СТА - ведущая юридическая компания в Дубае с офисами по всему мируhttps://www.stalawfirm.com/ru.htmlSTA Law Firm - Блоги - Agency LawruCopyright 2024 STA Law Firm All Rights Reserved<![CDATA[New Commercial Agencies Law in the UAE]]> New Commercial Agencies Law in the UAE

The Old law was seen to be more in favor of the agents; giving a better legal stance for agents compared to that of principals. Notwithstanding, the New law comes with the spirit of striking harmony among principals and agents. Furthermore, the New law is vigorously dependent on provisions contained in agency arrangements. Absence of which the provisions of the New law will apply in full.

Federal Law No. 3 of 2022 came into force on 15th June 2023 and introduces various significant changes lined up with the United Arab Emirates (UAE's) progressing endeavors to facilitate the way of carrying on with business in the UAE. The previous commercial agency system in the UAE was represented by Federal Law No. 18 of 1981 Regulating Commercial Agencies and the amended Old Commercial Agencies Regulation in 2006, 2010, and 2020. The issuance of the New Commercial Agencies Regulation is certainly the main change to date, making a more adaptable and balanced relationship between agent and foreign principal.

The new law introduces significant changes to the law relating to business offices, showing a move towards flexibility, and possibly reassuring more prominent foreign investment. notably, the New law grants the right for worldwide companies that are not owned by UAE nationals to apply to act as agents for products they own that are not subject to a commercial agency and considers the early termination or non-renewal of commercial agency agreements, dependent upon specific conditions being met.

Key changes in the New Law

Commercial agents: The scope of who can act as a commercial agent has enlarged. The New law reaffirms the common rule that only UAE national individuals, 100 percent UAE owned companies, or public joint stock companies (which are no less than 51% UAE owned) can act as commercial agents. Be that as it may, interestingly, the cabinet may now permit global companies not owed by UAE nationals to act as agents for products they own and sell directly into the UAE market, provided specific rules are met.

Contract term: The New law presently requires a minimum agreement term of five years in the event that an agent is expected to lay out buildings for display, goods stores, or facilities for maintenance or repair.

Termination/Notice: A principal's termination right has been extended. Under the Old law, a principal couldn't terminate or decline the renewal of a registered commercial agency without a "material reason". in proving a "material reason" was troublesome, with endeavors frequently resulting in compensation for loss/damages granted to the registered agent. This was to a great extent the motivation behind why principals avoided their commercial agencies registered. This limitation has now been eliminated, and termination can happen in the accompanying conditions:

  • Upon expiry of the agreement term (unless renewed);
  • By the will of either party, as per the terms of the commercial agency contract;
  • By the arrangement of the parties before the expiry of the agreement term;
  •  A termination notice is served to the other party at least one year preceding the proposed termination date, or before the lapse of half of the agreement term, whichever is less.
  •  

    Despite the fact that there are broader grounds for lawful termination, the provisions examined above in relation to expiry and early termination won't immediately apply to:

  • any arrangements currently in force at the time of issuance of the New law - until 15 June 2025 (being two years from the date of the New law's entry into force); and
  • any arrangements: (i) that have been registered with the same agent for over a decade; or on the other hand (ii) in which the volume of the agent's investment surpasses AED 100,000,000 - until 15 June 2033 (being a decade from the date of the New law's entry into force)
  • Dispute resolution: Under the Old law, only the Commercial Agencies Committee and UAE courts had jurisdiction over disputes, and any agreement against the norm was void. The New law gives new adaptability by permitting parties to allude to disputes to arbitration.

    Goods during a dispute: During a dispute, and with the Ministry of Economy's approval, principals might keep on carrying goods and services into the UAE by means of exclusive sources other than the agent.

    Compensation: An agent can guarantee compensation for the damage it has brought about:

  • Termination of the agreement which has not been renewed (except if the agreement explicitly states otherwise)
  • Early termination
  • Conclusion

    The changes introduced with the commercial agencies law are supposed to provide more support and solace to foreign investors in the UAE as it gives them greater adaptability, for example, the ability to elect a familiar global dispute resolution forum, terminate any commercial agency agreements more effectively and even register as commercial agents, would be advisable for them they meet the requirements specified under the New Law. Also, the New law is vigorously dependent on provisions agreed by the parties to the commercial agency agreement. Companies are therefore encouraged to give close consideration to drafting clear and unequivocal terms in the agency contracts.

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    Thu, 23 Nov 2023 00:00:00 GMT
    <![CDATA[Economic and Fraud Provisions in Middle East]]> Economic and Fraud Provisions in the Middle East

    "There is one and only one social responsibility of business – to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud."

    - Milton Friedman

    Economic fraud is a term that has been repeated over the years, so much so that the consequences it bears do not have any precedence or impact on the ones that hear it. For many companies and capitalist machinery, this term essentially triggers them to explore options to hide their fraudulent tracks and continue operating in the same manner. To have governments help them cover the tracks in certain jurisdictions ultimately defeats the purpose of the assignment.

    Despite the incongruent activities of individuals, companies, and governments from the expected norm of justice in many jurisdictions, other countries are tenacious to implement a regulatory framework that will eradicate such fraudulent activities in the market. This article will discuss the economic and fraud provisions established in the Middle East, their effectiveness, and the scope of reach it possesses about financial crime.

    What are the Economic and Fraud provisions in the Middle East?

    If one area of the economy has seen a steady increase in the past years, it would be the economic fraud prevalent in society. Regardless of the number of provisions that jurisdictions and international organizations establish to combat financial fraud, none of them seems sufficient. The parties involved in economic fraud and other fraudulent practices are constantly evolving to cover their tracks efficiently.

    Infamous scandals like Bernie Madoff and the Ponzi scheme leave one in absolute awe as it remains unclear, what is the culprit: the crime or the criminal? Many innocent parties, including employees and clients, were adversely affected by the ill-doings of these financial schemes. After the outburst of many scandals and its impact on many innocent individuals, jurisdictions are trying to fasten their pace to stay a step ahead of wrongdoers and hopefully eliminate the potential threats in the market.

    The introduction of new anti-economic fraud regulations has paved the way for potential investors to feel a sense of security over their investments within the market, along with the ability of the regulations to enforce justice. Over time, people have understood that the formation and establishment of an anti-fraud legal framework are not sufficient to ensure peace and harmony in the market, an iron fist must be imposed on fraudulent parties and companies to deter them from doing such activities in the future and serving it as a lesson for other participants in the market who bear similar intentions.

    The types of economic fraud can be quite varied and are spread across different industries and the scope of nature. These could include housing benefit fraud, tenancy fraud, council tax fraud, blue badge fraud, social care fraud, business rates fraud, insurance fraud, bribery, and money laundering. These are just a top layer of economic crimes prevalent in an ocean of fraudulent activities in the market. The crimes that are more coherent to the wrongdoings in the market include not declaring the business location, stating that a property is not in use while it is, dishonestly requesting for an exemption to pay for charges that are owed, or any unauthorized movement of money to make ill-gains.

    Often, economic crime is caused not by companies but by customers towards companies. The highest reported crime boost in the Middle East is through customer fraud and procurement fraud, which have proved to be the most disruptive fraud within an economic crime. In a survey conducted on a global platform, the number of customer frauds was comparatively more in the Middle Eastern region.

    In an ongoing effort to combat fraud together, many companies in the Middle East began investing in more stringent controls and implementation of the rules to avoid economic crime, while many others conducted a thorough examination into reasons after the occurrence of a crime in the company. Another issue that stands alongside customer fraud about its prominence is procurement fraud. This fraud entails the practice of favoring associates with vendor and supplier contracts.

    All these efforts are measures taken to mitigate the risks involved and ensure that proper prevention is taken by instilling the right technology and talent to deviate from any fraudulent prone routes.

    However, it is not easy to ensure that accountability will be maintained and transparent feedback is provided. Another limitation of this procedure is that advanced technologies to combat financial crime can be costly, which would further deplete if the company possesses insufficient resources to acquire and install the platform and is not equipped with properly trained employees to manage the technology. The lack of proper expertise to handle the in-place technology could attract various cyber threats, which allows a wrongdoer from any part of the world to infiltrate the company's system.

    With this in mind, companies must equip themselves from the arsenal of defenses to protect themself and the financial and reputational facets of the company. The extent of damage that infiltration of the company's system can cause to the operations is quite unfathomable. It would be better for companies to leave their vault of secrets wide open than installing an IT platform that is managed poorly. The necessity of combating such insecurities is proliferating and must be countered at the earliest. One would like to believe that the efforts of the legal jurisdictions in the Middle East to battle economic crime are practical and promptly applied. However, many of the jurisdictions still fail to provide a proper implementation of the provisions established against economic crime.

    The readiness of companies in the Middle East to confront the indecisive nature of economic crime and report any issues as they arise is still moving at a stagnant rate. The stark increase in cyberattacks and its potential threats is not a mystery to the companies in these regions. Nevertheless, they decide against preparing themselves in defense of such risks and attacks. The firms in the region and the governmental organizations must understand the types of threats that could arise in the economy and the nature of such economic crimes. Although this would seem like an insignificant step, this particular action could help achieve a more profound revelation of the gaps and vulnerabilities of the economy and its protective framework.

    Many would argue that the relationship of the Middle East with economic crime and fraud dates back ages. All the glitz and glamour and the boom of economies are incongruent with the fraudulent activities occurring within the firms and regions. A region's legal systems cannot enforce the regulatory frameworks established to fight against economic crime if the country's government does not implement the rulings.

    To know more about Economic and Fraud Provisions in the Middle East in Singapore Click here 

     

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    Thu, 30 Sep 2021 14:28:00 GMT
    <![CDATA[Commercial Agency Agreements in UAE]]> Commercial Agency and Distribution Agreements in the UAE

    "We become what we behold. We shape our tools, and thereafter our tools shape us."                                                                                                      ― Marshall McLuhan

    What is the difference indeed between using a commercial agency or a commercial distributor in the United Arab Emirates (UAE)? Principals (foreign companies and brands in this case) face difficult decisions day in and day out to this end. Companies tend to only rely on the tools they are equipped with to help make business decisions; however, in unfamiliar territory, new decision-making tools can expedite the growth of the business substantially and place you ahead of any competition. Every business leader will agree that knowledge is power, therefore, this article will aim to equip businesses, no matter how big or small, with the knowledge on the best route to introduce their products into the UAE with the support from a commercial agent or distributor, whichever suits the toolkit (company) best.

    A popular method of conducting business in the United Arab Emirates (UAE) is the formation of commercial arrangements with local and licensed agents or distributors. This is one of the primary methods of conducting business for companies based outside the country, who desires to sell their products in the UAE by foregoing the establishment of subsidiary companies in the region. Instead, companies based in foreign jurisdictions choose to contract with local companies and/or individuals, who may already have a well-established sale network in the country. In the UAE, such agreements can entail parties of two types: local agents and distributors. This section will deal with and analyse the presence of agents in the UAE, thus outlining the various facets of the legislation that governs the functioning for the same.

    In theory, such arrangements, which are known as commercial agency agreements, carry far less risk, and require minimal investment from the "principal party", the foreign commercial party that wishes to conduct "on-shore" business in the UAE (as compared to establishing local subsidiary companies). Commercial agency arrangements allow foreign businesses to leverage the invaluable local knowledge and experience that comes from having local agents, allowing the principal party to benefit from the agent's pre-existing relationships.

    However, whilst commercial agency agreements may seem to be of great advantage to the principal party, an understanding of the intricacies that govern local customs and laws on this matter, would ensure that the parties entering into agency contracts stay aloof of any misunderstandings or complications.

    UAE Legislation on Agency Law

    In the UAE, commercial agencies are governed by the Federal Law Number 18 of 1981 concerning "Organizing Trade Agencies" (as amended by Federal Law Number 14 of 1988, Federal Law Number 13 of 2006, and Federal Law Number 2 of 2010). This law is often simply referred to as the UAE Agency Law.

    Article 1 of the UAE Agency Law defines the terms "trade agency", and "principal" (primary parties to an agency agreement), as follows:

  • Trade Agency: It refers to the representation of the principal by the agent for the purposes of distribution, display, selling, or the rendering of a service or a commodity in the State (the UAE), for a profit or commission.
  • The Principal: It refers to the producer or manufacturer of the commodity, noting that the producer does not carry out any marketing functions himself in the UAE.
  • Pursuant to the provisions of the UAE Agency Law, commercial agencies must adhere to the following requirements with regards to their nature, and the nature of the agreement:

  • the agent must either be a UAE National or a company that is wholly owned by one or more UAE nationals (under article 2);
  • the commercial agent and the agency agreement must be registered in the Commercial Agency Register of the Ministry of Economy (MoE) (under article 3);
  • the agency agreement will only be effective if it is of a written nature, and is notarized (under article 4);
  • the agency agreement must specify the defined territory of the agency, within which it is allowed to operate (which can be one, several, or all of the Emirates), and that the agreement must grant the agency exclusivity to operate in that defined territory (under article 5).
  • Under the UAE Agency Law, the trade agent enjoys a wide range of privileges and legal protections. Once registered, trade agents are greatly protected under UAE laws. The UAE Agency Law provides for the following significant statutory protections for trade agents: -

    • the exclusive right to seek commission on all sales that are made within the aforementioned 'defined territory' in the UAE, irrespective of whether or not the agent contributes to those sales (under article 7);
    • the protection from termination or non-renewal of the agreement (i.e., even if the agreement was for a fixed term, and may have expired, it automatically gets renewed in perpetuity) (under article 8);
    • the right to restrict the principal party from replacing the current agent with a new agent (under article 9); and
    • the right to prevent any unauthorized parties from importing the principal party's products into the defined territory (under article 23).

    Of the aforementioned protections, perhaps the most important and contentious provision of the law is article 8, which safeguards the agent against termination. Under this article, the law only allows for termination under 'material reasons'. However, noting the limited number of cases in the UAE which have dealt with this matter, the definition of "material reasons" is unclear and vague. The reasons behind this are twofold: (a) most cases pertaining to the termination of contracts in the UAE are settled out of court, and (b) each case is decided independently from one another, and on the basis of its own facts (in most cases, the court assigns an expert to ascertain the facts), thus leading to a system wherein there is effectively no judicial precedent.

    However, in most instances, a 'material reason' may account for any one of the following: -

  • non-performance on the part of the agent;
  • the breach of the UAE Agency Law by the agent;
  • failure of the agent to uphold the image of a principal party in the defined territory or the actions of the agent in such a manner that it deteriorates the image of the principal party in the defined territory; or
  • the engagement of the agent in any activity that seeks to compete with the products or services provided by the principal party.
  • As stated earlier, these outlined 'material reasons' will not always be applicable without question, as each case is decided on independently. Thus, it would serve foreign companies very well to keep abreast of the functioning of the dispute resolution process pertaining to the UAE Agency Law.

    Dispute Resolution on UAE Agency Law: A Unique Process

    In the event of any dispute arising out of a commercial agency agreement under the UAE Agency Law, the parties are to first approach the Commercial Agency Committee, established with the Decree Number 3 of 2011, which is applicable in the UAE. The Committee's primary role is to review any dispute concerned to any and all commercial agencies registered with the MoE. Once a mater is decided upon by the Committee, parties are free to appeal to the courts of competent jurisdiction. The Committee was established with the outlook of instituting a purpose-built judicial body to address agency law disputes, given the proliferation of such agreements in the UAE.  

    It is important to note that the UAE Agency Law does not provide any special legal recourse in disputes concerning unregistered commercial agency arrangements. Consequently, such disputes would fall outside the scope of the UAE Agency Law, and would instead, most likely, come under the Commercial Transactions Law (Federal Law Number 18 of 1993) (for example, in the cases of distributors).  

    The flowchart outlined below seeks to elucidate, in a simple manner, the dispute resolution process followed by the Committee:

    Case Analysis

  • The case investigates the issue appeared between two companies: the supplier and distributor of a cigarette brand. The distributor filed a claim demanding payment of AED 2,498,000 as the supplier was allegedly non-compliant with the terms of the agreement and did not supply the agreed quantity of cigarettes for the period of four (4) months, which led to the total loss of USD 200,000 USD. Both Court of First Instance and Court of Appeal supported the claim and ordered the defendant to pay the amount. The matter was taken to the Court of Cassation by the defendant where the court, referring to the articles 3, 4 and 7 of the UAE Agency Law, as well as to Paragraph 12 of the commercial agency agreement between the parties, upheld the decision of the Court of First Instance and stated that the claimant is entitled to the payment ordered.
  • In another case, an issue arose between a bank and the company, wherein the bank requested the company to pay AED 2,590,136.67 with the 12% (legal) interest in respect of the tourism check in accordance with the agreement between them dated 25 September 1991. In order to ensure the amount is paid, the bank filed a lawsuit against the company itself and its insurance firm. Initially, the case was dismissed on the ground that the court does not have jurisdiction over it as the cited agreement was finalized in India. When the case went to the Court of Cassation, the main issue to decide was whether the claim is eligible to be heard or not due to the lapse of time. The agreement was terminated in August 1998, and the case was filed in July 2002, which constitutes the period of 3 years and 11 months. According to the Article 228 of the Commercial Transactions Law 'in case of denial and lack of legitimate excuse, all cases arising from an agency agreement are not admissible after the lapse of three years from the expiry of the agency agreement.' Hence, the Court of Cassation ruled to dismiss a case on the ground of lapse of time.
  • The last case for this section pertains to a dispute between the principal party, a Canadian pharmaceutical company, the defendant, and two other parties, which were the two plaintiffs. Here, the principal party employed company A as its exclusive agent for a defined territory over a certain area, and also entered into a contract with company B, whom it had led to believe that it was the exclusive agent for the principal party. However, it was later revealed by the first plaintiff, that the principal party had drawn up what was essentially a distribution agreement. Following this development, the dispute was taken to court, where both the two plaintiffs were present. The court held that the principal party had unfairly drawn up a false agreement with the intent of limiting the rights of the plaintiffs. The Court ultimately decided for the two contracts to be terminated, and issued damages for the afflicted parties.
  • A Brief Comparison between Distribution and Agency Agreements

    Whilst most foreign businesses opt for the agency route for the establishment of their presence in the UAE, there is another mechanism of agreements that allow for the same. Such agreements termed as distribution agreements, fall on the opposite end of the spectrum for all characteristics pertaining to agency agreements. In almost every aspect, distribution agreements represent a differing outlook on commercial agreements, when contrasted with agency agreements. The following sections of this article will seek to elucidate and outline the attributes of distribution agreements and contrast them with those of agency agreements.

    Distribution Agreements vs Agency Agreements

    Distribution Agreements

    Agency Agreements

    Explanation

    Distribution agreements are generic and non-specific in nature

    Agency contracts are specific and definite in nature

    The principal – agency relationship in agency agreements are governed by the UAE Agency Law (Federal Law Number 18 of 1981), under which the agreements are protected, and renewable. This does not apply in the case of distribution agreements. Distribution agreements are governed by the UAE Commercial Transactions Law (Federal Law Number 18 of 1993), which is a law with a wide and general purview.

    Distribution agreements do not require the distributor to be a UAE national or a company that is wholly (100%) owned by a UAE national

    Agency agreements require that the agent has to be a UAE national or a company that is wholly owned by a UAE national

    As established under article 2 of the UAE Agency Law, the agent has to be a UAE national or a company wholly owned by a UAE national. No such restriction is placed on distributors, and in the case of a principal – distributor relationship, the distributor may appoint any party (a free – zone company, an LLC, or any other company that is not 100% owned by a UAE national) as a distributor.

    Distribution agreements do not require the distributor to be registered with the UAE Ministry of Economy (MoE)

    Agency agreements require the agent to be registered with the UAE MoE

    Article 3 of the UAE Agency Law necessitates the registration of agents with the UAE MoE. However, distributors, as long they are based as UAE entities, do not need to register themselves with the MoE.

    Distribution agreements may be expressed or implied, i.e., written or non-written

    Agency agreements can only be of a written and expressed nature and must be notarized

    As specified in Article 4 of the UAE Agency Law, agency agreements have to be written and notarized to gain legitimacy. Distribution agreements can be implied or expressed.

    Distribution agreements may grant exclusive, or non – exclusive rights to the sale of the product to the distributor

    Agency agreements are always granted the exclusive right of sale to the agent

    Under article. 5 of the UAE Agency Law, the agent is granted exclusive rights to sell the principal's product, and this exclusive right to sell must apply to a defined territory. However, a principal party may appoint multiple distributors in the same area. 

     

    Distribution vs Agency

    Now that a clear distinction between distributors and agents has been established, a question thus arises, whether an agency is a more preferred means of conducting business for foreign companies in the UAE, or are distribution agreements more prevalent?

    Whilst this may be an issue of a subjective nature, agency agreements have long been the preferred route or mechanism for most foreign businesses to grow in the UAE. It is to be noted that agency agreements bode well for foreign businesses that have enjoyed a great reputation and success overseas. Such businesses have often enjoyed a long-standing reputation amongst their customers, and are likely to be of a capital-intensive nature. Such companies have leveraged the deep ties that their agents possess in the region, by virtue of which they have enjoyed great success. Thus, the formation of agency contracts proves fruitful for foreign businesses that seek to grow a large consumer base within the UAE, and have the accordant capital to facilitate the same.

    Whilst the majority of such commercial agreements are comprised of agency agreements, distribution agreements also have great utility for smaller companies that wish to enter the UAE market. Take, for example, companies with limited resources and capital, that operate in niche markets and product categories overseas. It would be in the best interests of such companies to employ distributors in the UAE, as it would render their agreements to fall outside the scope of the UAE Agency Law, thereby alleviating concerns of the tight restrictions and statutory protections offered to agents under the law. Thus, distribution agreements in the UAE grant greater influence to the principal party, whereas the opposite case is true for agency agreements.    

    Intricacies under the UAE Commercial Transactions Law & Dispute Resolution in Distribution Agreements

    There are some aspects of the UAE Commercial Transactions Law, which governs distribution agreements in the UAE, which overlap and intersect with the UAE agency law, which would be later analysed in detail with case law. For example, under article 227 of the Commercial Transactions Law, if a distributor is granted the sole and exclusive right of sale of the principal's product in a certain geographic area, it may be considered as an agency, and some elements of the UAE Agency Law may apply. Similar provisions in the Commercial Transactions Law often constitute the basis for contentions and disputes amongst parties in such agreements. For example, inter alia, the most common issue includes the differentiation of distributors from agents.

    In the event of such disputes, the question thus arises, as to which laws would govern the dispute resolution process for distribution agreements. In the event of a dispute between the principal party and the distributor, the UAE Commercial Transactions Law would apply (and not the UAE Agency Law). The courts would honour and respect the terms of the distribution agreement, as long it is compliant with the aforementioned law.

    With regards to the termination of distribution contracts, there are no statutory restrictions on a principle's/supplier's right to terminate the distribution relationship without cause where the agreement permits it, or when the deal reaches the full contract term. The UAE Civil Transactions Law is the guiding legislation in such matters.

    For a clearer understanding of the dispute resolution process with distribution agreements, we turn to case laws.

    Case Analysis for Distribution

  • The more recent case in the Abu Dhabi Courts between the defendant (distributor) and the plaintiff (principal) showcases a successful defence claim for compensation brought by the distributor upon termination by the foreign principle without any notice. There was no written agreement between the parties, only a commercial relationship. The distributor claimed for loss of profit from the date of termination without notice up to the date of the judgement. The claim was unsuccessful in the Court of Cassation and all the courts prior due to the lack of proof and specific terms specifying the duration of the relationship; thus, either party could terminate the relationship at any time. The distributor failed in the claim for compensation as there was no proof of his losses or damages. The case proves that there is still a possibility to have commercial relations without a detailed distribution agreement; however, with a written agreement, the chances of possible compensation increase significantly. 
  • In another case, an agreement was signed between a principal and an 'agent' (who was in fact, not a wholly 100% UAE owned entity), and the agreement was expressly termed as an 'Agency Agreement'. The agreement put the agent in a position for the management for 5 to 6 restaurants. The contract had also included an arbitration clause for the resolution of any disputes between the parties. Whilst this article does not wish to go into the merits of arguments put forth by the principal party and the agent, it seeks to analyse the judgment in this case, which distinguishes between agents and distributors. In this case, where the issue was whether the contract had formed a distribution or agency agreement. The court held that agreement did not constitute agency, for primarily 2 reasons: (i) the agent was not a company which was 100% owned by a UAE national, and (ii) the agreement contained an arbitration clause, which is against the public order that prevails in matters relating to commercial agency, as the dispute resolution capacity in such matters is vested purely with the Commercial Agency Committee, and thus local courts, arbitration bodies, and tribunals do not possess primary jurisdiction required.
  • The case concerns the issue between the commercial agent and client – according to the contract signed by the parties, the commercial agent is under obligation to give a full effort to promote the products of the client. The client has filed a claim for the breach of contract. According to the facts of the case, the client has brought a large number of its products into the country without the knowledge of the defendant, who is the exclusive distributor of these products. It caused the defendant to be unable to perform its duties as such act did not allow the respondent to increase the demand for those products and urge customers to buy them and fulfil their obligations to increase demand for those products. Therefore, it was held that the plaintiff's request to terminate the contract is based on unfounded fact and shall be dismissed.
  • Conclusion

    In conclusion, the process of decision making involves; identifying problems, generating alternatives, choosing an alternative and implementing the decision. Every single step is important as the business targets cannot be achieved without a well-rounded decision process. Thus, this article has sought to summarise and encapsulate the two major avenues for conducting business in the UAE for foreign businesses, in great detail, by covering elements such as, but not limited to, agency law, distribution law, and the dispute resolution processes and practical case law for the same.

    With the necessary consideration given to the legal implications within the cases discussed above, the principal will be able to make an informative decision to achieve success for the business. It is vital for any principal to identify all the risks involved and law governing these areas to determine the best option suitable to them.

     

     

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    Sun, 05 Jan 2020 11:39:00 GMT
    <![CDATA[Agency Laws in the GCC Countries ]]> AGENCY LAWS IN THE GCC COUNTRIES

    Introduction

    The extension of the multinational partnership is either setting up its subsidiary in remote purview or to tie up with the local organization in a foreign jurisdiction. United Arab Emirates (UAE) is one of the distant locals where international organizations are going into office concurrences with the Emirate nationals keeping in mind the end goal to grow their business in the UAE since the UAE being a well networked international port. A global entity wishing to set up a company offshore with cost-effective investment UAE is a standout amongst the most advantageous alternative where the foreign companies either enters into distribution agreement or makes an arrangement with the commercial agencies to expand their business with the locals. The UAE Agency Law manages these commercial agencies and distribution agreement in the UAE according to amended Federal Law 18 of 1981usually known as Agency laws. Federal Law 13 of 2006concerning agency law was revised and revoked in 2010. However, the Federal law 18 of 1981 was a reestablishment.

     

    The Emirate of Abu Dhabi established Federal Law Number 11 of 1973which centers around the task and control of business office exercises. This arrangement of Federal Law Number 11 of 1973had constrained the foreign business in Abu Dhabi and had created various challenges for the government about essential regulation carried out for commercial activities additionally talked about in this guide.

     

    These agency agreements have a positive effect on UAE's economy since there is an increment in Foreign Direct Investment (FDI). Indeed, even the previous Ministry of Economy SheikhaLubna Al Qasimi states that "The new revisions will certainly boost the financial market in the UAE. This law declared out of the longing to improve and keep up steadiness in costs and guarantee that organizations are not controlled to expand costs." Furthermore, the administration of UAE His Highness Sheik Khalifa bin Zayed Al Nahyan, President of the UAE and His Highness Sheik Mohammed receptacle Rashid Al Maktoum, Vice President and Prime Minister of Dubai, they all are resolved to offer help for the development of the economy in the UAE.

    STA Law Firm house one of the leading corporate attorneys in the entire of UAE. We believe that commercial agency laws for the protection of local agents from the termination of agency agreements by the foreign entity without any legitimate reasoning. Besides, the comparative study of agency laws has been done between UAE, Oman, Kuwait, Bahrain and Saudi Arabia.

    CONTENTS

    1.Agency Laws in United Arab Emirates

    1.1Definition 

    1.2Types of Agencies

    1.3Sham Agency Registration

    1.4Termination of Sham Agency Agreement

    1.5Termination of Agency Agreement

    1.6UAE Court's jurisdiction in Commercial Agency Agreement

    1.7Commercial Agency Committee

    1.8Arbitration in the UAE

    1.9Penalties

    1.10Agency Laws in Abu Dhabi

    2.Commercial Agency Laws in Oman

    2.1Introduction

    2.2Definition

    2.3Registration of Agency Agreement

    2.4Kinds of Agency Agreement

    2.5Ownership

    2.6Termination of Agency Agreement

    3.Commercial Agency Laws in Kuwait

    4.Commercial Agency Laws in Bahrain

    4.1Introduction

    4.2Definition

    4.3Ownership

    4.4Exclusivity

    4.5Termination of Agency Agreement

    4.6Penalties

    5.Commercial Agency Laws in Saudi Arabia

    5.1Introduction

    5.2Definition

    5.3Features of Agency Law

    5.4Ownership

    5.5Commission

    5.6Choice of law and Jurisdiction

    5.7Termination of Agency Agreement

    6.Conclusion

    7.References

    Overview

    The definition of commercial agency law as per Federal Law Number 18 of 1981(the UAE Agency Law) 'any disposition whereby an international company is represented by an agent to allocate, vend, tender goods or services within the UAE for a charge or profit.'  The rights of the Emirate agents are only protected under Federal law 18 of 1981(UAE Agency Law)if the registration of agency agreement with the UAE Ministry of Economy. Unregistered agreements do not render the rights of Emirate agents or protect them from the termination of agency agreement by the foreign principal under UAE Agency Law. Additionally, UAE commercial agent should hold a valid and appropriate license in each Emirate along with enrolment with the Chamber of Commerce in each relevant Emirate.  Article 4of the UAE Agency law (Federal law 18 of 1981as amended) states that there should be a straight connection between a UAE commercial agent and the foreign principal without any interference by the regional or multi-country sales agent. On the other hand, Article 5of the UAE Agency Law (Federal Law 18 of 1981as amended) states that ' A qualified commercial agent will be regarded selective in its domain, however, enables an international organization to delegate a different commercial agent for every emirate.' The Federal Act, 1981defines Commercial Agency as 'the representation of the principal by an agent for distribution, sale, display or provision of any commodity or service within the state (the UAE) in consideration of any commission or profit.' Here the word principal includes the manufacturer, whether based in the UAE or overseas. A common phenomenon observed in all the GCC countries is that if there is no registration of commercial agency agreement, then it will not be recognized by the courts or an agent will not have solid ground to defend himself from the termination of an agency agreement.  Therefore, commonly tan here are two types of agency agreements such as:

    I.    Registered agency agreements-  an agent can register commercial agency agreement before the Commercial Agency Registrar to protect themselves from an illegal termination of an agency agreement.

    II.    Unregistered agency agreements-  an agent enters into an agency agreement with the foreign private entity without registering the agreement with Commercial Agency Registrar then it is recognized as unrecorded agency agreement. Most of the courts in the GCC countries do not recognize or can protect a local agent from an invalid termination of an agency agreement. 

    AGENCY LAWS IN ABU DHABI

    The Emirate of Abu Dhabi enacted Abu Dhabi Law Number 17of 1969which states that "no person is permitted to conduct any commercial activity before obtaining a license by the commercial License Law of 1969." This provision of law had created commotion in the commercial market which limited the Foreign Direct Investment in Abu Dhabi. Therefore, Abu Dhabi Law Number 11 of 1973repeals Abu Dhabi Law Number 17 of 1969 which encourages Foreign Direct Investment as it focuses on operation and regulation of commercial agency activities. In Abu Dhabi, a business agent does not have exclusive rights over the products of the foreign entity once they enter commercial agency agreement as an agent is a mediator. An agent is a mediator for foreign companies to set up their business in Abu Dhabi because without an agent a foreign corporation cannot expand their business in the UAE.

    According to Abu Dhabi Law Number 11 of 1973it is not explicitly mentioned that registered or qualified agent would be protected under a specific provision if the foreign entity terminates agency agreement without any valid reasoning.

    Furthermore, in other jurisdictions of the GCC countries, qualified agents are protected under their specific agency laws if the registration is agency agreement is carried out before the Commercial Agency Registrar. This guide entails in detail about agency laws in the GCC. Click here to read more.

    ]]>
    Thu, 14 Jun 2018 15:28:00 GMT
    <![CDATA[Споры по Закону Коммерческого Агентства]]>

    We have already highlighted in a previous article1  the fact that the Federal Law no. 18 of 19812 , also known as UAE Commercial Agency Law (the Law), has a protectionist approach favoring the Agent, defined therein as "A natural person holding the nationality of the state, or a juridical person owned fully by national natural persons, entering into contract of commercial agency for representation of the Principal in the distribution, sale, display or offer of a merchandise or service inside the state in return for a commission or profit", and further more imposing on its article no. 2 that "Carrying out the activities of commercial agency in the State shall be restricted to nationals or individuals or companies wholly owned by national physical persons". Therefore spreading awareness amongst foreign individuals or companies about certain important legal provisions before entering into an agency agreement is of major importance. 

      According to its protectionist approach, the Law reserves one hundred percent of the pursuit of the activity for the national citizens or companies of the United Arab Emirates. However, and being that the country's populations is constituted of 80% of expats it is important to state that articles 3 and 4 of the Law try to attribute some security to the Principal by providing that "the activities of the commercial agency in the State shall only be performed by persons whose names are inscribed in the commercial agents register (...), any commercial agency not registered in this register shall not be considered (...)" and "for the validity of the agency at the time of registration. The agent must be directly bound to the original Principal by a written and ratified contract".   In practice, the majority of the disputes arise due to the fact that the Principal decides not to seek legal advisory from an expert and prepares the agency agreements by himself in order to save money and time. To the extent that the international commercial principles are inspired by common law, and that the Principal is a foreign entity often unaware of the legislation applicable within the United Arab Emirates, the result is that a great number of agency agreements forwarded by clients to our office lack essential conditions, are not properly registered or simply provide that "should any conflict arise the parties agree that it should be referred to arbitration" when the agency law specifically mentions that in case of dispute the lawsuits should be addressed to the Courts.  However all those questions have already been largely studied and discussed, they are regulated by the applicable law and even the service court has already replied to the same questions in different occasions.    Nowadays, when it comes to agency agreements and disputes under the agency law, considering the economical crisis that the world is going through, the liquidation of the Principal can turn into a major issue since this event is not directly regulated by the law. Accordingly, what happens if the Principal goes into liquidation? What will be the consequences to the Agent and the agency agreement?   We will have to start by looking into the available legislation - the Federal Agency Law No.18/1981, the Civil Transactions Law (Articles 954-960); and the Federal Law No.8 of 1984 as amended by Federal Law No. 13 of 1988, the Commercial Companies Law.    Beginning with the Agency Law, it is important to mention that it is silent regarding the regulation, procedure, or consequences when the Principal in an agency agreement goes into liquidation. Under Article 8 of the said law, "the principal may not terminate the agency contract or refrain from the renewal thereof if there is no fundamental reason behind the termination or the refrain from the renewal" further stating that the agency contract cannot be re-registered before the Registry under the name of another agent, "even if the previous agency's contract was of definite term, unless the said agency has been rescinded upon the mutual consent of the parties, or should there be fundamental reasons behind(…)". We shall also mention that there is no definition under the law of what the fundamental reasons that might allow the Principal to terminate the agency contract or refrain from its renewal are, clearly leaving it to the discretion of courts and their judges to interpret the rule and to apply it to the facts in order to decide whether we are facing a fundamental reason or not.     Furthermore, the same article states that even if the agency's contract has a definite term, it demands mutual consent of the parties to rescind the agency. The legal obligation of compulsory mutual consent or the existence of a fundamental reason for the expiry of the agreement upon the end of the definite term, as well as the attribution of the settlement of any disputes to the courts are undoubtedly exceptions that demonstrate the perception of the legislator regarding the importance of these agreements for the economy and prosperity of trade and his intention to keep the pursuance of agency activities for nationals,  protecting  the agents, through the above referred legal mechanisms. However, the main question remains, could the liquidation of the Principal be valid reason for the termination of the agency agreement?   Before proceeding, there is also another article in the agency law that should be mentioned. As per article 9, termination may result in significant compensation awards in favour of the local agent. The stated article governs the payment of compensation to the agent upon termination or non-renewal of an agency agreement. As with termination under Article 8, the exact calculation of a compensation payment is not set out in the Agency Law (case law needs to be considered). This means that in case of liquidation of the Principal, the Agent will be entitled to any compensation?    The Civil Transactions Law also has an article regarding the termination of the agency agreement. Article 954 states that the agency agreement can only be terminated upon completion of what is delegated; upon the expiration of the fixed time; or upon the death of the Principal or the agent or their ceasing to have legal capacity.    Once again, despite having an extra article on agency agreements, the law is completely silent when it comes to liquidation of the Principal.   Finally, in 2008, the UAE Supreme Court's decision No.232 issued by its Commercial Section provided some guidance regarding the liquidation of the Principal. Accordingly, the Supreme Court decided that if a principal in an agency agreement goes into liquidation, the agency contract will come to an end and won't be valid anymore. During the liquidation period, under Article 294 of the Commercial and Companies Law, the Court will appoint a liquidator who will audit the company's accounts. The agent shall also submit all the invoices to the liquidator, after which the termination agreement can be signed between the Agent and the liquidator on behalf of the Principal. Afterwards, an application should be submitted to the Ministry of Economy to terminate the agency agreement.   Regarding the compensation of the Agent by the Principal, we are of the opinion that it should be awarded by the liquidator to the Agent if the liquidation was in any way the Principal's fault, however the credit should be considered as a common credit and be settled only after the payment of the privileged credits.    Thus, no mechanism of unilateral termination is established – even in case of liquidation. Accordingly, and having in mind the way the agency law has been designed, before signing an agency agreement we strongly recommend both the Agent and the Principal to consult a legal expert, as we are before an agreement whose exit can become very difficult, time consuming and the probability of not achieving a favorable decision in court regarding the termination or non- renewal of the agency agreement is high, given the existence of indeterminate concepts which must be interpreted and applied by the judge under his discretion power.   ]]>
    Fri, 25 Dec 2015 12:00:00 GMT
    <![CDATA[Registration and Importation of Pharmaceuticals in UAE]]> Headache? Perhaps you'd take a paracetamol. Upset stomach? Maybe an indigestion pill. Cold or flu? You might consider anti-congestant medication. In the United Arab Emirates, such pharmaceuticals are easy to come by, with the majority of people likely to have a supply already to hand in their purses or bathroom cabinets. Yet although these common medications are not controlled in the same manner as prescription drugs, various approvals are required with regards to the importation, sale and marketing of such produce in order to ensure that the drugs we buy over the counter are compliant with UAE standards, thus ensuring our safe consumption.

    So is the registration of over the counter drugs as simple as the process of procuring and consuming them? Pursuant to Federal Law Number 4 of 1983 (the Pharmacy Law), all drugs must be registered with the Ministry of Health in order to be lawfully sold within the UAE. Article 65 goes so far as to specify that this includes imported pharmaceuticals, whether or not they have been approved and registered in their country of origin. The decision as to whether to register such products shall be at the discretion of the Ministry of Health following application – and as the criteria on which such a decision will be made is unavailable to the public it appears as though any entity applying for the registration of a product shall have very little guidance to follow in order to increase the likelihood of success. The fact that only Articles 63-67 of the Pharmacy Law deal with the actual registration of pharmaceuticals further supports the view that manufacturers are largely unguided in their pursuit of registration, with supplementary regulations (such as the Dubai Health Authority's Community Pharmacy Licensure and Pharmaceutical Practices Guide of February 2013) (the Pharmacy Guide) focusing primarily on the licensing and protocol of institutions and professionals as opposed to the industry's products.


    A reading of the applicable section of the Pharmacy Law would give the understanding that Ministry of Health registration is a strict condition to which all pharmaceutical products sold within the UAE must adhere without exception. Yet owing to the degree of discretion afforded to the Ministry of Health, certain hospitals operated in conjunction with the Health Authorities of Dubai and Abu Dhabi are able to apply for permission to import unregistered drugs in prescribed circumstances. These include emergency medicines used for the immediate preservation of life, drugs which are currently unavailable in hospitals (such as specific medicines used in the treatment of cancer) and those which have not yet been awarded Ministry approval, and specialist narcotic and psychotropic substances. However any approval granted with regards to an unregistered drug will be qualified with the condition that the product is not distributed outside of the institution in question, and will be quantified proportionally to the hospital capacity. The authority of the Ministry in this regards is such that permission may be withdrawn immediately in the event of a breach of any of the case-specific regulations and conditions by the licensed institute.


    We have considered that there is little guidance available with regards to the content and scientific criteria a product must meet in order to effect successful registration. This, it would seem, gives rise to another question: what is a "medicine" within the meaning of the applicable law? How is a potential importer supposed to know whether or not his product will require registering pursuant to Article 65? The Pharmacy Law defines medicine as being "any medicine that contains one or more element for treatment or protection of human beings and animals", with the Pharmacy Guide going further to specify "Medicine/medication/pharmaceutical drug shall mean or can be loosely defined as any chemical substance intended for use in the medical diagnosis, cure, treatment, or prevention of disease". But as any person who has spent considerable time browsing the drug store shelves for a specific product will attest, today's market consists of a huge variety of healthcare products – not just the common medicines discussed earlier and prescription drugs, but various supplements, nutritional enhancements, and cosmetics which may not come under the definition of "medicine" per se. Do such items fall within the remit of the Pharmacy Law and its requirements?

    To this effect the Ministry of Health produced Circular Number 20 of 2001 (the Circular), as issued by the Director of the Drug Control Department. Herein it is specified that the General Sale List (the list consisting of all registered pharmaceutical substances in the UAE) includes "Dietary supplements, medicated cosmetics, antiseptic and disinfectants and miscellaneous products which contains pharmaceutical ingredients and / or a medical claim and cannot be classified as medicines". And despite the fact that it still does not suggest any composition criteria, the Circular goes some way towards laying out the various administrative requirements that a product should meet in order to obtain a successfully registered status. Most importantly, it is specified that the application form (available from the Technical Affairs Section or downloaded from the Ministry of Health website, in either the Arabic or English language) must be accompanied by the relevant Certificate of Pharmaceutical Product (CPP) as per the World Heath Organization Certification Scheme, or a Free Sale Certificate (FSC). This must have been issued by competent lawful authorities in the product's country of origin, it must additionally have been authenticated by the Foreign Affairs section of the UAE or any GCC embassy in the country of origin. Moreover a successful application must be accompanied by 3 (three) samples of the pharmaceutical in its final packaging, along with a certificate of analysis for the given batch of samples

    Further to this the application for registration will require the submission of various supporting documentation on the letterhead of the company requesting the registration of the product (complete with the company logo, stamp and authorized signature), which includes but is not limited to:

    –A statement from the company declaring that the product is free from any hormones, heavy metals, antibiotics, steroids, derivatives of pork and any natural and  chemical ingredients with the potential to cause harmful effects to humans. When submitting a product containing an ingredient derived from animal source the    company must go so far as to specify the kind of animal and specifications of the part extracted from it, and must additionally clearly note the percentage of alcohol (if       any), together with an explanation as to why such ingredients were incorporated;

    • Halal certificate issued by recognizable organizations and authorities;
    • Details of a medical storage facility licensed by the Ministry of Health (as per the Circular Number 1 of 2006);
    • Samples of the outer label, inner label and insert of the product;
    • and CD containing artwork (outer, inner label and insert) of the product.
    ]]>
    Thu, 21 May 2015 12:00:00 GMT
    <![CDATA[Агентское право в Катаре]]>

    Развиваясь и расширяя свое присутствие в новых странах, юристы компании STA продолжают предоставлять индивидуальные юридические консультации. В этой статье обсуждает Агентское Право Катара и помогает получить подробную информацию для обеих сторон – инвесторов и агентов. В юридической компании STA работают творческие и дальновидные юристы, которые пишут статьи и помогают читателям узнать больше о различных юридических вопросах. Если бы это было не так, то данный блог был бы отдан на аутсорсинг какому-либо агенту. Если бы этот агент (пишущий под именем STA) воспроизвёл информацию, защищенную авторскими правами, и владелец авторского права это обнаружил, кто был бы участником судебного процесса? STA, агент или оба? Если владелец откроет дело против STA, может ли STA открыть параллельное дело против агента? Термин «агент» в данном случае употребляется в более широком значении, чем понятие «агент» в агентском праве, которое будет рассмотрено далее.

    В юридической компании STA работают творческие и дальновидные юристы, которые пишут статьи и помогают читателям узнать больше о различных юридических вопросах. Если бы это было не так, то данный блог был бы отдан на аутсорсинг какому-либо агенту. Если бы этот агент (пишущий под именем STA) воспроизвёл информацию, защищенную авторскими правами, и владелец авторского права это обнаружил, кто был бы участником судебного процесса? STA, агент или оба? Если владелец откроет дело против STA, может ли STA открыть параллельное дело против агента? Термин «агент» в данном случае употребляется в более широком значении, чем понятие «агент» в агентском праве, которое будет рассмотрено далее.

    Давайте поместим это в конкретные коммерческие рамки агентского права. В данном контексте, Агент - это юридическое лицо, утвержденное и уполномоченное рекламировать и распространять товары или услуги от имени другого лица, получая за это комиссию, как это было согласовано в агентском договоре. Например, Компания Х, имеющая хорошую репутацию в государстве Катар, назначена в качестве агента по продаже автомобилей, произведенных немецким производителем, Компанией Y. Отношения между данными компаниями будут регулироваться в соответствии с агентским соглашением, предусматривающим права и обязанности каждой из сторон, а также указывающим юрисдикцию в отношении урегулирования возможных споров и разногласий (по умолчанию, юрисдикцией будут являться катарские суды, если в договоре не предусмотрено иное в соответствии со статьей 23 Федерального Закона №8 от 2002 г.)

    В Катаре любое коммерческое агентское соглашение подчиняется Катарским Федеральным Законам №8 от 2002 г. (Закон о Коммерческих Агентах), №27 от 2006 г. (Коммерческий Закон) и Гражданский Закон №22 от 2004 г. В отличие от многих других юрисдикций, законодательство и законы Катара наделяют правами и агента и заказчика. Агентское соглашение – в частности, соглашение о том, что компания Х (Агент) предоставляет товары или услуги от имени компании Y (Заказчик) – должно быть официально зарегистрировано в Министерстве Бизнеса и Торговли и обновляется каждые два года. При регистрации соглашение имеет силу, что компания Х наделяется эксклюзивными правами на товары или услуги, указанные в нем. В дополнение, компания Х автоматически получает законное право на 5% комиссии от общей стоимости товаров или услуг, полученных в соответствии со статьей 5 Закона о Коммерческих Агентах.

    Очевидно, что такое положение выгодно компании Х, так как оно предусматривает законодательно установленный минимальный размер оплаты, гарантирующий защиту в случае, если компания Y откажется выполнить платежи, указанные в агентском договоре. Однако, Катарский закон, а именно Закон о Коммерческих Агентах, идет еще дальше и позволяет компании Х требовать дополнительной компенсации в соответствии со статьей 9(с), в случае прекращения агентских отношений. Это относится ко всем обстоятельствам, в которых Агент может предоставить доказательство, что он играл важную роль в продвижении товаров или услуг Заказчика и участвовал в расширении клиентской базы; также в случае, если Заказчик расторгает договор и отсутствует какая-либо компенсация, уплаченная Заказчиком Агенту.

    Кажется, что Агент может пользоваться относительно хорошо защищенной позицией. Однако, закон накладывает ряд обязательств на сторону Агента, некоторые из которых могут привести к уголовной ответственности в случае несоблюдения. Например, обязанностью агента является удаление своего имени из регистра Министерства Бизнеса и Торговли по окончании срока действия договора – обязательство, которое должно быть выполнено в течение 30 дней с момента прекращения действия контракта независимо от любых неразрешенных вопросов или находящихся на рассмотрении претензий против Заказчика в соответствие со Статьей 20 Закона о Коммерческих Агентах. Статья 21 накладывает штраф в 10,000 катарских реалов, шесть месяцев лишения свободы или оба наказания в случае несоблюдения. Кроме того, это обязанность Агента лицензировать свою деятельность по распространению товаров или услуг в Катаре. Это включает регистрацию коммерческого присутствия в регионе и поддержание соответствующей таможенной лицензии (или сохранение стороны, которая соответствует данным требованиям).

    Итак, как же закон влияет на компанию Y? Агентское право никоим образом не требует, чтобы предоставление товаров или услуг осуществлялось исключительно через агентов, компания Y свободна напрямую торговать на рынке по своему выбору. Однако, возможность торговли на рынке напрямую в дополнение к возможности действовать через агента ограничена типом агентского соглашения – различные правила относятся к разным категориям, которыми являются субподрядные агентства, агентства по распространению, комиссионные агенты и коммерческие/торговые представители. Заказчик, желающий вести торговлю напрямую и одновременно желающий назначить агента, должен в первую очередь проверить ограничения, прежде чем выбрать категорию агентского соглашения.

    Сочетание положений, обсуждавшихся до сих пор, приводит к очевидному вопросу – что если компания Y хочет заручиться услугами агента, но не хочет ограничивать распространение своих товаров или услуг только компанией Х? Опять же, в Катаре это желание реализуется через различие между категориями агентских соглашений. Несмотря на то, что для некоторых категорий является обязательным условием исключительность назначенного агента, приглашение коммерческого/торгового представителя предоставляет компании Y возможность не только не следовать условию эксклюзивности Агента, но и в целом положениям Коммерческого Закона. Однако, в поисках свободы компания Y должна быть осторожна – избегание эксклюзивности не является достаточной причиной для освобождения от закона.

    Despite a ruling from the Court of Cassation in 2009 holding that an agreement must contain three main elements in order to be considered as a valid commercial agency agreement (namely the scope of the agency, exclusivity and remuneration), a further Court of Cassation decision from 2013 contrarily rules that an agency agreement may still be deemed to exist regardless of the absence of one of these characteristics, consequently rendering it susceptible to the Commercial Law.

    Несмотря на постановление Кассационного суда в 2009 г., устанавливающего, что соглашение должно содержать три основных элемента для того, чтобы рассматриваться в качестве действующего коммерческого агентского договора (а именно, сферу действий агентства, эксклюзивность и вознаграждение), следующее решение Кассационного суда от 2013 года, напротив, постановило, что агентское соглашение все еще может считаться действительным независимо от отсутствия одного из этих признаков, и следовательно подчиняться Коммерческому закону.

    Несмотря на средства правовой защиты, имеющиеся в распоряжении агента, помимо прекращения действия контракта, закон позволяет Заказчику прекратить его действие, если цели, указанные в контракте, были выполнены. Однако, факт, что Заказчик не имеет оснований прервать контракт из-за неисполнения агентом своих обязанностей, снова склоняет чашу весов в пользу Агента. Кроме того, отмена регистрации Агента Заказчиком довольно затруднительна. Условие контракта, по которому агент предоставляет Заказчику нотариальную доверенность специально для этой цели, во время исполнения не может преодолеть эту проблему, так как Министерство вряд ли примет его в ожидании отмены регистрации несогласных агентов.

    Преимущества агентского договора для Заказчика вряд ли подвергаются сомнению: это использование более широкой сети дистрибуции, расширенный маркетинг и передача на аутсорсинг трудоемких обязательств по продажам и т.д. Однако, как представляется, Катар принимает меры для обеспечения прав и защиты Агентов. Поэтому агентские соглашения могут быть привлекательной возможностью для иностранной компании, желающей увеличить доход и расширить коммерческое присутствие в регионе, будучи уверенной в том, что ее права защищены законом.

    Но тут нас поджидает последний удар, нанесенный законодательством, предчувствующим потерю торгового сектора местными гражданами, в соответствие со статьей 11 (1) Закона о коммерческих агентах, только граждане Катара или компании на 100% принадлежащие им, могут быть зарегистрированы в качестве агентов. Упомянутое законодательство принимает шаги для устранения дисбаланса между интересами сторон договора, но кажется, что еще предстоит долгий путь, чтобы тоже самое можно было сказать о правах иностранцев и граждан страны.

    Может быть в один день, господа иностранные инвесторы!

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    Wed, 09 Jul 2014 12:00:00 GMT
    <![CDATA[Агентские соглашения ОАЭ]]> Агентские соглашения

    «Если вы строите каждую сделку и отношения в бизнесе и жизни, руководствуясь принципами взаимной выгоды, справедливости и правды, то прибыль не заставит себя ждать».

    Это высказывание нужно принять как мантру при подписании агентского соглашения. Если все агенты и заказчики будут рассматривать взаимную выгоду как высочайший стимул, каждая сторона будет в выигрыше..

    Агентское соглашение является юридическим договором, который создает доверительные отношения между двумя сторонами, в результате чего первая сторона (Заказчик) соглашается, что действия второй стороны (Агента) обязывают Заказчика к последующим соглашениям, заключенным Агентом, как если бы Заказчик заключил их сам.  Федеральный закон ОАЭ № 5 от 1985 года (Гражданский Кодекс) и в особенности статья 149 Гражданского Кодекса определяют положения законодательства в отношении агентских соглашений. Статья 149 устанавливает, что контракт может быть составлен заказчиком, а также агентом, если законом не предусмотрено иное..'

    Иностранные партнеры, которые хотят вести бизнес в ОАЭ с минимальными инвестициями, часто обращаются к коммерческим агентам для продажи своих товаров. Закон, регулирующий агентские соглашения, это Федеральный Закон номер 18 от 1981 года, который часто называют Агентское Право. Закон №13 от 2006 года во многом изменил законодательство 1981 года, но был отменен в 2010 году, и Закон №18 1981 года восстановлен в силе. Можно утверждать, что этот закон носит общий и несколько абстрактный характер, и, хотя он охватывает все формы агентских соглашений,  этот закон несколько расплывчат и неоднозначен по форме. Коммерческое агентство определяется как «представление заказчика агентом для распространения, продажи, демонстрации или обеспечения товарами или услугами в обмен на комиссию или часть прибыли». Агентское право является довольно консервативным и в некоторых случаях предвзятым, поэтому, в случае если иностранная компания хочет начать или расширить уже существующий бизнес на рынке ОАЭ, обязательным условием является юридическая консультация перед тем, как принимать какие-либо конкретные обязательства в отношении договоренности с потенциальным агентом. Иностранный гражданин должен быть осведомлен о некоторых важных факторах перед тем, как вступать или прекращать агентское соглашение, и определенно мы здесь должны заметить, что как и большинство стран, ОАЭ оказывает поддержку своим гражданам. Федеральный закон №2 от 2010 г. был принят для того, чтобы внести изменения в существующий закон №18 от 1981г., и это служит наглядным примером поддержки прав коммерческих агентов. 

    ОТНОШЕНИЯ ЗАКАЗЧИК-АГЕНТ. ЗАКЛЮЧЕНИЕ И РАСТОРЖЕНИЕ КОНТРАКТА.

    Следует понимать, что только граждане ОАЭ или компании, принадлежащие гражданам ОАЭ, могут выступать как торговые агенты в Объединенных Арабских Эмиратах. Это абсолютное положение Агентского Права ОАЭ.  Агентское соглашение эксклюзивно действует на территории ОАЭ, это может быть один эмират, несколько эмиратов, или территория ОАЭ в целом. Торговый агент должен быть зарегистрирован в Регистре Коммерческих Предприятий, который регулируется Министерством Экономики соответствующего эмирата. Если агентское соглашение зарегистрировано, агент имеет юридическую защиту и привилегии, например, требовать возмещения убытков от имени Заказчика..

    Разрыв агентского соглашения может быть чрезвычайно обременительным, и как только соглашение заключено и зарегистрировано в Министерстве Экономики, прекратить его действие по инициативе Заказчика чрезвычайно трудно. В большинстве случаев, когда Заказчик пытается прервать отношения с агентом или отказаться от агентского соглашения, это выливается в выплату значительной компенсации местному агенту. Закон дает агентам право на компенсацию в случае прерывания контракта. Компенсация, установленная судом, обычно бывает довольно значительная и кроме того, Заказчик принуждается ко всем выплатам по контракту. При расчете компенсации судом во внимание  принимаются следующие факторы: продолжительность агентского договора, усилия агента по продвижению товаров заказчика и чистая прибыль, полученная агентом. По этой причине закон может быть выгодным для заказчика и обеспечивать определенную степень равенства и справедливости. Если агент выполняет свои обязательства надлежащим образом и оперативно, то для Заказчика нет необходимости разрывать контракт.

    Закон, регулирующий агентские соглашения, претерпел ряд изменений для решения конкретных проблем и предотвращения периодического раскачивания маятника между правами Заказчика и Агента. До изменений, внесенных в закон в 2006 году, прекращение агентского договора или отказ в продлении его срока действия могли быть успешно осуществлены только при наличии «уважительной причины», а что будет являться таковой, оставалось на рассмотрение Комитета Коммерческих Агентств при Министерстве Экономики. После 2006 года закон были внесены изменения и некоторые послабления, что, несомненно, сделало более привлекательным для иностранных заказчиков перспективу проникновения на рынок ОАЭ, не чувствуя себя незащищенными. Новое правило дает возможность Заказчику прекратить действие агентского соглашения по истечению срока, указанного в контракте. Кроме того, закон дал право любой из сторон договора требовать компенсации в случае нарушения или невыполнения обязательств.

    Для того, чтобы открыть бизнес на территории ОАЭ, привлечение местного агента остается привлекательным способом выйти на рынок, однако делом первостепенной важности является внимательное отношение к потенциальным торговым агентам и помощь адвоката для изучения, проверки и подготовки коммерческого договора с агентом. Привлечение адвоката также гарантирует, что положения «Агентского права» будут соблюдены.'

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    Wed, 12 Mar 2014 12:00:00 GMT