New Year brings with it splendid new opportunitiesJanuary 4, 2016 10:46
Banking on misery
Atique Naqvi discovers that there are at least some winners in the last two years' financial turbulance: lawyers, thanks largely to property and employment cases.
October 3, 2010 3:40 by Samuel Potter
He terms the increase as dramatic. A large number of cases are property disputes, as many developers struggle to honor their commitments and many buyers fail to pay their instalments due under sale and purchase agreements, he says.
There’s also been a rise in business disputes in Saudi Arabia. Al Tamimi’s head of the Saudi office, Nicholas Diacos, says that the number of cases has gone up, but not just because of the global downturn, but also due to the greater commercial sophistication in the business community.
There are four principal tribunals in Saudi Arabia. The Committee for Resolution of Banking Disputes; the Negotiable Instruments Committee has jurisdiction over negotiable instruments, principally promissory notes, checks, and bills of exchange. The third is the Securities Disputes Committee, which has jurisdiction over disputes involving securities. The fourth is the Labor Tribunal.
The most significant increase has been witnessed in the number of commercial and employment disputes, according to Diacos. On average, the cases are settled in 12 to 30 months before the Board of Grievances.
About arbitration, Diacos says it plays a minimal role in resolving disputes before a case goes to court because the arbitration law requires supervision of all arbitration by the court that would have jurisdiction, and the arbitral award is subject to review by that court.
Al Tamimi’s partner and head of the Qatar office, Ahmad Anani, sees the increase in commercial disputes as the inevitable effect of the global financial meltdown. In Qatar, however, the percentage of rise in disputes is very low. Anani says Qatar’s largest sector is the government sector and it is cash-rich, so defaults are minimal. However, in the private sector, disputes have increased by almost 15 percent, he says.
Most of the commercial claims are taken up by the Qatar Courts, Anani says, adding that the Qatar Financial Center does have its own court system, but only QFC-related cases can be resolved in such courts. He says a large number of claims filed in the recent past are property-related cases and default on banking facilities.
In Dubai’s DIFC Courts, property claims are much fewer than job-related cases. The law firm Habib Al Mulla’s head of banking and finance, Mazen Boustany, says there are a lot of employment claims at the DIFC Courts with fewer property claims.
“Due to the global economic crisis and the number of leveraged amounts available in the region and Dubai, it was expected that the number of commercial disputes would rise. When the credit crunch began a lot of these leveraged entities were not able to pay back their debts and this led to disputes,” he says.
The credit crunch and disputes do have an upside, as the rising number of business claims put the region’s judicial system to test. The current challenges will further improve the legal environment in attracting more international business to Gulf countries. “It is proven that in markets with efficient judiciary, the rate of GDP growth is high, and even foreign investment is stronger,” Beer says.
Dubai Courts have seen more than 40 of each other’s decisions enforced.
“It is reassuring that the DIFC Courts and Dubai Courts have established a strong track record in enforcing judgments between them,” the managing partner of Clifford Chance in the Middle East, Graham Lovett, says.
Pages: 1 2