The UAE is taking a leading role in the broader FinTech movement, hosting approximately 30% of all FinTech startup companies from the MENA region. It has established a first of its kind start-up “accelerator programme” called the ‘Fintech Hive’ at DIFC. In addition, Abu Dhabi has launched the RegLab, also known a regulatory sandbox. In October 2017, the UAE Exchange, the largest money transfer company in the region, allocated $250 million for Fintech acquisitions. Other countries in the region are now adopting FinTech as part of their future growth strategies with the number of FinTech companies due to double by 2020.

The Islamic FinTech space presents an exciting horizon for the MENA region. The Islamic finance industry has also grown significantly over the past decade, at approximately 10% per year. Sharia-compliant financial assets are projected to be valued at over $3 trillion by the end of 2018, covering bank and non-bank financial institutions, capital markets, money markets and insurance (“Takaful”). It is estimated that the UAE is already home to 12 out of approximately 100 Islamic FinTech companies.

In fact, such is the penchant and excitement for the broader FinTech scene that Goldman Sachs estimates that the startups driving the industry could be worth revenues around $5 trillion. These include ventures covering peer-to-peer lending, crowdfunding, payments, wealth management, and the use of underlying blockchain technologies. Many of the players in these spaces are growing, and fast. The MENA region is in a unique position to leverage its advantage in the Islamic and broader burgeoning FinTech space.

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So, what is Business Development? In short, it is getting and keeping clients by building relationships.

Traditionally, Business Development was left to Partners, who were expected to spend a certain number of hours per month contributing to the growth of the firm. However, times have changed and legal consultants are now also expected to generate business in order to retain status or gain promotion, making the ability to acquire clients and build relationships as crucial as strong legal skills. Without a strong foundation of knowledge and a pool of techniques to handle sales opportunities, even legal consultants who are the most dedicated to business development can fail.

In an industry where the competition is significant and substantial, not to mention the legal advice readily available on the internet, it is even more of a struggle to maintain clients. In addition, clients are becoming more promiscuous and are using the competitive nature of the market to their advantage.

In summary, possessing excellent Business Development skills is fundamental for any legal consultant wishing to be successful in today’s competitive legal market. Firms that invest time in BD and have a well-developed strategy generally have greater long-term commercial success.

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Creative Word have designed a new course to introduce FinTech and provide insight into its disruption, innovation and the opportunities it presents.

This course introduces some of the basic concepts of FinTech.  We have all heard the term being used, but what does it really mean?

We cover key definitions related to the rapidly growing industry and dive into the core segments that make up the FinTech landscape.  Each segment is presented with appropriate case studies to highlight how through the use of alternative technology such firms are challenging the dominance of the traditional firm.

We have also included a summary of current and potential further touchpoint within the legal sector so legal practitioners can help relate to the impact of disruptive technologies to their industry.

The areas covered:

• What Is FinTech
• Emergence of FinTech
• MENA FinTech Environment
• Case example
• Lending Technology
• Payment/Billing Technology
• Wealth Management/Money Transfer Technology
• Blockchain & Bitcoin
• Capital Markets Technology
• Crowdfunding
• InsurTech
• Legal Touchpoints

For further information and to book click here.

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“Go to work mum” and two arbitration centers were set up…

It is quite common for women to use references to children and family when talking business unlike men,and that is due to the very clear differences between the forms of language typically used by women and men.Therefore,my choice of my child’s words,isprobably a reflection of my motherly feelings towards the projects I ventured with passionately aimed at realizingthe vision of Dubai in setting itself as an Arbitration hub with not one but two arbitration centers.

My involvement with ADR was not planned, subsequently the hostility and apprehensiveness of many was quite unsettling, but the pride I felt until recently, watching the Dubai International Arbitration Center and the DIFC-LCIA Centre, growing into the top ADR institutions in the region, successfully setting the scene for arbitration at its best albeit the varied and contrasting opinions and legislative reach, was to say the least beyond words.

The DCCI

Joining the DCCI as a legal researcher in 2002 was a decision I made while on my way back home from my son Majid’s nursery on September 4^th, after being a house wife and mother for more than 5 years. When he said softly“ go to work mum” while waving goodbye, I realized that it was time for me to look for something I love to do besides looking after my beautiful family.

The degrees I held in Law, were effectively my pass to getting the job I sought with the legal department together with my fluency in Arabic, English and Frenchin addition toa working experience, although considerably short,with two of the top international law firms in Dubai. The HR Director had a brief look at my CV and hired me on the spot.

The DCCI legal services were focused on mediation and the legal team occupied the left side of the 9^th floor where I handled complaints from and against the business community.Acting as a mediator was interesting until I was introduced to Arbitration officially by the Director General of the DCCI when asked me to start working on arbitration cases filedwith the “Centre for Commercial Conciliation and Arbitration” created in 1994. The Committee running the Center, was formed of 5 members of DCCI board. The chairman of the committee was Mr. KhalifaJuma AL Nabooda who was a keen supporter of Arbitration as an Alternative Dispute Resolution mechanism and was keen to take the practice to the next level where the Dubai International Arbitration Centre was to be created as an autonomous, permanent, non-profit institutionto be located on the 14th floor of the magnificent glass quarters of the Dubai Chamber of Commerce & Industry (DCCI) overlooking the creek, aimed at providing the regional and international business communities with an exclusive service of conciliation & arbitration at affordable rates.

The work I got thrown in ultimately was overwhelming,for working with the Committee in case management and researching the law when ADR was not much developed provedquite challenging. The number of contracts with the DCCI referred to in terms of dispute resolution was considerably large for our resources which kept us quite busy.

The DIAC

A year later I was asked to move to the 14^th floor when the offices were ready and I started working with the DCCI advisor on the set up of the DIAC as the Centre Manager. As a woman I suppose I was totally disregarded when the DCCI compiledits list for the DIAC candidates for the post of Director, yet I was asked to compile a list of Arbitrators, draft the rules and hire staff. Meetings with the big names of arbitration in the Arab world and elsewhere were scheduled at the center and events were held to announce the opening of the DIAC. The highlight of my work with the DCCI was the DIAC initial set upand the letter addressed to his Highness Sheikh Zayed Bin Sultan AlNahyan May he rest in peace, urging the UAE legislator to join the NY Convention. The letter wasdrafted by the DCCI advisor Mr. Nizar Saradastand myself.Prior to the UAE’s accession to the New York Convention in 1996, the enforcement of foreign awards before the UAE courts was, save for the application of relevant bi-lateral or other multi-lateral conventions, subject to the application of Article 235 of Federal Law No.11 of 1992 (the UAE Civil Procedures Code), which governs the enforcement of foreign judgments in the UAE.

The legislation applicable to arbitration was and continues to be the 12 provisions of the UAE Federal Law No. 11 of 1992, as amended (Civil Procedure Code). The applicable provisions of the Civil Procedure Code are not based on the UNCITRAL Model Law. Work on the first draft of the Arbitration law also started then and has been work in progress ever since.

The distrust of arbitration wascommon among the majority of UAE legal practitioners and UAE courts, and more specifically the idea of ceding jurisdiction to foreign arbitrators., hence convincing the UAE government with our argument for the NY convention signing was a great achievement and setting up the DIAC was a brave initiative.

As I was leaving the DCCI the DIAC in 2005 had a director, a board of trustees was beingset up and a draft of the Rules was in place. Replacing the former Conciliation and Commercial Arbitration Centre of Dubai Chamber of Commerce and Industry, the Dubai International Arbitration Centre (“DIAC”) was inaugurated in May 2003. Dr. HusamAlTalhuni was hired as a director. It is currently the busiest arbitration Centre in the Gulf region. The DIAC issued its own Arbitration Rules (“DIAC Rules”), applicable to all DIAC arbitrations commenced on 7 May 2007, consequently replacing the DCCI Rules of Commercial Conciliation and Arbitration of 1994 (“DCCI Rules”) which were drafted mainly with domestic arbitration in mind. The DIAC mission to set up as an autonomous entity was quite controversial, when the DCCI was not an autonomous organization itself. The non-profit institution issue was also anothermatter of controversyfor a while. The DIAC as to this moment, has been without a director for almost two years.

When the Dubai International Arbitration Centre (“DIAC“) was conceived in 2003 the case load was 34 cases and as I remember in 2005 it reached 60 while over 200 cases registered in 2009. In 2011 the case load was at its peak with 440 cases during the property crisis of Dubai coming down to 310 cases in 2013.

When the floor was opened for questions at the Arbitral Women event in Dubai last year, I asked the Chairman of the DIAC how many women they had on their board of trustees he answered none. The case managers are women and the DIAC has just posted on its website a Job Vacancy for the Director, which has been vacant for two years following the resignation of NassibZiade.

The DIFC

As I got pregnant with my third child I left the DCCI and in January 2006 I had my youngest child Shahab, and being the mother I am, I planned to stay home until he went to nursery as I did with his older siblings. But who said we could ever know what is coming??

In June 2006 I was asked by the DIFC to join the Corporate Governance Centre (HAWKAMAH) and started working immediately on the ESCA Corporate Governance Code. My law drafting skills, acquired at the DCCI were very much on demand at the DIFC since the authority was very busy drafting the DIFC laws and relevant rules. Months later the HR director of the authority asked me to join the DIFC Arbitration Centre where negotiations with the LCIA were on going. My office as an Arbitration Centre Manager was at the DIFC Courts building and with the temporarily appointed Director I was asked to travel to London to have the DIFC -LCIA agreement signed.

The DIFC- LCIA

From its inception, the Dubai International Financial Centre (the “DIFC”) was intent upon establishing a beacon for regional dispute resolution.  In addition to the now well-known DIFC Courts, an arbitration center was to be created to provide alternative dispute resolution services (i.e. Arbitration and Mediation, together “ADR”) for local and foreign business in the region.  In 2008 the DIFC negotiated an agreement with the LCIA pursuant to which arbitrations under DIFC-LCIA Rules would be managed and administered with LCIA’s assistancewas signed. The DIFC-LCIA Arbitration Centre (the “DIFC-LCIA” or the “Centre”) was established in 2008 and was described at that time by the Chief Justice Sir Anthony Evans as “essentially a joint venture between the DIFC and the London Court of International Arbitration (“LCIA”), one of the leading players in the arbitration world”.

The work we undertook to set up the Centre included drafting the Arbitration Law of DIFC which involved a panel of 5 lawyers and arbitration practitioners working on its final draft, together with two external firms.  The final draft waseventually posted for consultation then issued not long after as Law No. 1 of 2008. The adaptation of the Model Law made the DIFC Arbitration Law practical and comprehensible to all arbitration practitioners.

The DIFC LCIA Arbitration Centre’s Arbitration and Mediation rules were a close adaptation of the LCIA Rules, with minor changes to align them with the DIFC LCIA Arbitration Centre’s needs.Adrian Winstanley, LCIA Director General was personally involved with the adaptation of the rules and I remember the long phone calls we had over certain matters to be considered in adapting the rules.

The Centre access to the LCIA’s unique database of arbitrators with the widest range of professional qualifications and expertise (legal and non-legal), was a great advantage to the joint venture. The DIFC-LCIA Arbitration Centre was established independently of the DIFC courts but recognizes that they exercise a supervisory role over disputes submitted to DIFC-LCIA Arbitration.

The launch event was held on 17 February 2008 and the DIFC-LCIA was inaugurated by His Highness Sheikh Maktoum Bin Mohammed Bin Rashid Al Maktoum, Deputy Ruler of Dubai.The Centre did close very soon after I quit the DIFCIn 2008 due to issues arising as to the constitutionality and jurisdictional reach of DIFC-LCIA and its ability to provide services to UAE and other companies incorporated outside the DIFC territorial jurisdiction. https://www.difc.ae/newsroom/press-releases/inaugurated-his-highness-sheikh-maktoum-bin-mohammed-bin-rashid-al-maktoumIn 2014 these issues were addressed by the passing of legislation to amend and restructure DIFC so that the technical objections to DIFC-LCIA would be put to rest.Having carried out the legislative steps, following renegotiated arrangements between the LCIA and the DIFC Dispute Resolution Authority the DIFC-LCIA has been relaunched, then reopened Last year with new arbitration rules (2016 Rules) replacing the former 2008 DIFC-LCIA Arbitration Rules for arbitrations commencing on or after 1 October 2016. Recently the former Registrar of the DIFC-LCIA left and was replaced in May 2017 by my dear friend Robert Stephen as the new registrar.

With the short-lived beginnings of the DIFC LCIA and the relaunch not so long ago, the case load seems not to be significant to publish but the LCIA in 2016 mentioned that the case load was 28 opened procedures, arbitration and other. The DIFC LCIA does have a woman on its board of trustees, Jackie van Haersolte-van Hof (Director General LCIA).

Attempted Suicide!!!

Do you still believe in Arbitration? My 1^st year law school daughter asked me…..

When you have spent many years of your professional life working closely with legal practitioners and institutions promoting ADR and advocating Arbitration hoping ultimately to position the UAE as an attractive seat for arbitration, and when you have personally worked on modern rules and drafts of an Arbitration Law and wrote about it, as I did in the National in my Legal affairs Column in 2011, http://www.thenational.ae/thenationalconversation/comment/complex-legal-minefield-in-need-of-a-federal-overhaul you feel rather sad when your daughter choosing her elective subjects for her second year in law asks you whether arbitration is something she should consider, and you say you are not sure in light of the latest developments.

Our concern for years over the limited number of provisions pertinent to arbitration under the UAE Code and the lack of certainty as to how those provisions will be applied by the courts in validating the arbitral award seems now the least of our concerns when the UAE  decided suddenly to make a change to the UAE Penal code Penal Code No. 3 of 1987, amended by Federal Decree Law No. 7 of 2016 adding arbitrators to experts and translators in Article 257 where criminal liability is imposed on those who issue decisions and opinions in contradiction with their duties of impartiality and neutrality.

Where did this amendment come from? Is it a result of the lack of regulatory initiatives deemed necessary for the practice to be lawful or may be the quality of arbitrators included in the arbitration centers’ lists? or is it related to the fact that arbitration is not working as it should be?What had gone wrong? “Was ADR really just an empty promise? We believed it was not, but lack of success with ADR at so many companies prompted us to take a closer look at how managers were implementing the ADR process”. This is a quote from the (Harvard Business Review report on ADR), which found that ADR as currently practiced too often mutates into a private judicial system that looks and costs like the litigation it’s supposed to prevent. At many companies, ADR procedures now typically include a lot of excess baggage in the form of motions, briefs, discovery, depositions, judges, lawyers, court reporters, expert witnesses, publicity, and damage awards beyond reason (and beyond contractual limits). https://hbr.org/1994/05/alternative-dispute-resolution-why-it-doesnt-work-and-why-it-does

The UAE  sweeping regulatory initiativewhich caught the entire legal market by surprise, despite the comforting calls promising that the prosecution has been involved earlier in guerrilla tactics where parties filed criminal cases against arbitrators, did not act randomly ignorant of the profession standards, and indeed dismissed all such claims, did not stop a number of arbitrators from rejecting the appointment and was not even the end of the saga, but was followed by late last year Dubai Decree No. 19 of 2016 establishing a new judicial committee in Dubai, empowered to determine conflicts of jurisdiction between the Onshore Courts and the DIFC Courts to rule on conflicting judgments between the two. The Committee is comprised of seven members: three judges from the DIFC Courts, three judges from the Dubai Courts and the Secretary General of Dubai’s Judicial Council, with the President of the Dubai Court of Cassation (one of the three Dubai Court judges) having the casting vote. The committee was established following a series of much-publicized recent judgments, where the DIFC Court confirmed that DIFC law permits the use of the DIFC Court as a “conduit” to enforce both foreign and domestic arbitral awards against award/judgment debtors located in Onshore Dubai, even where the award/judgment debtor has no connection with the DIFC whatsoever.

Is this what you may call an attempted suicide, as many practitioners do choose to call it already? Or is this a step in the right direction for the regulatory mechanism to pave the way for an arbitration practice that will uniquely stand out as the new regime able to handle the believer, the non-believer and the ADR atheist?

Diana Hamade’

Attorney at Law

UAE

International Advocate legal services

Po Box 10223 Dubai

www.ials.ae

www.ialsblog.com

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International law firms are preparing for GDPR, the EU General Data Protection Regulation. GDPR intends to strengthen and unify protection for individuals within the EU through a harmonised set of regulations. This makes it easier for non-EU companies to comply. GDPR will give citizens back the control of their personal data, extending the scope of EU data protection to all foreign companies processing data of EU residents. It will also simplify the regulatory environment for international business.

Given the sensitive data international law firms hold of EU citizens, they must be prepared to implement GDPR to avoid fines as high as 20 million Euros or up to 4% of global turnover. According to a survey by information management experts Crown Records Management, 44% of Law Firms in the UK had already appointed a data protection officer.

Data Protection impact assessments are necessary, as well as receiving and recording consent from clients on how their personal data is to be used. Clear information and explanation of how the collection of data is completed and what the firm will be doing with it is a requirement of GDPR.

International Law Firms will need to notify the data subject if a breach is likely to negatively affect the protection of the personal data or privacy of a data subject. Implementation will include allowing individual the right to have their data erased and forgotten which will may require an updated software system.

International Law Firms are urgently working to reduce the risks of breaches and ensure they follow GDPR by the 2018 deadline. In security and privacy, prioritisation of safeguards and targeting of limited budgets and resources is key to ensure both compliance with GDPR by the 2018.

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With cybercrime rates skyrocketing over the past years, it is acknowledged to be increasing at an alarming rate, targeting various sectors. In 2015, the legal sector appeared on Cisco’s annual ranking of industries targeted by hackers and for good reason.

As a sector which holds valuable and sensitive material to important individuals and organisations, criminals seek to obtain confidential client information for the purpose of financial gain or espionage, they do this through methods such as malware and other software programs.

Panama law firm, which holds over 11 million documents and reportedly establishes offshore accounts and companies for global power players, was victim of a ‘leak’. The files revealed the names of many world leaders who have established offshore tax havens.

Another reason is that law firms are seen as ‘weak links’ to exploit when seeking a client’s work. Law firms and their access to confidential materials, like a client’s patents, are therefore they are often targeted. For instance, for insider trading purposes, Russian cybercriminal “Oleras” and their gang had targeted 48 of the nation’s most prestigious law firms to steal sensitive client information.

Law practices all hold a huge amount of incredibly important and sensitive market information that hackers illegally seek to use to their advantage and for this reason, they are strongly urged to look at cybersecurity.

Despite these serious threats to the sector, law firms are behind on cybersecurity. While three quarters of employees in law firms with annual turnover above £500m are aware that they are very likely to be target of cyberattacks, research shows that respondents from the legal sector are 18% less likely to include external cyber security experts than non-lawyers in their attack contingency planning.

A large 86% of lawyers see cyber security as an issue for the senior executives, management needs to have a firm stance and clear message to employees and clients regarding preventing, detecting and responding to security breaches in information technology system. These risks need to be addressed quickly and effectively, because it can cause irreversible reputational damage and disastrous financial losses to a firm and its clients.

Sources:

http://www.legalweek.com/digital_assets/6602/013024_LW_0305_Benchmarker_FINAL_for_WEB.pdf

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A recent change to Article 257 of the UAE Federal Penal Code has alarmed lawyers across the region as it threatens the efficacy of arbitration. The amendment, which came into effect on 26^th October 2016, is originally in Arabic as published in Arabian Business, but can be translated as:

“Any person who issues a decision, gives an opinion, submits a report, addresses a case or proves an incident for the benefit or against a person, failing to maintain the requirements of integrity and impartiality, in his capacity as arbitrator, expert, translator or investigator, appointed by administrative or judicial authority or selected by parties, shall be sentenced to temporary imprisonment. Said categories shall be banned from being reassigned to such tasks, and be subject to the provisions of Article 255 of the present law.”

The article applies to anyone who ‘issues a decision, expresses an opinion, submits a report, presents a case or proves an incident in favour of or against a person’. This means that an arbitrator can be imprisoned if the court believes their decision is biased or ‘without integrity’, even if this was not intentionally done. ‘Temporary imprisonment’ is later defined as 3 to 15 years, a far vaguer and less forgiving sentence, discouraging arbitrators to volunteer their services.

Although the reason for the amendment is unclear, the impacts seem far more concrete. Since its implementation, several arbitrators have resigned from their cases in fear of prosecution let alone incarceration. Moreover, many law firms who operate in the region have asked employees to refrain from private arbitration to avoid losing employees due to temporary disbarment during investigation or imprisonment.

Perhaps the most significant impact is the threat to the UAE’s reputation for arbitration. Over recent years the country has been promoting its arbitration services and their success to rival other key players such as Hong Kong and the UK. Prior to the amendment, this had been successful; the DIFC Courts’ arbitration tribunal (the DAI) saw a 10% increase in arbitration cases and the Dubai International Arbitration Centre a 13% increase rise since 2016. However legal consultants suggest that this growth will not be sustained if this amendment is strongly enforced.

Professor Aymen Masadeh, legal expert in arbitration in the UAE, spoke out on the contentious article. “Indeed, all arbitrators need to maintain the requirement of integrity and impartiality. The article leaves a significant burden on the court as the scope of integrity and impartiality is not easy to determine. Further, evidence of bad faith or intention is not expressly required under article 257. However, the purpose of this article may allow the court to require such evidence.”

As expected, many lawyers are trying to convince the government to repeal Article 257. Although their attempts have been recognised, the article remains in full force today, only escalating the impacts on the UAE’s legal community in the near future.

Creative Word offer professional accredited training on relevant topics such as arbitration and mediation, aimed at both new and experienced lawyers who wish to know more about the recent changes to the law. Please contact us to find out more about the legal training we provide.

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