Dubai Law Firm Explains Business Precautions, Crypto Currencies, and Intellectual Property Rights

Desert Icons Vol. 10 VikRohit Kochhar (Chairman, Kochhar & Co Inc.). From a desert city to a global hub. We approach the key people driving Dubai's development and explore the secrets of their innovation and success.

What is Dubai's Legal System That is Different from Other Countries?

--In which areas do disputes commonly arise? Can you share some specific examples? Please give us some specific examples.
In Dubai, disputes are especially prevalent in the construction, real estate, and employment sectors. For instance, a construction company recently faced sudden contract termination, leading to claims of damages amounting to AED 650 million. In real estate, disputes emanating from delays in off-plan projects, and contractual discrepancies with buyers are typical examples. In one project, delays of over two years led to court disputes between the developer and buyers seeking to terminate their contracts. Other common disputes involve rent escalations and disagreements over maintenance costs. In the employment sector, disputes often revolve around dismissals and end-of-service benefits. Recently, an employee successfully demonstrated unjust termination in court, eventually leading to a settlement.

--ーHow does Dubai’s legal system differ from others?
Dubai’s legal framework is a complex mixof Civil law, Sharia law, and Common law which is followed in two free zones namely DIFC (Dubai International Financial Centre) and Abu Dhabi Global Market. If a mainland commercial contract does not explicitly provide for resolution of disputes through DIFC courts, such disputes would be adjudicated by the local UAE courts and Civil law would be applicable. Arabic is the sole official language in the UAE courts, and all documents and pleadings are required to be in Arabic. While Dubai’s courts are notably time efficient, for commercial transactions being entered into by foreign companies, it is strongly recommended to specify DIFC courts and DIAC arbitration for dispute resolution. For instance, a Japanese company recently used a common law-based contract to swiftly resolve a commercial dispute.

--ーWhat is your relationship with Japanese companies?
We have built a long-standing relationship with Japanese corporations, starting in 1994 with Panasonic during the early days of our firm. This working collaboration began in India and later expanded to Dubai. The firm’s other major Japanese clients include Itochu Corporation, Honda Motor, Nissan Motor, Softbank, Ebara Corporation andMeidensha Corporation.

--What should Japanese companies pay attention to in Dubai?
UAE's strict anti-money laundering (AML) regulations necessitate thorough KYC (Know Your Customer) procedures for transactions being entered into with counterparties. For example, if a counterparty's fraudulent actions become the subject of an investigation, related contracting companies might also be affected unless due processes were followed by them.

Necessity of Trademark and Copyright Registration in Dubai and Practical Solutions

--Labor disputes over changing conditions and dismissals are on the rise. What is your opinion?
Clear and comprehensive employment contracts are essential. For instance, in the past, a Japanese company faced legal challenges because holiday allowances were not explicitly stated in contracts, leading to a court dispute. To prevent such issues, contracts should be reviewed by specialized legal counsel to ensure the same are properly drawn up and protect the interests of the employer companies while also including provisions which are fair and reasonable for the employees. Strengthening internal communication and organizing company events that foster bonhomie can build positive relationships and trust with employees. Establishing transparent internal grievance mechanisms can also prevent differences or disputes from escalating to court.

--What legal issues should the cryptocurrency industry be aware of?
Fraudulent transactions and breaches of smart contracts are common concerns. Engaging with trustworthy parties is critical. For instance, a recent case involved the purchase of digital assets from an unauthorized seller, which turned out to be a fraudulent investigation.

--What advice can you offer about intellectual property protection in Dubai?
Intellectual property is a critical business asset. Trademarks and copyrights should be registered in the UAE, and any infringement should be addressed promptly through appropriate legal channels. For example, a Japanese company which discovered that its products were being counterfeited was able to achieve a swift resolution by issuing a cease-and-desist legal notice. It is recommended that contracts must include clear intellectual property protection clauses, and training sessions should be held for employees on how critical the IP assets are to the company's business and what dos and don't should be observed by them to ensure full protection of the employer's IP.