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Volume II Issue II 2015

Our Offices: Abu Dhabi | Bahrain | Doha | Dubai | London | Luxembourg | Moscow | Sharjah

CONTENTSpage 2HOTEL MANAGEMENT AGREEMENTSSunil Thacker

page 5

Yassir AhmedBAIL FAIL

CORPORATE GOVERNANCE IN ABU DHABI MEDICAL INSITUTIONS

page 12

Jennifer Leader

page 8

Zisha Rizvi

SAFEGUARDING UNPAID CREDIT LOANS

page 14RE-MEDIA-L

Rini Agrawal

Surbhi Veer

page 18KIZADTHE GATEWAY TO ABU DHABI VISION 2030

Jennifer Leader

page 10THE IMPORTATION AND REGISTRATIONOF PHARMACEUTICALS IN UAE

egardless of its size, a piece of paper can

only be folded in half a maximum of six

times. Sure, there’s a scientific explanation for this (with every fold the paper becomes

twice as thick, with the thickness becoming

disproportionate to the other dimensions by the

sixth fold) – but telling a person that they will

not be able to achieve a particular task is a

guaranteed way to ensure that they will try. And

if the obvious method looks set to fail, maybe a

creative alternative is the best route to success.

The paper may not fold any smaller if you use

the obvious method, BUT what if you try with tissue paper or kitchen foil? Or make parallel folds along the same axis? We at STA pride

ourselves on our bespoke, fresh and innovative approach to each and every situation –

both with paper, on paper and in law.

Welcome back to Court Uncourt! Our latest issue once again discusses a variety of

prevalent legal topics, both in the UAE and further afield, from a unique and imaginative

perspective. Enjoy your read – and fold carefully afterwards!

R

2 Court Uncourt

oes contract law really serve any purpose? If

so, why do businessmen often resort to and

rely on 'a man's word' knowing that atransaction may involve inherent risks?i Even in the

current investment climate, are contracting parties now

employing more sophisticated or advanced risk

planning and management policies or pleasantries and

ambiguity in contracts still continue to operate? If the

objective of contractual clauses is to cement the

relationship between the parties then why is such

binding effect often flexible and informal? Would

imposition of strict legal sanctions disrupt the

relationship of two contracting parties? The term

contract as per standard contract law textbook theory is

nothing but meeting of ‘wills’ or ‘minds’. If the will is

really free, why can it not change its mind? ii Will holding

parties strictly to their promises, ' operate harshly and

unfairly in many instances?'iii

By way of example, in the infancy stage of a transaction

the parties are willing to accommodate the needs and

demands of the other. But as with all infants, they grow

up to be toddlers who now demand more and

eventually into teenagers who cannot agree on

anything. This is where future planning and drafting of

agreements that relies on contract law plays an

important role. Contract law indisputably forms the

nucleus of most arrangements as it dictates, supports

and controls the millions of agreements that

collectively make up our economic nexus. Commercial

transactions require parties to assure each other of

certain rights and obligationns. This is where Contract

In order to understand how different a real deal is from

a paper deal, sophisticated investors who have clear

requirements often engage seasoned counsels and

financial advisers in the planning process. When

speaking of sophisticated and complex investments,

the hospitality industry becomes a dire favorite

discussion, primarily because the complexities and

stakes involved in building, operating and managing a

hotel property are intricate.

law comes into play- both when drafting the terms

sufficiently so as to ensure that the contract will be

upheld in a court of law and in case where either party

defaults on its obligations.

Dubai’s thriving hotel industry recorded an average

occupancy of approximately 85 percent in 2014. The

statistics suggest that Dubai’s, and on a broader note

UAE’s, hospitality landscape presents a significantly

healthy prevalence of hotel operation and hotel

management agreements therein.

As the Middle East began to develop in the 1970s and

1980s and the subsequent need for hotel

accommodation arose, the large international chains

were first on the scene. Given the open and

predominantly empty market such chains were free to

enter into management contracts on their own terms.

Yet as development continued and the tourist industry

flourished in the 1990s, competition increased and

owners began to insist on retaining more control over

their properties in order to maximize their operating

profits in the booming market. Predictably, the growing

Agreeing with your spouse to reimburse him or her after a shopping trip? A contract. Buying a plane ticket? A contract. Signing an o�er letter from an employer who has o�ered you a job? A contract. A multi-page complex document laying out the terms and conditions of a high-value corporate deal? A contract.

D

HOTEL MANAGEMENTAGREEMENTS

Court Uncourt 3

market attracted further investment, thus having the effect that the number of operators in the Middle East increased.

Strong competition within the industry has consequently resulted in incentive fees, shorter contract periods, fewer

renewal options and strict performance clauses. The dynamics of hotel industry and hotel management contracts

have clearly witnessed a dramatic change in recent years. The first installment of this two part series aims at covering

some of these changes along with the broad areas of hotel management agreements in the UAE. In Part II (to be

covered under Court Uncourt Volume II, Issue III) we will be looking at the different forms of hotel management

arrangement in UAE and Qatar.

ABC is the owner of a plot and appointed JKL as their hotel operator almost fifteen years back. The term of the hotel

management contract was limited to fifteen years, and ABC and JKL will now need to sit and re-negotiate the terms

of renewal. Emphasis here is on the ‘renewal’ process and technicalities surrounding therewith. Prior to or during the

course of renewal, each party is likely to have thought over the renewal process and those terms of negotiating the

contract that will serve theirbest interest. During the process, each party is advised by their counsel on conditions

precedent for renewal under the present contract. One of such conditions agreed mutually by owner and operator is

refurbishment of the hotel property. The Parties are now posed with some serious questions including but not limited

to the following:-

Treatment of employees during the refurbishment – whether the employees must be terminated from the existing pay roll, be retained or whether only key employees must be retained;

Role of operator during the refurbishment process and payment of management fees if the contract is silent in this regard;

Possibility of operator entering in to a non-disturbance agreement with owner for smooth operation of the hotel property and to ensure revenue generation is not hampered; and

Provisions relating to sale of hotel by owners and valuation of hotel property.

Unlike in the past, where American and European hotel operators

predominantly had a fair share of footprint in managing hotel

industry across the World, today developments in the field of

science and aviation have increased opportunity for travelers

globally, thereby increasing demand for hotels and a subsequent

dilution in the once prevalent dominance. Although the power of

international brand name continues to enjoy its privileges,

competition in the hotel management industry has evidently

resulted in the entry of new players, new ways and productive

means of negotiating the hotel management contract with the

owners. This competition is indeed healthy and allows operators

and owners to fully determine the synergies and prospects before

executing the deal. Based on experience, let’s take the case of a

hotel management contract that is due for renewal.

i.

ii.

iii.

V.

continued on next page

The hotel management agreement, considered by many as cliché, is infact one of the key documents that acts as a

moderator in defining the ownership and operation roles. Regardless of ABC and JKL’s respective positions, both are

subject to the effects of the way in which the hotel is managed, and thus would mutually benefit from a contract

structured in such a way so as to include the following provisions:-

There is no denying that Dubai is set to see rigorous growth in the hospitality sector by 2020. The year 2014 saw

positive amendments for the licensing of hotels in the region. Dubai Department of Tourism and Commerce

Marketing (DTCM) formed a specialized office to oversee the licensing and approval procedure for hotels, and at the

same time the period for preliminary consent was reduced to two months, as opposed to the earlier six months

period. The Government now aims to provide land for development of three and four star hotels on favorable terms.

It also aims to waive off the ten percent Municipality tax for hotels that are due to be operational by 2017. As such,

foreign investors have varied options ranging from choosing a joint venture partner or owning and managing

properties in designated areas.

While the options seem too many and too lucrative, a prudent party to such contract would not ignore the

conservative nature and the infancy stage of legislative reforms within the hospitality domain in this part of the

world. As the introduction to this article suggests- it is never the ‘getting in’ of a contract which causes trouble, but

the ‘getting out’. Dubai has and continues to witness its fair share of court battles between parties that were once

allies in hotel operations. Regardless of internationally acknowledged boiler plates, the need to intrigue local and

legal customary usage remains a driving force for successful ventures in the UAE.

4 Court Uncourt

- Term of appointment;- Operator’s fees;- Operator’s obligations and guarantees;- Owner’s obligations;- Reserve Fund - Furniture, Fixtures and Equipment;- Capital expenditure and insurance;- Termination and events of default; and- Dispute resolution procedures

i See for instance - Non-Contractual Relations in Business: A Preliminary Study, Stewat Macaulay, American Sociological Review, Vol. 28, No. 1, February 1963ii The Economy of Obligation: Contract Ambiguity and the Welfare State, Avner Offer, p. 7, Unpublished paperiii Ibid, p. 8

As approximately ninety (90) percent of the UAE’s

population consists of expatriates and due to the

additional fact that the UAE enjoys an unprecedented

level of tourism, it follows that a major concern of the

courts when considering whether to grant a defendant

bail is the risk that the defendant may abscond – in

other words, that he may leave the UAE in order to avoid

facing the justice system. This is obviously a far greater

risk when a defendant is a foreign national, as he is less

likely to have any community ties discouraging him

from leaving the UAE for long-term. In such cases, one

condition that the judge may consider imposing in

order to alleviate risk is the appointment of a

Guarantor.

In reality the UAE law appears to provide relatively little

guidance on the subject of bail, with a defendant’s

status and any conditions of bail being at the discretion

of the presiding judge. However it is often the case that

bail is awarded in instances where there seems to be a

lack of sufficient evidence against the defendant.

Pursuant to Article 106 of Federal Law Number 3 of 1987

(the Penal Code) a person’s previous criminal

convictions (where the convicted crime or felony was

punished by any measure other than a financial penalty)

must be also be taken into consideration. The public

prosecution, either voluntarily or upon the application

of the defendant, may release the latter on bail if the

prescribed penalty for the crime of which he is accused

is neither the death penalty nor life imprisonment. In

most cases the defendant’s remand status will be

re-assessed on the expiry of the preventative detention

period set by the public prosecution, which shall usually

be either 21 days, or upon consideration by the court.

This is often due to Guarantor’s ignorance of his

liabilities, and may lead to a situation whereby

Guarantor finds himself in a worse position than the

defendant should the defendant abscond. In this article

we shall discuss most significant liabilities of the

Guarantor, and consider the factors a person may wish

to contemplate before taking on such a role.

Further to the provisions of Article 122 of the Penal

Code, one condition of bail commonly utilised in the

UAE is the submission of a personal or financial

guarantee as determined by the public prosecutor or

the judge, on the specific terms set forth by the same.

A Guarantor is the person who guarantees the conduct

of the defendant upon being released by the public

prosecution or the judge. The obligations of a Guarantor

are entirely different to those of a work sponsor or

residence sponsor, and regularly give rise to

complicated issues that may have severe consequences.

Court Uncourt 5

Bail Fail?Liabilities of the Bail Guarantor

e’ve all seen the images of prisoners arriving

at court for their hearings, seated in

high-security vehicles with small circularwindows, with photographers clamouring for a prime

position in order to take photographs through the glass.

However not all defendants are required to arrive at

court in such a manner. Although several are held in

custody during proceedings and are transported to

court as and when required, others are granted bail and

are not confined, often subject to conditions set by the

judge or public prosecution.

WWhen may a defendant require a Guarantor?

continued on next page

UAE law does not define the concrete meaning of Personal

Guarantee, and as such the terms of the definition are subject to

the discretion of the bail order. The concept allows for the

defendant to issue guarantee on his own behalf, or to be

guaranteed by a third party, by surrendering the relevant

passport to the court (this will be the defendant’s passport

where he is acting as a self-guarantor, and both the third party’s

and the defendant’s passport when a third party is the

guarantor). In rare cases and under certain conditions the

guarantor may be an entity or legal person, for example a

company or the defendant's consulate. A Financial Guarantee is,

as the name suggests, monetary funds paid into the court, to be

returned to the guarantor on the issuing of the judgement in

the defendant’s case, or forfeited in the event that the

defendant fails abide by his bail conditions. A Financial

Guarantee can be paid in three ways: it may be deposited in

cash in the court treasury, submitted vide a bank guarantee

pursuant to conditions determined in the release order, or to be

retained by the guarantor, on the condition that it is

surrendered to the court through one of the aforementioned

methods in the event that the defendant breaches bail.

Dubai prosecution and the courts regularly set both Personal

Guarantees and Financial Guarantees as joint conditions of bail.

Almost without exception, in cases in which the defendant is a

foreign national the surrender of his own passport will be an

inevitable prerequisite of his release, with the presiding

authorities often requesting an additional Personal Guarantee

and Financial Guarantee of an amount set at the tribunal’s

discretion. The reasoning behind this may well be that although

the seizure of the defendant’s passport may prevent him from

leaving the UAE, it cannot ensure that he will attend court as

directed or be of good behaviour in the interim. Ordering a third

party Personal Guarantee and a Financial Guarantee in addition

to this may therefore create incentive for the defendant to

remain compliant throughout proceedings.

Can the courts request both a Personal Guarantee and a Financial Guarantee?

What are Personal Guarantees and Financial Guarantees?

6 Court Uncourt

The Guarantee/Bail Bond is the form issued by the court and signed by the Guarantor under

which the Guarantor guarantees that the defendant will act in accordance with the terms of bail

set forth by the court. There is no precedent form that the Guarantee Bond must take, but it is

likely to include (without limitation) the defendant’s charge, personal details of both the

defendant and the Guarantor, the undertaking content, and the penalty due in the event of

violation. As per Article 113 of the Penal Code the Guarantee Bond may be deemed as an

executive deed and any monies due there under may be perused through the civil courts in

keeping with the Civil Procedures Law.

On signing the Guarantee Bond the Guarantor becomes liable for attendance of the defendant

upon being summoned by the investigative body or the court, and for the execution the

judgment issued against the defendant. The Guarantor’s liability ends only on the execution of

the determined sentence as passed by the court, Orin the event that the defendant is irrevocably

exonerated. In the majority of cases the Guarantee Bond will include an undertaking by the

Guarantor to accept liability with regards to the aggrieved party, including any penalties,

compensations, or subsequent civil action.

The liability of the Guarantor may not appear to be excessively extensive when considering that

the defendant might breach bail by failing to attend an investigative or court session, as the likely

consequence is that the Guarantor will forfeit all or some of the Financial Guarantee. However a

Guarantor should also consider the consequences in the event that the defendant does not

comply with the requirements of any judgement issued against him. In such an instance, the

Guarantor must be aware that he personally shall fall financially liable for any fines or cost orders

made against the defendant up to any amount as is prescribed by law. In some cases, this may

amount to hundreds and thousands of dirhams.

Problems will inevitably rise if the Guarantor is unable to meet the financial liabilities he has

incurred under the Guarantee Bond. In such cases the Personal Guarantee (namely the passport)

of the Guarantor may remain under seizure for years on account of his failure to ensure the

compliance of the defendant and / or pay such funds so as to allow for the execution of

judgement. Therefore anyone considering acting as Guarantor should be fully aware with the

content of the Guarantee Bond and the extent of any financial fine available in law for the

relevant offence. In addition to this the prospective Guarantor should have sufficient confidence

that the defendant will attend court as required and not abscond whilst on bail.

What is a Guarantee (bail) Bond?

What does being a Guarantor involve?

To what extent is the Guarantor liable?

Court Uncourt 7

As a layman, the sight of abandoned fancy cars at

reserve car parks and tales of unpaid credit card dues of

colleagues’ friends do not appear alien to those who

have been part of this robust economy in any way.

While the United Arab Emirates has enjoyed an image

of being a safe haven, it has often been slammed with

comparisons to a cab where you enjoy the ride until

you pay as per the meter.

Perhaps a sharp comparison to the above idiom would

be the times before the global economic crisis, when

things were right and the jaunt was continuing. Banks

granted credit cards without the need of exhaustive

preventive sureties. Personal loans and investment

offers were on a rise. While the rationalists enjoyed the

privileges of multiple credit card deadlines as means of

managing personal finances, these multiple credit lines

for defaulter led to registration of absconding cases

and non-traceability even before an alarm could be

raised.

One would question the know-your-client capabilities

of the lender and debate how a defaulter from one

bank in UAE was able to obtain another facility from a

different lender. In the respect, the challenges faced by

the banks have been many. Primarily, there was a lack

of legislative provisions for KYC guidelines and

secondarily a centralized credit control board never

existed. The modus operandi was based on ‘profits

maximization module’ rather than a ‘pre-emptive

module’ arising out of streamlined nexus between the

lenders.

Unlike the United States or the United Kingdom, the

concept of ‘credit history’ has been quite restricted in

UAE. In US, every time you apply for a loan or accepted

credit from a bank, your bank would pass on details of

your accountability in paying back credit to a central

board which will then create your credit history. So

when you apply for a credit facility with another lender,

he is able to access your credit history for your past

transactions. In UAE, the only concept of credit history

has been a salary certificate confirmation as most of

the banking information is not shared within the public

domain. The effects of bad debts and piling loans on

banks therefore became detrimental for UAE’s financial

sector.

he need to restore capital buffers in the wake of

‘bad debts’ forced more than one British bank (s)

in the United Arab Emirates to wind up their partial operations. On similar notes, the acquisition of

subsidiaries of internationally stable investment banks

within this region on account of dwindling profits can

be again attributed to ‘bad debts’. The investment

climate in Dubai has always been inviting yet seldom

predictable.

The payment of debts is necessary for social order. The non-payment is quite equally necessary for social order. For centuries humanity has oscillated, serenely unaware, between these contradictory necessities.

8 Court Uncourt

SAFEGUARDINGUNPAID CREDIT LOANS

-Simone Weil

T

In a move to regulate the credit environment and overcome the

above challenges, the United Arab Emirates issued Cabinet

Resolution No. 16 of 2014 Concerning the Executive Regulation of

the Federal Decree Number 6 of 2010 in regards to credit information

(the Law); establishing the Al Etihad credit Bureau (AECB).

AECB, the first nationwide credit control agency in UAE has become

operational in the last quarter of the year 2014. It has collated 24

months of data from almost 70 banks as well as other credit data

providers like telecommunication agencies and other government

bodies across the UAE. Initially the byelaws for the AECB provided

that only federal and local entities, investment companies, financial

institutions, leasing companies, professional establishments,

cooperative societies and branched of foreign companies registered

in UAE may obtain the credit information from AECB by making an

application. Later, provision was made for individuals to obtain their

credit report by payment of a nominal fee of AED 110. Therefore, all

the entities named above will be in a position to benefit from the

database of the AECB.

The concept of control bureaus or credit control agencies, although

new to UAE, has been a long awaited step by lenders and borrowers

alike. The report provided by AECB will include information regarding

defaults in payments, refusal or any decisions issued against the

person. The report will not issue information on mortgaged assets

value, investments value or any other such information that is not

requested by the applicant. AECB operations are specific to providing

details of the credit community for individuals. However, this will

extend in due time to provide information and credit history of local

companies, cheques bounced by these companies and so on.

Without doubt, the establishment of the credit control bureau will be

a blessing for the banking sector enabling them to analyze the

burden of over lending and the same time minimize the risk

associated with lending.

Court Uncourt 9

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

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.

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.

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

10 Court Uncourt

eadache? 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.

H

Registration andImportationof Pharmaceuticals in UAE

It is, however, worth noting here than only entities that are themselves registered with the Ministry of Health may

apply for product registration. Therefore if a company wishing to import the relevant pharmaceuticals into the UAE is

unregistered, it must first complete these supplementary requirements before submitting the application as above. It

shall be a further condition that the company also submits a valid company registration certificate as issued by the

UAE Ministry of Health Drug Control Department.

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?

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:

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.

Court Uncourt 11

A statement from the company declaring that the product is free from any hormones, heavymetals, antibiotics, steroids, derivatives of pork and any natural and chemical ingredients with the potential to cause harmful e�ects 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 speci�cations 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 certi�cate 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; andCD containing artwork (outer, inner label and insert) of the product.

It seems reasonable to conclude, then, that the pharmaceuticals which we procure in one easy step from our local

drug store have been subject to not only rigorous laboratory research and scientific testing, but also to lengthy

administrative procedures before landing on our shelves. Some considerable headaches are necessary in order to cure

a headache!

12 Court Uncourt

hen one thinks of a hospital, the image

that pops up in one’s head is that of

doctors, emergency rooms, operating theatres and ambulances. What we fail to recognize is

that for all of these elements to come together and

provide effective medical treatment, it is imperative

that the hospital is properly managed. A hospital is not

just a medical institution but also a business and it will

or should have a corporate structure in place. Hospitals

and health systems across the world are constantly

struggling with issues of governance, especially in the

aspects of standardization and quality improvement. It

has been difficult to establish clear channels of

communication and clear lines of accountability for

the innumerable committees, departments and

business functions in a healthcare environment. This

can certainly result in poor standards of care towards

patients. What is compulsory for the efficient

governance of hospitals? It is necessary for there to be

an effective use of funds, professional and competent

management and streamlined governing and

reporting structures. By establishing and maintaining

the public’s trust, being good stewards of the

community’s resources, and ensuring high quality care

Hospital Administrators can be an important asset on

the governing board in fulfilling those duties.

Administrators add the perspective of the patient care

process as well as a unique understanding of family

issues; they grapple with overall health care concerns

such as staff shortages, patient safety and quality of

care; and they are the most knowledgeable about

diseases and new treatment modalities, as well as

being aware of the ethical dilemmas posed by new

technologies. His Excellency Sultan Bin Saeed Al

Mansoori, the UAE Minister of Economy, has called for

institutions to embrace corporate governance as “an

institutional capacity, rather than a regulatory

requirement”.

Let’s take a look at a few example of countries where

such principles have been embraced in the systems of

governance in medical institutions. The Healthcare

Governance & Transparency Association (HeGTA) is an

Egyptian non-governmental, non-profit organization

founded in 2012 with the vision of promoting

governance and transparency in the healthcare sector,

in order to enable healthcare reform and to create

investment opportunities. HeGTA aims to contribute to

a healthcare system which is based on accountability,

equality, fairness, efficiency and quality by the creation,

pooling and dissemination of knowledge. Similarly in

the United States, the U.S. Agency for International

Development (USAID) is an independent federal

government agency that receives overall foreign policy

guidance from the Secretary of State. Its work supports

long-term and equitable economic growth and

advances U.S. foreign policy objectives by supporting

agriculture and trade, global health, democracy,

conflict prevention and humanitarian assistance.

Governance is important work, and how well it is done

has significant consequences for health care

organizations, the communities they serve, their

patients, medical staff and employees. A technology is

a set of principles for solving problems and seizing

Zooming In On PublicHealth InstitutionsCorporate Governance In The UAE“When it comes to health, your zip code matters more than your genetic code.”

Dr. Tony Iton

W

Court Uncourt 13

opportunities. A key element of the public sector is that services are provided for the public good, suggesting that the

public sector may have a higher sense of purpose in what it does than the private sector. Another difference lies in the

fact that people who use public services may not be ‘willing customers’ - as may be the case with health care. Hospital

governance is based on the two pillars of accountability and transparency. As the provision of health care is a ‘social

good’ each group of stakeholders merit recognition. Resources are one of the most pressing issues in hospitals. Issues

such as value for money, the reorganization of the health service and patient satisfaction has served to drive the

governance process forward. International organizations like Joint Commission International, which is a US-based

body, are now in place to award accreditation to institutions based on their compliance with various international

standards. However these not only assess elements such as patient care and medical standards, but also consider

systems of corporate governance and management.. Therefore such schemes would appear to have put governance

on the agenda of the health service and hospitals in particular across the world.

Currently the prevailing conditions in so many hospitals in the UAE are the subject of discussion in terms of the

management and facilities being provided. This may well be as a result of the fact that there is as such no regulatory

framework available for the governance of public health institutions. However health institutions are supervised by

the health authorities and there are provisions for internal committees, such as committees for ethics and compliance,

wherein an employee can lodge his complaints against the management or report any mishaps in the system as a

whistleblower. Moreover in a region with a low percentage of listed companies and a high percentage of family

businesses, a lack of regulation cannot be seen as an excuse not to adopt a formal corporate governance framework.

In order to reach this level of integrity and reform, some structural solutions need to be taken into consideration.

Research and interviews reassured the idea that the most promising way to solve current grievances is the

implementation of governance. If leveraged upon, the efforts for a promising solution to do this have the potential to

create unparalleled success in hospitals. It also bridges the gap between the social and humanitarian mission of the

hospital on one side, and its organizational nature on the other.

According to the Millennium Development Goals access to basic health care is central to the poverty reduction

worldwide. Hospitals constitute a very significant part of the overall health care sector and they provide essential

services to the public.

14 Court Uncourt

So, where should we start? As we have discussed in previous articles, there are several limbs to every legal practice

area, niche or otherwise, and each area may be governed by its own separate set of rules and regulations. Therefore

in the interests of saving both paper (see our recent piece

on the environment and construction waste) and your

time we shall concentrate our attention on one specific

area – namely “how is the media controlled by law in the

UAE”? Yet in order to do this we should first consider the

basic definition of media in accordance with the law. In

the USA, the First Amendment to the Constitution refers

to the media as the “gathering, publishing and

distributing of information and ideas”. In Europe, the

European Convention on Human Rights cites the

“receiving and imparting of information and ideas”, and

goes so far as to specify the inclusion of broadcasting,

television and cinema. In the UAE…

And this is the problem. In the UAE there appears to be

an inherent lack of law pertaining to the media. Or no

up-to-date law, at least – which is a glaring omission in a global society which is creating so many new media platforms on a daily basis that our brains and electronic devices

often struggle to process them all. The fact that revisions to the existing legislation were suggested in 2009 and again

in 2013 implies a national acceptance of the inadequacy of the current provisions, but no proposed drafts have as yet

been incorporated into law.

So what of the current position - how is the media controlled by law at present, and what reforms do the 2009 and

2013 propositions and subsequent debates suggest are needed? Perhaps the most obvious element of discussion

that will come to mind when combining the terms “media” and “control” in a sentence is freedom of press – namely,

the freedom to publish information, ideas or opinions without suffering repercussions. This is by no means a new area

of discussion, with international phenomenon’s such as the British privacy injunctions controversy of 2011 still fresh in

the minds of many. Cases such as that of ex-F1 boss Max Mosely and News of the World before the European Court of

Human Rights characterize the nature of the long-standing deliberation: which should prevail – the right to privacy,

RE-MEDIA-L?Control of the Media in UAE Law

f the head of STA was to look at the internet tabs open on our computers right now he’d wonder if we had done

any work today, with Facebook, BBC News, The National, Buzz feed, the Financial Times and various national

publications from around the world all featuring on our title bars. Fortunately (and for once) I have anexcuse – each and every one of these websites falls within the category of “media”, which is the focus of this article.

Well, “media law” specifically, but I’m hoping he won’t probe in too much detail.

I

Court Uncourt 15

or the right to free speech? Of course, our avid readers will be aware that Volume I Issue VI of Court Uncourt included

an article on defamation, which carried a full analysis of the UAE’s position with regards to this debate and outlined

the fact that the publication of potentially defamatory material can result in severe consequences, particularly if the

means of publication is via the press. In pursuit of avoiding repetition we won’t go into too much detail here, save for

to say that Articles 372 and 373 of Federal Law 3 of 1987 (the Penal Code) respectively provide that “whoever

attributes to another person, by any means of publicity, an incident which makes him liable to punishment or

contempt shall be punished by detention for a period not exceeding two years or by a fine not exceeding twenty

thousand dirhams” and “detention for a period not exceeding one year or a fine not exceeding ten thousand Dirhams

shall be imposed upon anyone who, by any means of publicity, disgraces the honor or the modesty of another person

without attributing any particular act to the defamed party”, with the additional clarification that “if libel is committed by means of a publication in any of the newspapers or

other printed media, it shall be considered an

aggravating circumstance.”But what other legislation

provides any rights or restrictions with regards to the

media’s freedom of speech? There is a plethora of

guidance on the “media” in general, with Federal Law

Number 7 of 2002 dealing with copyright, Council

Decision Number 35 of 2012 regulating advertising

and Cabinet Decision 14 of 2006 controlling the

National Media Council – but the law appears to

remain silent on actual media content.

The only provisions of strict relevance, then, seem to

be those of the Penal Code. It therefore seems

reasonable to assert that the current law does not

promote freedom of press insomuch as it highlights

restrictions of press. As UAE media law expert Dr Matt J. Duffy suggests in an article published by Gulf News on 23 March 20121 , it would appear that the present law restricts

what the press can do, rather than offer any protection over what it may do.

In an amalgamation of the foregoing, head of the National Media Council Sheikh Abdullah bin Zayed announced in

2013that in a poll analyzing the freedom of expression afforded to media and the consequential punishments, the

UAE ranked 158th out of 196 countries. Evidently this is an exceptionally poor placement, especially when considering

the fact that the UAE is accustomed to topping the league table in the majority of positive surveys in which it takes

part. However, Sheikh Abdullah qualified his announcement with the explanation that the poll considered only the

legislative position – not the actual practice of a country. Therefore the fact that journalists and other media

professionals are not expressly protected in law does not automatically mean that the UAE deals out harsh

punishments to any such person exercising his right to free speech. Still, the point remains that in order to both

improve its ranking and provide clearer guidance to the press, the UAE must establish a definitive and up-to-date law

with regards to the media.

1 http://gulfnews.com/opinions/columnists/revised-media-law-for-the-uae-1.998464 continued on next page

16 Court Uncourt

It is worth noting here that almost every law in every jurisdiction is developed in accordance with the country’s

culture, history and values, often in accordance with precedent emphasizing the need for such legislation.

Accordingly, any media (or indeed, any other) law implemented in the UAE would need to bare such factors in mind.

As Dr Duffy states in his aforementioned article, we could not simply lift one country’s media laws and bring them

into force in the UAE – any law introduced here would need to pay respect to the presiding social and cultural

customs. A good starting point may therefore be the Content Code (the Code) of Abu Dhabi’s Media Zone Authority

(MZA) as issued in 2011. On acknowledging the influential capacity of the media, the Code emphasizes that caution should be exercised (an industry-specific application of the wise words of

Spiderman’s Uncle Ben – “with great power comes great responsibility”)

and outlines the importance of preserving the nation’s ethos by stating as

a Key Principle that “The Code recognizes the importance of balancing

freedom of expression with a duty to take account of the cultural and

social expectations of society”.

An initial understanding would therefore give the impression that the

Code strikes a reasonable balance between the UAE’s constitutionally-

enshrined right to free speech and its national values, such as privacy. Yet

in reality it is likely to be the case that many matters fall into the grey area

between the two principles, whereby publication of the story would

breach the privacy of the protagonist, but prohibition of publication

would be inconsistent with the publisher’s right to free speech. As

discussed in our article on defamation, in these circumstances many

European courts have applied the test of public interest – namely, is it in

the interest of the public to know the cited information? In light of the UAE

law’s silence on the issue, the Code requires that the publication of

controversial material meets its standards of “Editorial Justification”.

Outlined in the “Definitions” section, Editorial Justification is “the reason the licensee has made and disseminated the content”. The Code goes so far as to specify that anyone considering the

justification of releasing information into the public domain should consider factors including the artistic and

creative merit of the contents, whether the information is beneficial to the public (for example, whether it is in the

interests of public safety or exposes injustice) and whether the information can be proven as factually accurate.

Of course, this guidance is without limitation, and there are no cast-iron rules or examples in place controlling the

content of published or broadcasted material. The Code’s Editorial Justification therefore leaves scope for the

application of the publisher’s discretion. Yet it goes without saying that certain considerations are mandatory, and

the Code therefore lays down express rules with regards to aspects which must be taken into account. For example,

Rule 2 regulates content which has the potential to cause harm or offense, with material such as that which is violent,

sexual, discriminatory, distressing or inclusive of explicit language confined to instances whereby it is contextually

Court Uncourt 17

In addition to regulating content, the Code goes so far as to offer guidance on the conduct of media-based entities.

Rule 5 requires that the dissemination of all forms of news are reported impartially and with factual accuracy, with Rule

6.1 clarifying that editorial bodies have the responsibility of ensuring that material facts are not presented, edited or

omitted in such a way that is adversely unfair on any party. In addition to paying respect to the aforementioned provisions of the Penal Code, Rule 7 (pertaining to privacy) introduces

provisions prohibiting the intrusion of any electronic devise, such as email

or mobile phone communications (Rules 7.2 and 7.4). Although such

guidance must be read in conjunction with the applicable legislation,

these rules go some way towards demonstrating the way in which the

Code would provide a strong foundation for an up-to-date media law

consistent with the requirements and risks of modern society.

justified. Moreover the Code requires that clear warnings precede any potentially harmful or offensive content. The

protection of children from any age-inappropriate material is also paramount pursuant to Rule 1, as is the insurance

that crime, public disorder or anti-social behavior are not expressly or inadvertently encouraged (Rule 3).

In the same way that this is by no means an all-inclusive summary of the

Code, the topic of the freedom of press is not the full extent of “media

control” in the UAE. It is not only the publication and/or broadcasting of

media content that is subject to regulation, but also the governing and

ownership of the media entities themselves. Pursuant to Article 2 of Federal

Law Number 15 of 1980 (the Publishing Law) the owner of a printing press

must be a qualified UAE national without any criminal convictions.

Likewise, as per Article 25, the owner of a newspaper must also be a

qualified UAE national in excess of 25 years of age, free from convictions

and not under the employment of any public service or foreign agency.

Evidently separate provisions are in place with regards to entities

established in free zones, and locations such as Dubai’s Media City, Internet City and Knowledge Village would be

viable options to any foreign investor wishing to partake in the media spectrum. Here, and in accordance with Council

Decision Number 1 of 2006, licenses are available not only in the publishing segment, but also in the TV and radio

broadcasting industries.

Yet regardless of the field, licensing type, current law and location within the UAE, the fundamental principles of the

media industry remain the same. Any players within the media and broadcasting game should therefore proceed with

caution when balancing their rights alongside the underlying values of the nation. As philosopher John Stuart Mill

observed, “the individual does have the right of expressing himself. So long as he does not harm others”.

18 Court Uncourt

bu Dhabi, the capital of UAE is the striking

example of change and exemplary growth.

The visionary thinking and the aim to diversify its oil based economy has led the Abu Dhabi

government to conceive Vision 2030. Abu Dhabi’s

Vision 2030 is a comprehensive plan to optimize the

development of the Emirate through a program

promoting urban evolution with the aim of promoting

its long term economic viability. Khalifa Industrial Zone

Abu Dhabi or better known as KIZAD is the new

industrial zone operating under a framework of

regulations created by the Abu Dhabi Ports Company.

KIZAD was established after a careful study of existing

industrial zones within the UAE and the Gulf region

which means that KIZAD has already had the helping

hand of other regions’ mistakes.

One of the prime questions that one has when

establishing or expanding a business is the location of

the business in line with the world markets. KIZAD was

established in a location which is halfway from the

major economies of Dubai and Abu Dhabi with close

proximity to three major airports in the region. It was

conceived keeping in line with the demands of the

industrial development and has an extensive rail and

port network incorporated within the plans. The

expansion within KIZAD will also be strategic as it is the

first industrial zone in the region that gives the

investors the option of free zone ownership as well as

non free zone. The companies established outside the

free zone will be regulated by the relevant laws of Abu

Dhabi while the companies established as free zone

entities within KIZAD will be governed by the rules and

regulations of Abu Dhabi Free Zone Authority (ADFZA).

It must be kept in mind that both forms of companies

have the same process when it comes to land

registration however the industrial licenses are

obtained from different regulatory bodies. In case of a

non-free zone entity, the industrial license will be

issued by Zones Corp whilst the issuing authority for

free zone licenses will be ADFZA.

KIZAD and its officials continue to work single

handedly to ensure that there is a streamlined process

to obtain permits, clearances and licenses. The officials

aim to ensure that each business in KIZAD is allocated

to a dedicated relationship manager who will be based

in the industrial zone and will have the necessary skills

and knowledge to assist the businesses.

The officials in KIZAD are also ensuring that each

investor and their business are allocated a plot of land

according to their needs and requirements for example

a manufacturer or heavy goods is given access to the

modular path that runs directly to the port. The KIZAD

officers have simplified the application and set up

process. The applicants are requested to fill out an

initial application form and submit a fee to KIZAD. This

form is then forwarded to the plot allocation

committee that reviews the application and the

requirements for the industrial project and offers the

most appropriate and available land parcel to the

applicant. The applicant has forty five (45) days to agree

to the offer or request the committee to consider

revising the allocation of the plot if not suitable. Upon

signing of the offer, KIZAD officials prepare the

preliminary agreement which allows the applicant six

months time to allow them to qualify any pre requisites

for the industrial license such as conducting

environmental studies. Following this the final

A

KIZAD

Court Uncourt 19

agreement is signed and the applicant can apply for a preliminary industrial license. Once all the licensing stages are

concluded, the applicant is then to sign a Musataha agreement. This agreement gives the applicant a long term right

in the property and the land can be registered at the Land Registry Department in the name of the applicant. This

agreement also ensures that the investor has all legal rights over any assets developed on the land within KIZAD. Each

company that enters into a Musataha agreement are subject to KIZAD’s rules and regulations. Once this agreement is

signed, the applicant can begin construction and its operations. Once the construction is completed, the applicant

can apply for a permanent industrial license.

KIZAD is the perfect symbol of Abu Dhabi Vision 2030 being applied. It is set to become the foremost industrial zone

of the region and has managed to attract industries that have the foresight to be a part of the tremendous growth it

promises. The development of KIZAD has paved the way for investors who will be at the forefront of long term growth

and sustainable government investment. KIZAD also offers the foreign investor to have extended property rights in

the region which is another advantage. It is expected that KIZAD will be the industrial powerhouse that is needed by

the Emirate of Abu Dhabi to turn their dream of diversified economy into a reality.

1 http://kizad.com/en/article/how-to-apply/application-process.html

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