to fight violations of their intellectual property rights. The additional registration procedure at Dubai Customs should be taken into consideration as it is evident that most of the infringing goods are not produced within the UAE, but are imported. Dubai Customs may stop infringing products before entering the country.

A. Intellectual Property Rights at Dubai Customs

It is significant that shipments are checked at ports, airports and free zones in order to prevent counterfeited goods from entering the UAE. Therefore and since 2006 Dubai Customs is operating a special section for intellectual property rights.
There are two main scenarios in which a complaint to Dubai Customs regarding suspected infringing goods may arise:
1. Dubai Customs discovers suspected infringing products in the course of its regular inspections.
2. The trademark owner discovers a suspect shipment or suspect goods and notifies Dubai Customs.

I. Registering a Trademark at Dubai Customs
With reference to the first scenario the Intellectual Property Right Department at Dubai Customs recently invited trademark owners in the UAE publically to register their trademarks at Dubai Customs. The registration procedure aims to facilitate trademark protection in Dubai. However, it does not replace an initial trademark registration at an official trademark department. By additionally registering a trademark at Dubai Customs the trademark owner enables the customs authorities to detect counterfeited trademarks more quickly, as all trademark-related data is filed and archived. Accordingly, Dubai Customs can intervene at the first entry of goods heading to Dubai, making the intellectual property right protection more efficient. The trademark registration system is linked to all customs centers. This enables that the Customs Inspection Section can identify the owner of the trademark immediately, eliminating the need to refer to him.

The possibility of registering a trademark at Dubai Customs has been in place since 2006 and the number of registrations is increasing. Dubai Customs informed that so far 926 trademarks were registered at Dubai Customs by their owners or the authorized legal representative. American trademarks top the registered trademarks list by 28%, followed by the French trademarks by 12%, then Swiss trademarks by 11%, whereas Emirati trademarks do not exceed 3% of the total registered trademarks at Dubai Customs.

In order to register a trademark at Dubai Customs a copy of the valid trademark registration certificate must be provided and administrative fees must be paid. Registrations can be performed by trademark owners or authorized legal representatives in the UAE. Any representative must first register with the Ministry of Economy and submit a duly authenticated and translated power of attorney.

II. Trademark Owner may take Initiative
The second scenario shows that trademark owners or their representatives may also file report infringements of a trademark to Dubai Customs. In order to file a complaint it is not necessary to have the trademark registered at Dubai Customs. Nevertheless, a registration will facilitate the filing procedure.

B. Dubai Customs’ Procedure
In both cases a formal written complaint of the trademark owner (or his representative) is required before Dubai Customs may become active. Typically, the procedure following the filing of a complaint is that Dubai Customs takes a sample of the suspect goods from the shipping consignment or from the free zone location where it has been discovered and submits the sample to an official laboratory for testing and determination whether the product is genuine. In case the laboratory confirms that the item is not authentic, Dubai Customs will confiscate the suspect goods. After confiscation the goods will be destroyed.

C. Effects
This procedure was established in order to protect both the consumers as well as the trademark owners by safeguarding that standard specifications are met and by maintaining the legitimate trade movement through protecting trademark owners’ rights.

Dubai Customs informed that lately a large amount of confiscated fake and restricted goods were destroyed. The destroyed goods included fake products with duplicated trademark such as ties, glasses, glasses boxes, perfumes, mobile phones accessories, pens, balls, cars spare parts and electronics, auto electrical chargers, screwdrivers, printers requisites. In addition, a large number of CDs – especially software – and some medicine were destroyed.

January, 2011 Lena Brand
Meyer-Reumann & Partners – Dubai Office

New Rules and Changes on the UAE-Labour Market

New Rules and Changes on the UAE-Labour Market

Guiding Principles

Starting from January 1st, 2011 several changes took place by the Ministry of Labour issuing new rules for labour and resident permits and the opportunity to switch employers more easily. The following Article will show the recent amendments to the UAE-Labour Law which became effect with the new year 2011.

I. Validity of Residence and Work Permit decreased to two years
A cabinet decision at the end of 2010 reduced the validity of the residence visa and therewith the validity of the work permits for all employees in the private sector from formerly three years to two years. This new rule was implemented in January 2011.

This new decision is in effect starting from January 1st, 2011 and applies only for visa which will be applied from January 2011 onwards. Visa’s already issued before January 2011 (including family visa and husband/wife sponsored visa) are still valid for three years. Only when it comes to the renewal of the residence and work permit, the renewed visa will have a validity of only 2 years.

II. Non-Objection Certificate requirement removed
As part of the ongoing reforms in the labour market, the Ministry of Labour introduce starting from January 1st, 2011 a new regulation that foreign workers whishing to change their jobs do not require a Non-Objection Certificate (NOC) and approval anymore from their former employer. With Ministerial Decision No. 1186 of 2010 employee will have the right to change jobs without facing a six-month ban and without the need of a Non-Objection Certificate in the following cases:

  • The employment contract ends or is terminated mutually and the employee worked for at least 2 years;
  • The Employer fails to comply with his legal or contractual obligations;
  • Expiry of a work relationship where the termination is due to economic or legal issue.

In case one of the above mentioned cases applies, a new work permit will be granted without considering and facing the six-month ban.

An exception to this new rule are employees employed under a limited employment contract where the agreed contract period is more than 2 years. Where an employment contract is entered on a fixed term, it cannot be terminated or breached by the employee on the grounds that they have completed two years of service. If those employees are called to cancel their labour permit they will be subject to a one-year ban according to the terms of the contract. In case the employment contract is entered for an unlimited period and the employee completed two years with the same employer, these employees will be free to change their jobs without objection.

January, 2011 Hanka Jahn
Meyer-Reumann & Partners – Dubai Office
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