Tag: Covid 19

Employment Measures for Dubai International Financial Centre (DIFC) Employers During COVID-19

Presidential Directive No. 4 of 2020 (Directive) is the most recent measure taken in the DIFC to ensure proper management in the DIFC during COVID-19.

 

The Directive, issued on 21 April 2020 with immediate effect, announced employment and workforce measures which shall stay in effect up to and including 31 July 2020 (referred to herein as COVID-19 emergency period).

 

We will discuss in this inBrief employment measures included in the Directive. In so far as may be required to facilitate the implementation of employment measures included in the Directive, the Directive will supersede other relevant provisions contained in Law No. 2 of 2019 (DIFC Employment Law).

 

Emergency Employment Measures

 

During the COVID-19 emergency period, employers may impose one or more of the following employment measures in respect of any of their employees:

 

• reduction in working hours

• vacation leave

• leave without pay

• temporary reduction in remuneration

• workplace access restriction

• remote working conditions including remote working requirements

 

To that effect, the following provisions in the DIFC Employment Law shall not apply to employees during the COVID-19 emergency period:

Article 14(3)

 

‘Any amendment to an Employment Contract must be in writing and signed by both the Employer and Employee, unless such amendment is of an administrative nature only, in which case the Employer shall be required to record such amendment in writing and to give written notice thereof to the Employee prior to the amendment taking effect.’

 

Article 29(2)

 

‘The Employer may require an Employee to take Vacation Leave on specified days in the current Vacation Leave Year by giving at least seven (7) days prior written notice to the Employee.’

 

Article 30(1)

 

‘Vacation Leave accrues during an Employee’s first year of employment on a monthly basis at the rate of one-twelfth (1/12) of the Employee’s annual entitlement to Vacation Leave.’

 

Article 4(1)(b)(i) of the DIFC Employment Law, stating the physical location of employees to whom the DIFC Employment Law applies, is deemed to be satisfied for employees who work for employers in or from the DIFC by way of remote working during the COVID-19 emergency period.

 

An employer wishing to apply any of the above measures can do so without the prior consent of the affected employee. The employer is required, however, to give five days prior notice in writing to the affected employee.

 

COVID-19 Related Sick Leave 

 

Under the Directive, sick leave taken by an employee during the COVID-19 emergency period as a consequence of having contracted COVID-19 or for being placed in quarantine shall not count towards sick leave entitlement of the employee as stated in the following provision of the DIFC Employment Law:

 

Article 34(1)

 

‘An Employee is entitled to Sick Leave of sixty (60) consecutive or intermittent Work Days in aggregate in a twelve (12) month period. Any references in Articles 35 and 36 to a twelve (12) month period shall be deemed to be the same period as referred to in this Article 34(1).’

 

Additionally, employees in this case shall be entitled to 100 percent of their daily wage for the duration of the sick leave and may not be subject to any of the above emergency employment measures if those measures were not imposed on them prior to taking a COVID-19 related sick leave.

 

Finally, the following provision of the DIFC Employment Law shall not apply in the case of a COVID-19 related sick leave:

 

Article 36(1)

 

‘Where an Employee takes more than an aggregate of sixty (60) Work Days of Sick Leave in a twelve (12) month period, the Employer may terminate the Employment Contract with immediate effect on written notice to the Employee.’

 

 

Working Conditions

 

The following provisions of the DIFC Employment Law (both inclusive) do not apply to employees that are working remotely during the COVID-19 emergency period:

 

Article 43

 

‘General duties of Employers

 

1) An Employer has a duty to ensure, as far as is reasonably practicable, the health, safety and welfare at work of all its Employees.

 

2) An Employer shall provide and maintain a workplace that is free of discrimination and victimization and without risks to an Employee’s health and safety.

 

3) An Employer who contravenes Articles 43(1) or (2) is liable to a fine as set out in Schedule 2.’

 

Article 53

 

‘No penalties for preventing health and safety risks

 

An Employer shall not dismiss or otherwise penalise, directly or indirectly, any Employee for:

 

1) carrying out activities that may reasonably be considered to prevent or reduce risks to health and safety in the workplace where the Employee has been specifically designated to do so; or

 

a) taking reasonable steps to avert serious and imminent danger or for refusing to return to

 

b) the place of danger until the danger no longer exists.

 

2) An Employer who contravenes Article 53(1) is liable to a fine as set out in Schedule 2.’

 

Visa and Permits of Terminated Employees

 

During the emergency period, employers may defer the cancellation of residency visas of terminated employees provided that the employer continues to provide basic medical insurance and accommodation (where the terminated employee is dependent on the employer for accommodation) until the cancellation of terminated employees’ visas. No other core benefits or rights shall accrue in favour of terminated employees who remain on an employer’s sponsorship during the COVID-19 emergency period.

 

The following provision of the DIFC Employment Law shall not apply in the case of terminated employees during the COVID-19 emergency period:

 

Article 57(3)

 

‘If an Employee is sponsored for UAE residence visa purposes by their Employer, the Employer and the Employee must cooperate to ensure the cancellation of the Employee’s UAE residency visa as soon as reasonably practicable following the Termination Date and by no later than thirty (30) days following the Termination Date.’

 

DIFC Available Employee Database

 

The Government Services Office in the DIFC shall create and maintain the DIFC Available Employee Database (Database) consisting of employees that have been terminated or those that are surplus to employers’ need during the COVID-19 emergency period. This Database may be shared with any other competent authority maintaining a virtual labour market during the COVID-19 emergency period. DIFC employers wanting to employ new employees during the COVID-19 emergency period may search the Database.

 

Gratuity Payment Protection

 

The Directive ensures that end of service gratuity payments will not be adversely affected by the implementation of any of the Directive’s emergency measures. For purposes of Article 66(1) and Article 66(6) of the DIFC Employment Law, gratuity payments during the COVID-19 emergency period for all employees will be calculated by reference to an employee’s basic wage as at 29 February 2020.

 

Any shortfall of gratuity payment by employers who terminated employees subsequent to 1 March 2020 and prior to the issuance of this Directive shall be rectified by the employer topping up the shortfall. ■

 

New measures implemented by the UAE authorities in response to COVID-19 (25 April 2020)

Below is a summary of new developments and key new measures that have been implemented by various UAE authorities since 19 April 2020 and the time of this inBrief, 6:00 p.m. on Saturday, 25 April 2020.

 

I. First Phase of Easing of Lockdown and Movement Restrictions in Dubai

 

The Supreme Committee of Crisis and Disaster Management has announced a partial reduction in the restrictions on movement in Dubai starting from Friday 24 April 2020.

All individuals must follow preventive measures including ensuring two-metre distance from other individuals and wearing face masks. Those who do not wear a mask will be subject to a fine of AED 1,000.

 

A. Movement of the general public

 

• Individuals will be able to leave their homes between 6:00 a.m. and 10:00 p.m. without a permit.

• Exercising outside the home: Members of the public are allowed to exercise outside their homes provided they do not leave their area of residence. They can undertake activities such as walking, running or cycling for one to two hours each time. Only a maximum of three persons can exercise at the same time.

• Members of the public are also permitted to visit first and second-degree relatives. Gatherings should be restricted to not more than five people. However, visiting high-risk individuals (individuals above 60 years and those with underlying medical conditions) should be avoided. It is prohibited to hold gatherings in public or private places.

• Ramadan tents and Majlises are not allowed within homes and in public places.

 

B. Shopping malls and commercial outlets

 

• Shopping malls, markets and commercial outlets will be open daily to the public from 12:00 p.m. to 10:00 p.m. Furthermore, restaurants and shops are allowed to operate at a maximum of 30 percent capacity at the shopping malls.

• Malls and retail outlets are not allowed to hold entertainment events to avoid congestion and crowding.

• There will be no valet parking at malls and restaurants. The first hour of parking in shopping malls will be free.

• Only 25 percent of the parking spaces will be open in order to reduce overcrowding in malls. The public should visit a mall only when absolutely necessary.

 

C. Restaurants and cafés

 

• Restaurants and cafés are allowed to operate normally but are not permitted to serve shisha and buffet. Dine-in customers are allowed but should occupy only a maximum of 30 percent of the outlet’s capacity.

 

D. Public transport

 

• Public transport services, including Dubai metro services, will be resumed from Sunday 26 April 2020. The normal tariff system will be reintroduced.

• Red and green line metro services will operate between 7:00 a.m. and 11:00 p.m.

• Preventive measures should be strictly followed by all passengers and staff in metros, taxis and buses and at public transport stations including maintaining physical distance and wearing face masks.

• Only two passengers are allowed in one taxi.

• Water transport, tram, limousine, and car sharing services will continue to be suspended.

 

E. Administrative offices for companies and institutions

 

• A maximum of 30 percent of the workforce of all organisations will be allowed to work from their offices while the rest will be required to work from home.

• Meetings should be held at the office only if it is absolutely necessary. Attendees should not exceed five people and each person should maintain a two-metre physical distance from others.

• Daily sterilisation of the workplace is mandatory and employees and visitors should be provided with sanitisers at all times. Everyone is required to wear face masks when at the workplace.

 

F. Re-opening guidelines in Abu Dhabi

 

The Abu Dhabi Department of Economic Development issued Circular 26 of 2020 on 22 April 2020 concerning guidelines and precautionary measures for re-opening of malls and shopping centres in Abu Dhabi. Those guidelines are similar to those of shopping malls in Dubai except opening hours will be from 12:00 p.m. to 9:00 p.m.

 

II. Economic Relief Measures

 

A. Dubai World Trade Centre Authority (DWTCA) releases COVID-19 measures to assist with financial sustainability and operational continuity

 

On 22 April 2020 the DWTCA unveiled a series of measures aimed at supporting enterprises within DWTCA to better manage their fixed operating costs and liquidity during COVID-19. These measures include:

 

1. Meetings Incentives Conferences and Exhibitions Business

 

a. for organisers – no cancellation and/or rescheduling fees; no penalties for late payments; allow carry forward of pre-paid fees as credit to 2021; and

b. for exhibitors (DWTC-owned exhibitions) – full refund on cancelled events and where new schedule is not feasible for participants.

 

2. Retail Tenants

Up to six-months rent-free on base rent (1 April 2020 – 30 September 2020) for retail tenants in the Dubai International Convention and Exhibition Centre and One Central, impacted by mandatory public lock-down restrictions (e.g., Government enforced cancellations, and/or temporary facility closures).

 

3. SMEs and Start-up Tenants

 

Up to three-months base rent deferment for DWTCA commercial tenants (1 April 2020 – 30 June 2020).

 

4. Free Zone Businesses (effective for three months starting April to June 2020)

 

• seventy percent rebate on annual fees for all category-specific business registrations and licenses (new and renewal);

• fifty percent rebate on annual fees for general trade licenses and registrations; and

• zero percent administration fee on all visas – new, transfer and renewals.

 

B. Dubai Silicon Oasis Authority (DSOA) stimulus packages

 

The DSOA announced on 19 April 2020 that it would be implementing exemptions, incentives and flexible payment plans for companies, commercial tenants, and residents occupying buildings owned by the Authority.

 

1. Residential Projects

 

a. up to two months deferral on rent payments which can be rescheduled based on a payment plan over the remainder of the lease duration;

b. waiver of late payment fines until 31 August 2020;

c. monthly rental payment plans for existing and new tenants;

d. up to 10 percent discount on rental value upon renewal; and

e. additional discount of AED 2,000 for apartments and AED 5,000 for villas if annual rent is paid on time and in one instalment.

 

2. Retail Sector

 

a. rent waiver from 15 March 2020 for restaurants, shops, and gyms impacted by the closure until work is resumed;

b. postponement of rental payments for a three-month period;

c. waiving late payment fines until 31 August 2020;

d. reducing marketing fees by 25 percent;

e. up to 10 percent discount on rental value upon renewal for existing and new retailers;

f. additional 5 percent discount on the annual rent if paid on time and in one instalment; and

g. offering flexible payment plans.

 

3. Companies 

 

a. postponement of rental payments for a three-month period;

b. waiving late payment fines until 31 August 2020;

c. extending grace period until end of May 2020 for new companies;

d. up to 10 percent discount on rental value upon renewal for existing and new companies;

e. additional 5 percent discount on the annual rent if paid on time and in one instalment; and

f. offering flexible payment plans.

 

4. Dubai Technology Entrepreneur Campus

 

a. postponement of rental payments for a three-month period;

b. waiving late payment fines until 31 August 2020;

c. flexi desk and fixed desk tenants can pay rent in up to six instalments; and

d. additional five percent discount on the annual rent if paid on time and in one instalment.

 

C. Implementation guidelines of the Targeted Economic Support Scheme (TESS)

 

On 19 April 2020 the UAE Central Bank (CBUAE) released an announcement outlining regulations and guidelines in relation to TESS. Some of these guidelines include the following:

 

• Banks are urged to process more applications from individuals, corporations and SMEs whose business operations are affected by the implications of COVID-19.

• Banks are expected to retain sound lending standards and are required to treat all their customers fairly.

• During the validity of TESS, which runs up to year end 2020, banks are expected to postpone the payments of interest and/-or principal of loans for customers/individuals/SMEs and other private sector companies affected by the repercussions of the COVID-19 pandemic.

In addition, TESS includes a liquidity relief tool of AED 50 billion offered by the CBUAE through banks to eligible customers who wish to apply for a deferment.

• The CBUAE has mandated banks to accelerate the account opening time to a maximum of two days for SMEs, unless banks identify the customer as high risk from an anti-money laundering perspective.

• Banks shall not be allowed to require their SME customers to have a minimum account balance amounting to over AED 10,000. This measure is aimed at providing banks’ customers with economic relief and to facilitate the continuation of business operations in the UAE.

• Measures taken by CBUAE include the decrease of the minimum required down payment, to increase the affordability of real estate.

 

D. Service fee reduction by the Ministry of Economy

 

According to Cabinet Resolution No. 20 of 2020, on 21 April 2020 the Ministry of Economy published on its website a list of services whose fees have been reduced by 17 percent to 98 percent.

 

Click here for the updated list which is available in full on the ministry’s website.

 

III. Operations of the Courts

 

A. Dubai Courts

 

The Dubai Courts released Resolution No. 33 of 2020 concerning Remote Litigation Procedures and Continuity of Court Services (Resolution) which came into effect on 19 April 2020. Lawyers or customers wishing to benefit from court services shall use electronic systems of Dubai Courts Department to log into the smart application system. Natural persons would register in the “Al Salifa” system with a verified user account.

 

The following is an overview of the procedures outlined for various legal matters under the Resolution.

 

Matters        Procedure
Filing lawsuits, requests and amicable settlements All lawsuit applications or amicable settlements must be filed remotely through outsourcing offices or law firms or the courts e-system.
Family guidance and divorce certification Family guidance cases and divorce certification are filed and established remotely. Family counsel should send a WhatsApp message to the parties including the date and time of the session, the document required to be prepared by each party, and the action according to the legal proceedings.

On the session day, the family counsellor makes a conference call, using the office telephone or mobile phone, with the plaintiff, the defendant and the interpreter (if applicable).
Marriage contracts, certificates and attestations Marriages contracts shall be processed by legal marriage officers who may use remote communication technology to process these contracts with parties, whether in their presence or online.

Legal certifications and attestations, applications should be filed and fees paid remotely. The attestation officer communicates with the parties and witnesses to check identities and verify the completion of all required documentation and issues the attestation which is then sent to the applicant via email.
Summons and details of the parties All judicial summons, whether at the time of filing cases or notifications of judgements or executive deeds are served by SMS, email or other electronic means.
Remote case management The case department must follow up on the preparation of all cases remotely through video or audio communication technology. Video or audio communication technology includes remote attendance, exchange of documents and issuance of necessary decisions. Attendances and proceedings shall be recorded in the transcript of hearing.
Remote case consideration Remote communication technology will be used in all hearings of first instance, appeal and cassation courts, exchange of documents, hearing witnesses, deliberation, and issuance of decisions and rulings.

Hearing attendance and procedures will be recorded in transcripts of the hearing. Case files must be adjourned where a litigant fails to remotely attend hearings for any reason. The same applies to cases referred to Experts. In order to preserve the rights of litigants, no cases will be dismissed even if the litigant fails to electronically attend the hearings.
Remote expertise Expert appointment orders or decisions will be electronically sent from the competent court to advocates, experts and the Interpreters Affairs Department, and Expert fees deposited remotely through the electronic payment poral available on the Dubai Courts website. Advocates, experts and the Interpreters Affairs Department will delegate an Expert using the electronic system. The Expert then accepts the assignment through the electronic system and reviews the case file electronically. If the meetings are required, they will be held remotely by sending a link to all parties for remote attendance and specifying the time of the meeting. The Expert may submit requests to the competent court and file its report through the electronic system. The Expert then submits a request for disbursement of the Expert fees through the electronic system.
Execution and enforcement of judgements All applications, lawsuits and execution cases must be filed remotely through law firms, via the electronic case management system (Al Salifa) or by using the smart login system (smart applications) if filed by the litigants themselves. Cases and applications for execution will be considered remotely. Persons detained in police stations and penitentiary facilities will be interrogated via video calls.  Applications for paying judgement amounts in instalments and allowing “wanted persons” times and applications for attachments in execution files or cancellation of attachments will also be entertained remotely together with travel ban or ban lifting decisions through the direct link to the CHQ of Dubai Police.

Execution amounts will be deposited remotely through the (Idhafa) online portal for e-disbursement service into the bank account of the judgement creditor. Parenting times and visitation orders will also be enforced only (through) online visitation using video communication programs of courts or competent entities.
Criminal cases All criminal cases and detentions will be entertained remotely and extended using remote communication technology. The defendant’s lawyer may appear with the client during the trial via remote communication technology. If the defendant is a foreigner and is not fluent in Arabic, the court will seek assistance from an interpreter via the remote interpretation room. Courts will also coordinate with Public Prosecution and detention places in respect of remote consideration of criminal cases and extension of detention.

 

B. Abu Dhabi Court of First Instance

 

Further to our inBrief dated 7 April 2020 where we reported on Circular No. 7 of 2020 with regard to continuity of the Abu Dhabi Courts judicial process during the COVID-19 period, the Abu Dhabi Judicial Department announced on 22 April 2020 that the Abu Dhabi Court of First Instance had reinforced its remote litigation system through audio-visual technology, to include all civil, personal status, rental, urgent lawsuits, and inheritance circuits.

 

C. DIFC Courts

 

The DIFC Courts issued a notice on 23 April 2020 stating that the Registry’s physical return to the office will not be on 26 April 2020 as initially planned. It reported that over the past five weeks it has largely been business as usual with approximately 90 percent of hearings being conducted over telephone conference, or where possible, over video conference. The remaining 10 percent of hearings which have had to be postponed due to technicalities such as the swearing in of witnesses, will be listed in the first week after the Registry resumes work from the DIFC Courts’ offices.

 

The following e-mail addresses and contact details for various queries have been provided in the notice. Urgent queries and applications should first be addressed by contacting the Registry switchboard number on +971 4 427 3333 between 8:00 a.m. and 4:00 p.m., Sunday to Thursday.

 

 

Query  E-Mail / Contact
Small Claims Tribunal enquiries sct@difccourts.ae
Case related enquiries registry@difccourts.ae
General enquiries enquiries@difccourts.ae
Practitioner registration enquiries registration@difccourts.ae
Probate related enquiries probate@difccourts.ae
Videoconferencing, Case Management System (eRegistry) and e-bundling enquiries ITHelpdesk@difccourts.ae
Even numbered Small Claims Tribunal (SCT) cases Ms. Hayley Norton

SCT Case Progression Officer

Mob: +971 56 656 5823
Odd numbered Small Claims Tribunal (SCT) cases and odd numbered ENF cases Ms. Mooza Al Ali

SCT Case Progression Officer

Mob: +971 56 5344 531
Odd numbered CFI, ARB, TCD and Court of Appeal (CA) cases Ms. Maitha Al Shehhi

Case Progression Officer

Mob: + 971 54 583 1223
Even numbered CFI, ARB, TCD, Court of Appeal (CA) cases and ENF cases Ms. Alia Al Obeidli

Case Progression Officer

Mob: +971 56 500 3184
All probate (PRB) cases Ms. Maitha Al Shehhi

Case Progression Officer

Mob: + 971 54 583 1223
Registrar on Duty (for urgent applications and emergency queries) Ms. Nour Hineidi

Deputy Registrar

Mob: +971 56 398 9583

E-mail: nour.hineidi@difccourts.ae

(With a copy to the Registry:  registry@difccourts.ae).

 

IV. Logistics and Technology

 

A. TraceCovid

 

Abu Dhabi Department of Health has recently launched an innovative mobile app called TraceCovid. The app can be downloaded and installed by anyone in the UAE using a Bluetooth-enabled smartphone operating on Android or iOS. The app will identify people who have been in close contact with those infected with the virus. The health authorities will be better placed better to quickly start the contact tracing consequently reducing the spread of the COVID-19 virus.

 

To operate, the app requires only two steps – installation and keeping the Bluetooth of the phone turned on constantly. The app relies on Bluetooth signals to detect and identify another device with the same installed app.

 

When two or more app users (with the app installed and running on the mobile phone) come in close proximity/contact, the app will exchange a unique code called the Secure Tracing Identifier (STI). This happens automatically without requiring any action from the user. STIs get stored on respective phones automatically and locally (i.e., not on the servers). When one app user gets infected with the COVID-19 virus the user must, as a normal process, contact a medical centre who will in turn inform the health authorities about the infected user. The health authorities will contact the infected user to request access and upload the user’s “TraceCovid data” i.e., list of STIs. The health authority will request the user’s consent before doing so. The contact tracers from the health authorities will then have the STIs of all the users who were in contact or close proximity with the COVID-19 patient.

 

The shared list of STIs will give health authorities a good starting point to start tracing, identifying, contacting and giving medical guidance to all those people who were in close proximity to the COVID-19 patient.

 

The app works irrespective of users knowing each other. This makes the app versatile and apt for safe community contact tracing to reduce the spread of COVID-19.

 

 

B. DP World’s online logistics tools

 

DP World has launched cutting-edge online logistics tools and services, covering sea, land and air shipping around the world. The connected ecosystem of platforms will enable freight forwarders and any business, to book shipments of cargo from and to anywhere in the world, by any combination of sea, land and air. DP World has accelerated the already planned roll-out of the platforms to help companies meet the challenge of the COVID-19 crisis and keep trade flowing including vital food and medical supplies.

 

V. Visa-Related Matters

 

Extension of DIFC residency visa validity

 

In line with the recent announcement made by the Federal Authority for Identity and Citizenship concerning the extension of residency visa validity until 31 December 2020, the DIFC Authority announced the following measures and guidelines with respect to DIFC residency visas:

 

• All employees and their dependents (inside or outside the UAE) as well as all individuals inside the UAE with visas expiring after 1 March 2020 will have their entry permit validity extended until 31 December 2020.

• Employers wishing to submit applications for visa renewal can still apply on the DIFC Portal. The visa will be valid from the renewal date up to three years and medical fitness test will not be required. Individuals with expired visas who are eligible for the extension and need to exit the UAE are required to renew the visa before exiting the country.

• Employees with cancelled visas that could not exit the UAE due to the current travel restrictions will be able to have their overstay fines waived at the airport at the time of exit.

• Employees with cancelled visas or visit visa that are in the process of obtaining a new visa with a new employer must complete the change of status within the permitted grace period to avoid fines. Fines will still be applicable for this category.

• Entity establishment cards must be renewed on time. Late fines will still be applicable for delay in renewal of establishment cards. Entities must ensure that the DIFC license is renewed to be able to apply for establishment card renewal. The penalty for each month of delay is AED 100.

• The residency visa of individuals (with valid visa) who completed six months outside the UAE after 1 March 2020 will not be blocked until 31 December 2020.

• Individuals with cancelled visas who are applying for a new visa while they are inside the UAE (given that no overstay fines are issued to them) will be allowed to complete the new visa process without the medical fitness test. However, the visa will be issued for one year only. Visas issued for three years will still require a medical fitness test to be completed.

• The Federal Authority for Identity and Citizenship have started issuing electronic visa stamping and the same will be available under the service request documents list upon completing the visa process.

 

VI. VAT-Related Matters

 

Deadline to submit VAT returns extended to 28 May 2020

 

On 21 April 2020 the Federal Tax Authority issued a directive, on an exceptional basis, for an alternative deadline to file VAT tax returns and pay due taxes on 28 May 2020, for tax periods that ended on 31 March 2020.

 

This exceptional directive pertains only to VAT returns for the tax periods that ended on 31 March 2020, for both monthly and quarterly tax periods, and does not affect any other tax periods where the deadline for filing tax returns and settling of payable taxes does not fall in April 2020. ■

Operating guidelines for businesses following the easing and lifting of COVID-19 lockdowns

 

On 22 April 2020 the Government of Dubai and Dubai Economy issued guidelines for businesses and commercial centres for reopening and resuming activities following the 24-hour Stay Home and National Disinfection Programme initiatives. The guidelines are included in a document entitled ‘Guidelines & Protocols for Reopening’. Similar guidelines have been issued by the Abu Dhabi Department of Economic Development concerning malls in the UAE capital.

 

Reopening is expected to be implemented in a phased approach. Date and time of reopening have not been announced yet. Once announced, businesses and commercial centres can reopen after they have complied with the guidelines and protocols as set out by the government.

 

Activities included in the guidelines document issued by the Dubai Economy include:

 

• Wholesalers and retailers including shopping malls, high street shops, and souqs. It excludes family entertainment, prayer rooms and cinemas.

 

• Transportation and logistics services including the metro, buses and taxis; and excluding water transport, car sharing, trams and limo services.

 

• Construction activities including construction of buildings, civil engineering, and specialised construction activities.

 

• All manufacturing activities.

 

• All offices and office buildings.

 

• Social welfare services including elderly and PWD care homes, rehabilitation and autism centres, women and children shelters, day care centres and juvenile centres.

 

Guidelines include, among many others, reduced opening and visiting hours, operating at reduced capacity, mandatory testing of employees and shoppers upon entry into office buildings and shopping malls, observance of preventive protocols and measures including social distancing, and masks and gloves which must be worn at all times by employees and shoppers.

 

All businesses must be on standby for the official announcements  of  the  date  and time of reopening. ■

COVID-19: Is it an event of force majeure under UAE law?

The continuing COVID-19 pandemic has caused an unprecedented disruption of business worldwide, and many businesses and organisations will be scouring their current contracts to identify avenues of relief. In many cases, the pages containing the force majeure clause will be the first to be turned. Are these clauses enforceable?  What if a contract does not include a force majeure clause? Would COVID-19 qualify as force majeure under UAE law? Answers to these questions will be discussed in this inBrief.

 

What is force majeure?

 

Force majeure originates from French civil law and literally translates as ‘superior force’. Although there is no specific definition of force majeure under UAE law, Federal Law No. 8 of 1985 (the UAE Civil Code) recognises the concept of force majeure and contains several articles of law that are applicable to excuse non-performance of contractual obligations when events of force majeure and other exceptional events occur.

 

Force majeure clauses in contracts

 

Under UAE law, parties are free to agree contractual terms, provided that such terms are not contrary to mandatory provisions of UAE law or public policy. Force majeure clauses are frequently incorporated in commercial contracts (very often as boilerplate clauses) and are interpreted in the same way as any other clause: the plain language will apply and, in the event of any ambiguity, the court will attempt to give effect to the intention of the parties at the time the contract was entered into.

 

Whether or not COVID-19 can qualify as an event of force majeure will depend largely on the language used in the contract. For example, does the contract define epidemics or pandemics as an event of force majeure? A further consideration should be given to whether governmental action is included within the definition of force majeure, as the proximate cause of business disruption is arguably not the pandemic itself, but the measures taken by governments worldwide to curb the spread of the virus.

 

If the contract has a force majeure clause, and defines force majeure to include epidemics, pandemics or governmental actions, the party seeking to rely on the force majeure event to have its non-performance excused will have a stronger footing. If there is a force majeure clause, but the definition does not capture the above events, the party seeking to rely on force majeure as an excuse will be required to demonstrate that the events in question do in fact qualify as force majeure. This task may be rendered more difficult if force majeure is defined as being certain specific events to the exclusion of other events (i.e. a closed list).

 

Parties will need to ensure that force majeure is correctly invoked under the contract. For example, many contracts require parties to give notice of the occurrence of an event of force majeure, usually as soon as the event has occurred.

 

No force majeure clause in contract: statutory provisions of the UAE Civil Code

 

Even where a contract does not contain a force majeure clause, it is still possible to rely on force majeure as an excuse for non-performance pursuant to the UAE Civil Code. Article 273 of the UAE Civil Code provides as follows:

 

Article 273

 

(1) In contracts binding on both parties, if force majeure supervenes which makes the performance of the contract impossible, the corresponding obligation shall cease, and the contract shall be automatically cancelled.

 

(2) In the case of partial impossibility, that part of the contract which is impossible shall be extinguished, and the same shall apply to temporary impossibility in continuing contracts, and in those two cases it shall be permissible for the obligee to cancel the contract provided that the obligor is made aware.

 

The key element for a force majeure claim under Article 273 is impossibility. Although there is no system of binding precedent in the UAE, several cases have held that the requirement of impossibility is to be interpreted literally. Consequently, invoking force majeure on the basis of mere hardship or uneconomic balance between parties is unlikely to succeed. Although Article 273 does not expressly require it, the UAE courts in practice also require force majeure events to have been unforeseeable at the time the contract was entered into.

 

Where a party believes that it will be unable to establish impossibility, it may seek relief under the provisions of Article 249 of the UAE Civil Code, which provides as follows:

 

Article 249

 

If exceptional events of a general nature which could not have been foreseen occur as a result of which the performance of the contractual obligation, even if not impossible, becomes onerous for the obligor so as to threaten him with grave loss, it shall be permissible for the judge, in accordance with the circumstances and after weighing up the interests of each party, to reduce the onerous obligation to a reasonable level if justice so requires, and any agreement to the contrary shall be void.

 

A party seeking relief under Article 249 will be required to establish that an exceptional event of a general nature has occurred, that the event was unforeseen, and as a result of that event, the performance of its obligations is rendered onerous to such an extent as to threaten that party with grave loss if the obligation is performed. Article 249 was used with greater success (compared to Article 273) by parties seeking relief during the financial crisis of 2008/2009.

 

While Articles 273 and 249 are the principal provisions of UAE law which are relevant to the circumstances which the COVD-19 pandemic has given rise to, there are a number of other provisions which are relevant. Article 287 of the UAE Civil Code, for example, makes provision for relying on an event of force majeure as a defence to liability:

 

Article 287

 

If a person proves that the harm arose out of an extraneous cause in which he played no part such as a natural disaster, sudden incident, force majeure, act of a third party, or act of the person suffering harm, he shall not be bound to make it good in the absence of a provision of the law or an agreement to the contrary.

 

An important element of Article 287 is that the defendant played no part in the extraneous event (which in the case of a contract caused the defendant to become incapable of completing the contract). A successful claim under Article 287 can result in the release of contractual obligations.

 

Articles 893 and 894 of the UAE Civil Code are of particular interest in the UAE, as they are applicable with regard to muqawala contracts (i.e. contracts to make a thing or perform a task) and therefore construction disputes:

 

Article 893

 

If any cause arises preventing the performance of the contract or the completion of the performance thereof, either of the contracting parties may require that the contract be cancelled or terminated as the case may be.

 

Article 894

 

If the contractor commences performance and then becomes incapable of completing it for a cause in which he played no part, he shall be entitled to the value of the work he has completed and to the expenses he has incurred in the performance up to the amount of the benefit the employer has derived therefrom.

 

While Article 893 can be invoked by both parties (i.e. the employer and contractor) to cancel or terminate the contract on the basis that performance (or completion of performance) is prevented, Article 894 makes provision for a contractor to claim payment for works performed up to the point it became incapable of performance. For a claim based on Article 894 to be successful, it is necessary to establish that the contractor had no involvement in the reason which resulted in the inability to complete the contract.

 

Conclusion

COVID-19 has brought force majeure clauses and UAE law on force majeure back in to the spotlight. Whether COVID-19 would qualify as a force majeure event will need to be considered carefully in light of the relevant contractual clauses and the facts. While the UAE courts have traditionally been strict in applying the principles related to force majeure, it is yet to be seen whether this approach will continue given today’s circumstances. ■

New measures implemented by the UAE authorities in response to COVID-19 (17 April 2020)

Below is a summary of key new measures that have been implemented by various UAE authorities since 15 April 2020 and the time of this inBrief, 12:00 noon on Saturday, 18 April 2020.

 

Dubai’s National Disinfection Programme extended 

 

On 17 April 2020, Dubai’s Supreme Committee of Crisis and Disaster Management extended the 24-hour National Disinfection Programme for another week. The programme, which began on 5 April 2020, was initially scheduled to end on 18 April 2020.

 

Restrictions on movement of the general public, for essential and emergency trips, will continue to apply during the extension where one member of each household may leave the residence at one time and after obtaining a movement permit prior to any departure from their residence. They must wear masks and gloves at all times and observe the safe distance guidelines.

 

Employees of vital sectors and support sectors, which we listed in our inBrief dated 6 April 2020, are excluded from the movement restrictions.

 

Movement Permits in Dubai 

 

On 16 April 2020 Dubai officials clarified that the movement permit required by the general public for essential and emergency trips will only be granted once in three days. Those trips include:

 

• buying food from food supply outlets and medicine from pharmacies;

 

• attending to doctors’ appointments at hospital, clinics and other healthcare services providers; and

 

• COVID-19 tests.

 

Movement permits in order to withdraw cash from an ATM can be obtained once in five days.

 

Consumer Protection

 

On 15 April 2020 the Commercial Compliance & Consumer Protection (CCCP) in Dubai Economy warned merchants in Dubai against price hikes of staple foods and essentials stating that they will face a penalty if a consumer complaint is found valid.

 

On 1 April 2020 the Dubai Economy launched a ‘Price Monitor’ portal to track daily prices of staple foods and essentials making sure that consumers continue to get their basic needs at fair prices. The ‘Price Monitor’ allows shoppers and businesses on a daily basis to track and compare the prices of 41 basic needs including rice, bread, flour, cooking oil, meat, poultry, fish, milk, eggs, water, salt, sugar fruits and vegetables and hygiene essentials such as sanitisers and face masks.

 

A dedicated portal, Price.ded.ae, has been launched to strengthen communication with consumers and enable them to raise their complaints and queries on price increases faster and easier.

 

Dubai Economy announced it has received 784 complaints relating to prices within two weeks of launching its awareness campaign. The CCCP team verifies the accuracy of complaints related to price hikes by looking at all available evidences and comparing existing bills with previous ones. The team may also resort to field and electronic inspection of the merchant’s price list and other methods.

 

If a consumer complaint is found to be valid, the merchant is asked to go back to the original price or risk a penalty for not co-operating.

 

Cost Relief by the Dubai International Financial Centre (DIFC)

 

To support retailers in response to the situation caused by COVID-19, the DIFC announced on 15 April 2020 a new support package giving its retail business partners based in the DIFC (Gate Avenue, Gate Village and Gate District) a three-month rent-free period, from 1 April 2020 until 30 June 2020, on their base rent.

 

This is in addition to DIFC’s recently introduced business stimulus initiatives which we reported on in our inBrief dated 11 April 2020.

 

Preventive Measures

 

Emirates airline conducts on-site rapid COVID-19 tests for passengers

 

In coordination with the Dubai Health Authority (DHA), Emirates introduced on-site rapid COVID-19 tests for passengers before departing from Dubai. This additional precautionary measure was first introduced on Emirates flight passengers to Tunisia on April 15th.

 

The blood test, which is conducted by DHA staff, produces results within 10 minutes and provides confirmation for Emirates passengers travelling to countries that require COVID-19 test certificates.

 

Emirates is the first airline to conduct on-site rapid COVID-19 tests for passengers.

 

In addition to the rapid COVID-19 test for passengers, Emirates has adapted its check-in and boarding formalities with social distancing guidelines, installed protective barriers at check-in desks, and mandated all airport employees to wear gloves and masks. Passengers are also required to wear their own masks when at the airport and on board the aircraft, and follow social distancing guidelines. All Emirates aircrafts will go through enhanced cleaning and disinfection processes in Dubai, after each journey.

 

New procedures announced by Sharjah Economic Development Department (SEDD)

 

Through a circular issued on 15 April 2020, the SEDD announced a number of new precautionary and preventive measures for workers in the Emirate of Sharjah aimed at preserving public health and protecting workers’ health and safety. These measures include:

 

• prohibiting the transfer of labour outside of Sharjah and restricting their movement within the cities of the Emirate;

 

• preventing the entry of non-resident workers into Sharjah;

 

• restricting the number of workers being transported to half the vehicle’s capacity; and

 

• mandating that workers wear masks and keep a safe distance of two metres when getting on and off transportation vehicles.

 

Workers at cleaning, food and private security establishments are excluded from the above measures. ■

New cost relief measures implemented by UAE authorities in response to COVID-19

The UAE authorities have taken a number of measures to reduce the costs that businesses are facing during the current crisis. We now report on some of the measures that have been introduced, current as of 12:00 noon on Thursday, 16 April 2020.

 

Abu Dhabi Department of Economic Development (ADDED) Administrative Resolution No. 92 of 2020

 

On 14 April 2020, the ADDED issued Administrative Resolution No. 92 of 2020 on the Reimbursement of 20 per cent of the Rent Value for the Restaurant, Tourism and Recreational Sectors in Abu Dhabi (Resolution) with immediate effect.

 

The Resolution applies to rents of the following establishments anywhere in Abu Dhabi:

 

• restaurants, coffee shops, cafeterias, and outlets selling prepared meals;

 

• all entertainment establishments;

 

• all tourism and recreational establishments; and

 

• all desert resorts and tourist parks.

 

The Resolution applies to rents collected from the period of 1 October 2019 until 31 March 2020 as well as rents from both existing and new contracts, regardless of the date of conclusion of the contract, that will be collected from 1 April 2020 until 30 September 2020.

 

In the event rents consist of a fixed rental portion plus a percentage of revenue portion, the Resolution will apply to the fixed portion only.

 

If a particular landlord has filed suit or applied for a provisional remedy against a tenant and wishes to withhold the 20 per cent refund, then it must make a request to the ADDED supported by a judgment in its favour attaching such refund.

 

Commercial Vehicle Registration in Abu Dhabi

 

The authorities in Abu Dhabi have also announced that owners of commercial vehicles may renew vehicle registration free of charge until the end of 2020. This measure will be applied retroactively to any renewals completed after 16 March 2020.

 

The Federal Tax Authority’s (FTA) Extension of the Tax Period

 

The FTA has announced the extension of Excise Tax returns for the month of March. Excise Tax filings for the months of March and April are now due no later than Sunday, 17 May 2020. Excise Tax is levied on specific categories of goods, such as tobacco products and sweetened beverages.

 

Dubai Multi Commodity Center (DMCC) Business Support Package

 

The DMCC announced a comprehensive package which includes discounts and waivers for DMCC’s existing member companies, as well as new companies looking to set up. Measures in the package, which will apply from 1 April 2020 until 30 June 2020 (unless stated otherwise) and complement the various economic initiatives announced by the UAE Government, include the following range of discounts and waivers:

 

For existing DMCC member companies

 

• 100 per cent waiver for late licence renewal penalties

 

• 100 per cent waiver for all flexi desk and DMCC business centre penalties until the end of 2020

 

• 100 per cent waiver of the office sharing permit fee

 

• 100 per cent waiver of the company reinstatement fees

 

• 30 per cent discount on licence renewal

 

• Waiver of outdoor area rents for JLT retailers with existing contracts, where DMCC is the building owner/landlord

 

• Waiver of rent for two months for commercial establishments impacted by the latest Dubai Economy directive requiring a temporary closure, where DMCC is the building owner/landlord

 

• A three-month suspension of rent for flexi desk and DMCC business centre tenants renewals or monthly/quarterly instalment with no discount

 

For new registrations, and companies already in the process of registering in DMCC

 

• 80 per cent reduction on the total company set up fee if shareholders are residents of JLT

 

• Up to 50 per cent reduction on the total company set up fee, along with a flexi desk for one year

 

• Flexible payment options for new DMCC business centre tenants

 

• Complete digital process for business set up from the comfort of home

 

Jebel Ali Free Zone’s Payment Flexibility Plan (JAFZA)

 

JAFZA has created a payment flexibility plan for DP World, UAE Region’s Parks and Zones that include JAFZA, National Industries Park and Dubai Auto Zone to help businesses sustain, and maintain their cash flow as they navigate through this challenging season of COVID-19.

 

The plan enables all businesses operating in JAFZA’s parks and zones to defer their rental payments for two months, and pay with easier instalments effective from 1 April 2020. To avail this plan, businesses need to apply online seven days prior to the cheque due date.

 

Rescheduling Rental Payments in Sharjah

 

Through an announcement on 5 April 2020, Sharjah Chamber of Commerce and Industry called on property owners in the Emirate of Sharjah to adopt the same approach as that of the Sharjah government in delaying rent payments of those affected by COVID-19, especially in the case of commercial properties. This was in addition to a recently adopted stimulus package by the Sharjah government to support the interests of the government and private institutions.

New measures implemented by the UAE authorities in response to COVID-19 (13 April 2020)

Below is a summary of key new measures and initiatives that have been implemented by various UAE authorities since 9 April 2020 and the time of this inBrief, 6:00 p.m. on Monday, 13 April 2020.

 

Commercial Activity

On 13 April 2020 the Dubai Department of Economic Development issued a circular on the re-opening of some commercial activities and emphasised that these activities must continue to comply with preventive guidelines, including operating only between the hours of 8:00 a.m. and 8:00 p.m., adhering to sanitisation and social distancing measures, and obtaining movement permits. The commercial activities stated in this circular include meat trading, fruit and vegetable trading, fish trading, mills and nut trading, coffee and tea trading, and chocolate and sweets trading.

 

Free Zones

 

Jebel Ali Free Zone (JAFZA) reinforces UAE Cabinet Resolution No. 24 of 2020

 

On 9 April 2020 JAFZA announced various measures reinforcing UAE Cabinet Resolution 24 of 2020. The measures include:

 

• All national and expatriate employees must immediately inform the Ministry of Health and Prevention (MOHAP), Ministry of Interior or Dubai Health Authority (DHA) about any suspected cases of COVID-19 infection that they come across or become aware of and allow the authorities to investigate and examine the suspected patient and take necessary measures to ensure the wellbeing of the community.

 

• Any person is prohibited from publishing, republishing or circulating health related information or guidelines that are not officially announced and approved by MOHAP or DHA, or share information that violates what has been officially announced through any form of media.

 

• Any person caught sharing and distributing false, misleading or unofficial information related to COVID-19 faces a fine of AED 20,000 (doubled for repeat offences) pursuant to Article 6 of the UAE Cabinet’s Resolution 24 of 2020.

 

• All suspected cases of COVID-19 must be reported to DP World’s Command & Control Centre.

 

Dubai Financial Services Authority’s (DFSA) 2020 Reporting Requirements

 

On 9 April 2020 the DFSA sent a letter to all Senior Executive Officers of authorised firms detailing various reporting requirements which may be eligible for extension. While the DFSA maintains an expectation that authorised firms exercise reasonable efforts to meet the existing deadlines set out in GEN 8.2.6, requests may be submitted on a case-by-case basis for extensions of this deadline. Authorised firms should access the DFSA e-Portal to submit the relevant forms for DFSA’s consideration. Requests can be made by authorised firms with financial year-ends from 31 December 2019 to 31 March 2020 (both days inclusive).

 

The following reports may be considered for extension:

 

Report Name  Rule reference  Current Requirements 
Annual Financial Statement’s Auditor’s Report GEN 8.6.1 (a)

GEN 8.6.2

 Within four months of the financial year end.
Annual Regulatory Return Auditor’s Report GEN 8.6.2 (b)

GEN 8.6.2 / AUD App1

 Within four months of the financial year end.
Annual Client Money Auditor’s Report GEN 8.6.1 (c)

GEN 8.6.2 /AUD App2

 Within four months of the financial year end.
Annual Insurance Monies Auditor’s Report GEN 8.6.1 (d)

GEN 8.6.2 /AUD App3

 Within four months of the financial year end.
Annual Safe Custody Auditor’s Report GEN 8.6.1. (e)

GEN 8.6.2/AUD App4

 Within four months of the financial year end.
Annual Controllers Report GEN 11. 8. 12 Within four months of the financial year end.
Annual IRAP Report PIB 10.3.2 (1), (2) and (3), A10.1 of APP 10 Within four months of the financial year end.
Annual ICAAP Report PIB 10.4.2 (1), (2) and (3) and A10.2 of APP 10 Within four months of the financial year end.
Actuarial report on general insurance business PIN 6.5.5 Within four months of the Insurer’s reporting date.
Actuarial investigation report on long-term insurance business PIN 6.5.5 Four months from the Reference Date of actuarial investigation.
Annual Shari’a Review Report IFR 3.6 Within 14 days after receipt.
Annual Funds Return CIR 9.4.2(1)(a) Within 14 months after the end of each annual accounting period.

 

Economic Stimulus

 

Ajman Crown Prince announces new package of economic incentives

 

On 8 April 2020 the Ajman Crown Prince announced a second package of economic incentives. The package includes initiatives aimed at supporting the real estate sector including eliminating administrative fines for every violation of real estate registration renewals and postponement of payment for fines and penalties until the end of the current year for all businesses in the Emirate.

 

It also includes initiatives aimed at supporting the Emirate’s foreign trade and customs as well as tourism sectors including the possibility of paying customs duties with easy payments within 90 days, extending the free period for storing containers from 10 to 20 days, reducing container insurance fees by 50 per cent for each container until 30 June 2020, the exemption for hotel and tourism establishments from registration fees until the end of the current year, eliminating hotel cancellations penalties, and postponing payment of hotel and tourism fines due at the end of the current year.■

Electronic signatures in the UAE: what you need to know

With the UAE in virtual lockdown and the majority of businesses required to operate remotely, an increasing number of documents are required to be signed electronically. Although electronic signatures were not commonly used prior to the onset of COVID-19 in the UAE, the legal framework for the use of electronic signatures has been in place for quite some time.

 

The UAE Federal Law

 

The principal piece of legislation which governs the use of electronic signatures in the UAE is Federal Law No 1 of 2006, also known as the Federal E-Commerce Law (E-Commerce Law). The E-Commerce Law provides that, subject to certain exceptions which we discuss below, if the law requires any statement, document, record, transaction or evidence to be written, then an electronic document or record shall satisfy any such requirement subject to certain requirements prescribed by the E-Commerce Law (Article 6).

 

Article 18 of the E-Commerce Law provides that a person is entitled to rely on an electronic signature, provided such reliance is reasonable. In order to determine whether reliance is reasonable in any given context, the following circumstances need to be considered:

 

(a) the nature of the underlying transaction that the electronic signature was intended to support;

 

(b) the value or importance of the underlying transaction, if this is known to the party relying on the electronic signature;

 

(c) whether the party relying on the electronic signature had taken appropriate steps to determine the reliability of the electronic signature;

 

(d) whether the party relying on the electronic signature took appropriate steps to ascertain whether the electronic signature was supported or was reasonably expected to have been supported by an electronic attestation certificate;

 

(e) whether the party relying on the electronic signature knew or ought to have known that the electronic signature has been compromised or revoked;

 

(f) any agreement or course of dealing between the party that provided the electronic signature, or any trade usage or practice which may be applicable; and

 

(g)  any other relevant factor.

 

The documents which may not be signed electronically are as follows:

 

(a) Transactions and issues relating to personal law such as marriage, divorce and wills;

 

(b) Deeds of title to immoveable property;

 

(c) Negotiable instruments;

 

(d) Transactions involving the sale, purchase, lease (for a term of more than 10 years) and other disposition of immoveable property and the registration of other rights relating to immoveable property;

 

(e) Any document legally required to be attested before a notary public; and

 

(f) Any other documents or transactions exempted by provision of law.

 

Article 11 of the E-Commerce Law provides that an offer or the acceptance of an offer may be expressed, in whole or in part, by electronic communication, and that a contract is not invalid or unenforceable solely by reason that electronic communication was used in its formation.

 

The E-Commerce Law makes provisions for electronic signatures created using a “signature tool” which is defined by the Federal Law as a “system or electronic information designed independently or in participation with other electronic systems and information to set down an electronic signature…”. It also recognizes the concept of a “secure signature” or a “protected signature” (Article 17) which is an electronic signature for which:

 

(a) the electronic signature is attributable to the person that provided it;

 

(b) it is possible to verify the identity of the person providing the signature;

 

(c) the person providing the signature had control of the tool through which the signature was provided; and

 

(d) the electronic signature is linked through secure electronic means to an electronic message.

 

In order to increase the reliability of another party’s electronic signature, it is prudent to  ensure that the other party’s signature is witnessed by two witnesses who also sign and provide their contact information, under the testamonium “The above signatory is known to me and I confirm that the above signature is genuine”.

 

The E-Commerce Law regulates “protected signatures” and service providers that provide secure e-signature verification services.  The use of such services and service providers gives a greater level of security, but is not essential for an electronic document or e-signature to be valid in law.  If you are interested in pursuing the secure signature route, there are currently two validly licensed providers of such services in the UAE (Dark Matter and Adobe).

 

The UAE Civil Procedure Law (as amended) recognises the authenticity of e-signatures, and specifically provides that an e-signature has the same validity as physical signatures. Although there is no system of binding precedent in the UAE, a number of judgments rendered by the Dubai Court of Cassation have recognized the validity of electronic signatures.

 

Dubai Law and Dubai International Financial Centre (DIFC) Law

 

The position set out above relates to UAE Federal Law. Where Dubai Law is concerned, the provisions of the Dubai Law No.2 of 2002 (Dubai Electronic Transactions Law) applies. The provisions of this law are based on the E-Commerce Law and reflect the E-Commerce Law on matters such as reasonableness criteria and protected signatures.

 

The position with respect to the DIFC is set out in the DIFC Law No. 2 of 2016 (Electronic Transactions Law). Article 21 of the Electronic Transactions Law recognises the use of e-signatures where a document is required to be signed. Article 22 of the law provides that an e-signature is deemed to identify the relevant person and to indicate that person’s intention in respect of the Information contained in the Electronic Record provided that the type of e-signature used is as reliable as appropriate for the purpose for which the document or record was generated or communicated, in the light of all the circumstances, including any relevant agreement.

 

As with the Federal E-Commerce Law, the Electronic Transactions Law provides that e-signatures cannot be used for certain types of documents (Article 8 read with Schedule 2):

 

(a) The creation, performance or enforcement of a power of attorney.

 

(b) The creation, performance or enforcement of a declaration of trust (with the exception of implied, constructive and resulting trusts) and any provision in the Trust Law 2005 (DIFC Law No. 11 of 2005, as amended) requiring information to be written or in writing.

 

(c) The creation and execution of wills, codicils or testamentary trusts.

 

(d) The creation, execution and use of affidavits or affirmations as evidence in court proceedings pursuant to rule 29 of the Rules of the DIFC Courts.

 

(e) Transactions involving the sale, purchase, lease (for a term of more than 10 years) and other disposition of immovable property and the registration of other rights relating to immovable property.

 

The Board of Directors of the DIFC has the power to issue regulations extending, waiving or modifying the list of matters for which e-signatures cannot be used. It appears that this was done recently in relation to the creation of DIFC wills, which according to a recent press release of the DIFC Wills Service Centre can now be created with the use of e-signatures.

 

Importantly, the Electronic Transactions Law that parties may agree to exclude the application of e-signatures or impose additional requirements. E-signatures are admissible as evidence where evidence of a signature is required in proceedings (Article 24).

 

From a practical perspective, it is important that commercial parties:

 

(a) Revisit their contracts to ensure there is no impediment to using electronic signatures (particularly where DIFC law is applicable);

 

(b) Agree authentication procedures with their counterparties to identify/verify signatures; and

 

(c) Take steps to upgrade IT security and limit the risk of becoming victims of fraud, hacking and other electronic crimes. ■

Measures implemented by the Dubai International Financial Centre (DIFC) in response to COVID-19

Below is a summary of key relief and operational measures implemented by the DIFC since 1 April 2020 and the time of this inBrief, 6:00 p.m. on Saturday, 11 April 2020.

 

Dubai Financial Services Authority (DFSA) announces relief measures

 

On Tuesday, 7 April 2020, the DFSA announced a number of relief measures to support their clients during this time of stress and uncertainty. These measures are aimed at both new firms setting up in the DIFC as well as existing authorised firms.

 

Regulatory relief measures for new firms setting up in the DIFC include:

 

• More time to complete the application and authorisation processes

 

• A 50 per cent reduction in application fees for the remainder of 2020 and flexibility in requirements for permanent premises

 

• A waiver of registration fees for domestic funds for the remainder of 2020

 

Regulatory relief measures for existing authorised firms include:

 

• An extension of time for filing a number of returns and reports

 

• Additional time, where reasonable, for submitting annual accounts and financial statement auditors report (with the exception of reporting entities)

 

• Flexibility in meeting authorised individual obligations

 

• A waiver of fees for applications relating to authorised individuals

 

• Temporary relief from capital requirements

 

• A waiver of fees for applications for waivers and modifications and all automated late return fees for the remainder of 2020

 

• A waiver of the listing fees for new SME issuers in the DIFC for the remainder of 2020

 

In addition, the DFSA has agreed to extend policy consultation periods as well as the time periods within which entities must meet new requirements.

 

Click here to access a copy of this announcement on the DFSA website.

 

DIFC Courts

 

While DIFC Courts’ (the Courts) employees are operating on a work-from-home remote basis, the Courts is fully operational with no interruption to service. Remote access is available to all services through the Courts’ fully integrated digital eCourt platforms including e-Registry, e-Bundling and e-Hearings.

 

Practitioners and Courts’ users are encouraged to email the e-Registry for all enquiries. They are also encouraged to take advantage of the e-Bundling platform which is available through the e-Registry. Hearings will be conducted by judges remotely via teleconference or video conference, as appropriate.

 

Doors of the Courts and Registry offices will remain physically closed until 26 April 2020 (or, pending further notice).

 

DIFC Wills Service Centre

 

Through a press release on 5 April 2020, the DIFC Courts confirmed that it has developed a new system for the registration of Wills via video conference. The new system allows the testator and two witnesses to join on the video conference call from different locations. The system also allows an approved Will to be directly uploaded on the system and to be signed electronically.

 

Upon booking the appointment, the testator will have to upload the following documents:

 

1. Approved draft Will

 

2. Clear copy of the testators’ passport (and Emirates ID if applicable)

 

3. Clear copy of the witnesses’ ID’s (passport or any other form of ID; front and back if using Emirates ID)

 

4. Signed and dated Guardianship Witness Statements (if applicable)

 

The Will to be registered should be sent at least two working days before the appointment. All information of the Will should be complete as they cannot be added once the Will has been uploaded except the signature sections for the testator and witnesses. The Will will be electronically signed during the video conference.

 

All Will registrations can be booked on the appointment portal.

 

DIFC Business Stimulus Initiative

 

On 1 April 2020 the DIFC has announced a new Business Stimulus Initiative (Initiative) in line with Dubai Government’s economic stimulus programme. The Initiative took effect on 1 April 2020 for a period of three month until 30 June 2020. Relief measures contained in the Initiative include:

 

• All lease payments are deferred for three months with a six-month payment plan.

 

• Annual licensing fees for new entities that submit the Application for Incorporation / Registration during the three-month period from 1 April 2020 until 30 June 2020 will be waived.

 

• A 10 per cent discount of the total license renewal fee for all DIFC registered entities that are due for renewal during the three-month period from 1 April 2020 to 30 June 2020. The discount does not include data protection fees and DFSA fees (if applicable).

 

• A reduction of freehold transfer fee from 5 per cent to 4 per cent, for all properties within the DIFC jurisdiction, for sale or purchase of property (or any part thereof) that takes place within the period from 1 April 2020 to 30 June 2020 where the transfer is registered with the DIFC Registrar of Properties within 30 days, at the latest, after the expiry of the said three-month period.

 

More on the DIFC Business Stimulus Initiative and a list of FAQs can be accessed here.

New measures implemented by the UAE authorities in response to COVID-19 (7 April 2020)

Below is a summary of key new measures and initiatives that have been implemented and announced by various UAE authorities since 6 April 2020 and the time of this inBrief, 6:00 p.m. on Wednesday, 8 April 2020.

 

Commercial and Government Activities

 

Dubai extends closure of commercial activities

 

On Tuesday, 7 April 2020, the Department of Economic Development (DED) announced in a statement on Twitter that Dubai has extended the closure of commercial activities until 18 April 2020 in line with the National Disinfection Programme and Stay Home initiatives to curb the spread of the Coronavirus (COVID-19). During this period, vital and exempted support sectors will continue to operate as described in our previous inBriefs.

 

The DED announces the extension of Circular on closure of Government Transactions Centres

 

The DED announced today in a statement on Twitter that the Circular issued on 25 March 2020 on the closure of Government Transactions Centres is extended until 18 April 2020 in line with the National Disinfection Programme and Stay Home initiatives. During this time, government services will continue to be accessible through Smart channels.

 

Free Zones

 

Dubai Financial Services Authority (DFSA) announces relief measures

 

On Tuesday, 7 April 2020, the DFSA announced a number of relief measures to support their clients during this time of stress and uncertainty. These measures are aimed at both new firms setting up in the DIFC as well as existing authorised firms.

 

Regulatory relief measures for new firms setting up in the DIFC include:

 

• More time to complete the application and authorisation processes

 

• A 50 per cent reduction in application fees for the remainder of 2020 and flexibility in requirements for permanent premises

 

• A waiver of registration fees for domestic funds for the remainder of 2020

 

Regulatory relief measures for existing authorised firms include:

 

• An extension of time for filing a number of returns and reports

 

• Additional time, where reasonable, for submitting annual accounts and financial statement auditors report (with the exception of reporting entities)

 

• Flexibility in meeting authorised individual obligations

 

• A waiver of fees for applications relating to authorised individuals

 

• Temporary relief from capital requirements

 

 

• A waiver of fees for applications for waivers and modifications and all automated late return fees for the remainder of 2020

 

 

• A waiver of the listing fees for new SME issuers in the DIFC for the remainder of 2020

 

Click here to access a copy of this announcement on the DFSA website.

 

Health and Safety

 

Guidelines for construction workers and transportation permit

 

On Tuesday, 7 April 2020, the Dubai Municipality has issued a guidance document covering the precautionary measures to be followed in residences, buses and construction sites, as well as a document including a permit to transport construction workers in Dubai. The guidelines which were drafted by the Health & Safety Department and Building Control Department and include such measures as increased frequency of disinfection and cleaning, limited gatherings, and social and physical distancing of two  metres, have been structured to assist the owners or operators of labour accommodations to take preventive steps and counter the spread of the COVID-19 outbreak. ■