Abdul Razzaq Law Firm Abdul Razzaq Law Firm : Law firm kuwait http://www.arazzaqlaw.com/ Thu, 19 Oct 2017 21:34:15 -0400 Thu, 19 Oct 2017 21:34:15 -0400 RSS Feed Generator by Abdul Razzaq Law Firm Copyright: (C) Abdul Razzaq Law Firm Home http://www.arazzaqlaw.com/home http://www.arazzaqlaw.com/home Founded in 1972, Abdul Razzaq Abdullah & Partners Law firm offers complete legal counsel for businesses in Kuwait, Iraq, and the Middle East, with multilingual lawyers practicing Middle Eastern and International law. Three decades of experience which the firm possesses gives an intimate understanding of the local market. Due to this reason and because of an extensive client base both within and outside Kuwait, ARALF is able to advice existing and prospective clients as per their requirement. The legal team provides the best service and attention to each and every one of our clients. The legal services which the law firm renders encompasses all major areas of law and is therefore qualified to assist its clients on legal issues they are likely to encounter in Kuwait. The firm's work indicates a longstanding commitment to client satisfaction, and an unparalleled dedication in the field of service. The Kuwait Law firm specializes in Corporate and Commercial, International Banking and Finance, Islamic Finance, Franchising, Construction, Securities, Taxation, Commercial Litigation and Arbitration, Capital Markets, Intellectual Property, Government Contracts, Foreign Investment, Real Estate, Insurance, Maritime and Shipping, International Trade, Oil and Gas, Projects and Privatization, Agencies and Distributorships, Private Client Services, Offset, Mergers and Acquisition. Thu, 19 Oct 2017 21:34:15 -0400 Law Firm Profile http://www.arazzaqlaw.com/kuwait-law-firm http://www.arazzaqlaw.com/kuwait-law-firm Following could be some of the reasons to select ARALF over other Middle Eastern Law Firms. Comprehensive legal services & Debt collection High quality, Proactive, pragmatic Cost Effective quality legal services Highly experienced lawyers proficient in international and Kuwaiti laws Prompt & Effective Communication with clients Customer Relationship Management service Maintains traditional values and legal Ethics Heritage and experience of 3 decades ARALF Law Firm is located in the city of Kuwait. You can speak to us at +965 244 9909 or Fax us at +965 246 9357. Thu, 19 Oct 2017 21:34:15 -0400 History of the Firm http://www.arazzaqlaw.com/history-of-the-firm http://www.arazzaqlaw.com/history-of-the-firm Three decades of experience which the firm possesses gives an intimate understanding of the local market. Due to this reason and because of an extensive client base both within and outside Kuwait ARALF is able to advice existing clients and prospective clients about the legal aspects of setting up business in Kuwait. To be precise, the legal services which the firm renders encompasses all major areas of law and is therefore qualified to assist its clients on legal issues they are likely to encounter in Kuwait. The firm's work indicates a longstanding commitment to client satisfaction, and an unparalleled dedication in the field of service. The firm specializes in Corporate and Commercial, International Banking and Finance, Islamic Finance, Franchising, Construction, Securities, Taxation, Commercial Litigation and Arbitration, Capital Markets, Intellectual Property, Government Contracts, Foreign Investment, Real Estate, Insurance, Maritime and Shipping, International Trade, Oil and Gas, Projects and Privatization, Agencies and Distributorships, Private Client Services, Offset, Mergers and Acquisition. Supported by experienced lawyers and external consultants from diverse backgrounds, Law firm caters to the areas of private client work, commerce and industry. The Firm has been successfully providing legal services and advice to Arabic, French and English speaking international clients. The law Firm offers a number of advantages which includes an intimate understanding of the legal environment, the market, governing laws and customs. The international department of the firm serves as a focal point for those who wish to invest or trade in Kuwait. Through effective and timely interventions the firm's international clientele are at ease when encountered with a legal issue and the rules of Kuwait are made transparent to them. Thu, 19 Oct 2017 21:34:15 -0400 Firm's Motto http://www.arazzaqlaw.com/firms-motto http://www.arazzaqlaw.com/firms-motto "ARALF's' perseverance is to provide expert legal advice at a reasonable cost with the end in view of attaining the confidence of clients". Thu, 19 Oct 2017 21:34:15 -0400 Mission Statement http://www.arazzaqlaw.com/mission-statement http://www.arazzaqlaw.com/mission-statement "The business of the law is to make sense of the confusion . . . to reduce it to order, but at the same time give it possibility, scope, even dignity." Archibald Macleish 20th Century American Poet Macleish's quote is more than just a collection of pretty words.  For us, it is definition of what we must do for every client, on every project.  We listen to our clients, getting both the details of a single action and the bigger picture. Because the firm's integrity is beyond question, clients are confident they can share information with us without risking a breach of confidentiality or betrayal of trust. This allows our team to not only create order, but to approach matters from a broader, possibly more innovative perspective. At Abdul Razzaq & Partners, our expertise extends beyond the courtroom to the boardroom. We work hard to understand our clients' businesses, not just their legal problems. When applicable, we find solutions and opportunities that not only resolve the matter at hand, but also lay the foundation for future activities. This approach saves the client money; it also saves clients something far more valuable time. Thu, 19 Oct 2017 21:34:15 -0400 Aim & Objective http://www.arazzaqlaw.com/aim-objective http://www.arazzaqlaw.com/aim-objective ARALF ensures high quality services to the utmost satisfaction of its clients. Firm's wide-ranging practice involves all aspects of Kuwaiti laws & regulations. ARALF helps clients to collaborate, share and create new business ventures by rendering expert legal advice enabling them to break down barriers, overcome obstacles and to make use of their full potential in various sectors of business. The firm knows what it takes to meet their client expectations for excellent work and responsive service. The firm also has distinct quality standards for practice which in turn ensures that clients are properly and consistently represented and advised. The firm acknowledges ethical and professional responsibility to clients, the courts and the public at large. Thu, 19 Oct 2017 21:34:15 -0400 Firm's Strategy http://www.arazzaqlaw.com/firms-strategy http://www.arazzaqlaw.com/firms-strategy Two business models work in tandem as the solid epitome for the firm's strategic vision: Firm's Exclusivity: Through programs including consultation and special presentations as well as by providing information on new laws and recent updates firm provides legal consultation on matters before legal complications arises. Firm realizes that the skill set and legal expertise required to successfully instigate a new business venture differs significantly from that which is necessary to successfully manage the existing one. Abdul Razzaq Abdullah Law firm has been successful in both identifying and cultivating new projects as well as strives to continually be the best in project management. Easy Accessibility: Clients would be able to view summary information of their case, get updated individual information on each and every legal issue, gets summary and detailed reports on the progress of a case, and can contact ARALF directly and easily if a dispute or a matter is in question. In all cases, clients maintain close contact with a senior lawyer who is responsible for their specific file. Legal requirements of corporate clients involve a very complex set of sequential tasks that can vary per the provisions of different jurisdictions or by the type of business involved in the project. As part of the firm's commitment to provide unparalleled service to its clients the internationally trained lawyers assist clients in their complicated business correspondences and render professional legal advice in questions about laws and rules of law. Firm creates long lasting relationships with clients and strives to work closely with the clients to come up with the optimal solution for each case. Thu, 19 Oct 2017 21:34:15 -0400 Global Network http://www.arazzaqlaw.com/global-network http://www.arazzaqlaw.com/global-network Despite having extensive international experience and abilities in-house, there are times when the best interests of the client are served by firms in the desired locality. Recognizing that, the Firm upholds and preserves close working relationship with law firms in most jurisdictions of the world, thus creating a network expanded through many years of personal acquaintance and formal arrangements. Whilst safeguarding independence, it nonetheless places the firm in an unrivalled position whereby enabling it to make available an international service across a global spectrum at cost effective rates. Thu, 19 Oct 2017 21:34:15 -0400 Legal Fees http://www.arazzaqlaw.com/kuwait-law-firm-fees http://www.arazzaqlaw.com/kuwait-law-firm-fees The firm strives to provide high quality legal service to clients at a reasonable cost and the fee structure which the firm follows is unrivalled because of its flexibility. Fee structure will come under the following arrangement; Retainer fee or annual fee Result oriented fee (percentage). Hourly rate or a fee based on the calculation of the actual work hours Thu, 19 Oct 2017 21:34:15 -0400 The Legal Team http://www.arazzaqlaw.com/kuwait-lawyers-attorneys http://www.arazzaqlaw.com/kuwait-lawyers-attorneys The firm's international and local practice is under the patronage of Mr. Abdul Razzaq Abdullah, the Managing Partner of the firm. Led by Abdul Razzaq Abdullah, Abdul Razzaq & Partners team has enormous experience in local, regional and international law. With almost a dozen highly trained legal professionals in-house, the Kuwaiti law firm boasts attorneys educated on three continents, at ten different law schools. The team encompasses proficient and experienced in-house lawyers and external legal advisors from around the world who are well versed in the Middle Eastern, Sharia (Islamic law) and International laws. More important for the clients, the diversity of attorneys is replicated in their specializations.  The firm includes specialists in commercial law, administrative law, investment law, corporate law, civil law, personal affairs law, and technology/intellectual property law. In addition, the multi-cultural make up of the firm and the broad international experience of the attorneys means that ARALF clients get to work with people who speak their language, literally and figuratively. This is critical, as success and client satisfaction stem directly from the ability of the attorneys and the clients to work together in a timely and efficient manner. Thu, 19 Oct 2017 21:34:15 -0400 Biography of Abdul Razzaq Abdullah http://www.arazzaqlaw.com/biography-of-abdul-razzaq-abdullah http://www.arazzaqlaw.com/biography-of-abdul-razzaq-abdullah Founder & Managing Partner Born in Kuwait, 1948.Education: Bachelor of Law, Kuwait University, 1972. Master of Law, South Eastern University, UK (Intellectual Property law) Abdul Razzaq Abdullah is licensed to practice before the Court of Cassation and the Constitutional Court of Kuwait. He is a distinguished professional practicing law in Kuwait since 1972 and who combines excellent legal skills with the practical cultural, political and financial advice necessary to ensure his client's success. Abdul Razzaq Abdullah has the dexterity and legal expertise required to successfully manage his client's legal issues. The success of Abdul Razzaq can be attributed to his absolute sincerity to his clients and his ability to work closely with them in order to achieve their objective. This commitment was developed much early in his career and was steadily increasing. When he started working as a lawyer for a prestigious law firm (Abdul Razzaq Al Sane Law Firm) he nurtured his work ethics and dedication to the legal profession. After gaining years of valuable experience, Mr. Razzaq decided it was time to utilize his experience and venture out on to his own. It was then in 1972 that he opened his own Legal Practice, Abdul Razzaq Abdullah & Partners Law Firm. As his experience began to grow so did his clientele. Mr. Razzaq become a notable lawyer within Kuwait and the Gulf and became legal adviser for major clients. Mr. Razzaq was even called upon many times for legal consultation in drafting the new Legislations. By specializing in Commercial Law practice Mr. Razzaq was able to focus his attention to the needs of his business clients, and to allow himself as well as his staff to become experts in the field of Commercial law. Realizing that the world is fast becoming a Global Society, Mr. Razzaq's vision made him establish an International Department in his Law Firm. As Kuwait serves as a hub for trade with major Middle East countries, opening its doors to international investors, the need for multi-jurisdictional lawyers grew. That is precisely why he successfully ventured strategic alliances with Law firms around the world. Mr. Razzaq has successfully established a network of Law Firms in Major Capital Cities around the world. The firm currently represents Clients in Multi-Million Dollar cross border transactions. Mr. Razzaq is a member of the Kuwait Bar Association and The International Bar Association (IBA). He is also a member of The Arab Regional Forum of the International Bar Association and a member of The Human Rights Institute of The International Bar Association.  Mr. Razzaq has been honored to be included in Who’s Who in the World. He has also been awarded for his outstanding contribution towards the study of Law in the “One Thousand Great Intellectuals Journal” and was also appointed as the Business Ambassador of Chamber of Commerce, India. Mr. Razzaq has authored several articles on the subject of Commercial laws of Kuwait, Agency law, Banking and finance, Intellectual property law, complexities of setting up business, E-commerce, Commission law etc. Advice to Kuwaiti & foreign business people: "I strongly advocate foreign investments because it paves way to economic prosperity. It appears that the basic economic situation in Kuwait is much favorable than any other time. Improvements in national economy will be largely dependent on reconstruction efforts, security and sound monetary and fiscal policies. The Central Statistics Department of the Ministry of Planning's figures show that the contribution of oil and gas sectors has declined steadily. This is mainly due to fluctuations in the oil market. Taking into consideration that our natural asset is depleting and the country has few other resources emphasis should be give to other modes of economic growth. It is to be noted that Kuwait is one of the pioneers in the Middle East region allowing foreign investment in its upstream. Kuwait consolidated its oil sector; privatized many of the government owned companies and allowed foreign investment even in its oil sector. Globalization of the world economy and trade has had a considerable impact on Kuwait's economy, which is keeping its gates open for the foreign investors through promulgation of many new laws supporting foreign investors. ABDUL RAZZAQ ABDULLAH’S STATEMENT: Quality attracts quality, as the adage goes and, at Abdul Razzaq & Partners, quality lawyers and quality service have attracted clients we are proud to serve. Thu, 19 Oct 2017 21:34:15 -0400 MANSOUR AL FADLI'S STATEMENT http://www.arazzaqlaw.com/biography-of-mansour-al-fadli http://www.arazzaqlaw.com/biography-of-mansour-al-fadli Majority of the people are still confused about the extent to which lawyers can support them in their legal requirements. The role of the lawyer is not confined to litigation or presentation of a case before the Court, as many believe.  Lawyers have several important functions to perform, in connection with their clients' problems. In many cases, the person seeking legal remedy may not be able to communicate his point of view in an easily apprehensible manner. On the other hand, a lawyer will always adopt a strategy of revealing the truth in accordance to sound legal principles. A lawyer would approach a case in an organized manner adopting a scientific and legal approach. Lawyers always suggest in his initial advice to the client, concerning a dispute, whether it is in the best interest of the client to approach the court or seek alternative dispute resolution and what substantive rights will govern if the case goes to trial. He also guides about the concerned provision of law and underlying principle which the court may adopt from time to time. Moreover, Lawyers would advise their clients about the advantages, disadvantages and strategies of mediation as an alternative remedy for dispute resolution. Following mediation, if found necessary, lawyers may act as mediators, assist in reaching on and in executing the settlement agreement through the appropriate court of law or through the execution department.   To be precise, the lawyer's role is to organize a legal issue by applying the relevant provisions of law and theories in such a way as to reach an amicable solution, thereby ensuring that the rights of the clients are protected and hence it can aptly said that a lawyer's job is multifarious. Thu, 19 Oct 2017 21:34:15 -0400 Working Team http://www.arazzaqlaw.com/working-team http://www.arazzaqlaw.com/working-team Thu, 19 Oct 2017 21:34:15 -0400 Support Staff http://www.arazzaqlaw.com/law-firm-kuwait-support-staff http://www.arazzaqlaw.com/law-firm-kuwait-support-staff The composition of support staff comprises of court clerks, administrators and paralegals. The firm possesses an extensive library with a wide array of international statutes and Kuwaiti laws in Arabic and English. The computerized legal databases are available on and off the Internet, placing an array of information just a click away. In order to stay abreast of regional and global economic and legal developments, law firm's lawyers regularly attend seminars, conferences; conduct workshops, give lectures, write and publish articles in various law journals. All of this contributes and facilitates ARALF's excellence. Thu, 19 Oct 2017 21:34:15 -0400 Working Pattern http://www.arazzaqlaw.com/working-pattern http://www.arazzaqlaw.com/working-pattern ARALF aims at: Providing cost effective legal advice and representation to clients helping them resolve their legal problems with as little disruption as possible to their primary business endeavors. Providing legal consultation on matters before legal complications arise through programs including consultation and special presentations as well as by providing information on new laws and recent updates. Coordinating with the in-house managers in solving day to day legal issues of the corporate clients. Thu, 19 Oct 2017 21:34:15 -0400 Legal System in Kuwait http://www.arazzaqlaw.com/legal-system-in-kuwait http://www.arazzaqlaw.com/legal-system-in-kuwait The Kuwaiti legal system like any other developed nation is based on the constitution. The constitutional law is considered as pivotal and the most sublime law, which clearly defines the State structure, the governing system, the hierarchy of the governing bodies and the rights and duties of its citizen. The State of Kuwait follows the civil law system with Islamic law significant in personal matters and has not accepted compulsory ICJ jurisdiction. Kuwait legal system gives a very prominent position to the civil laws of the country and therefore it will fill the lacunae of any substantive law if there is confusion. The State of Kuwait has legislations to protect the investment in Kuwait and because of this reason Kuwait possesses a robust economic structure suitable for its investors. The legal system of Kuwait is a concoction of British common law, French civil law, Islamic Sharia law, and Egyptian law. Kuwaiti Constitution of 1962 provides for an independent judiciary, and Law No. 19 of 1959 (amended in Law No. 19 of 1990) regulates the organization and functioning of the judiciary. The legal system comprises of the Civil Code, the Commercial Code, the Penal Code, and the Code of Criminal Procedure, contained in Law No. 17 of 1960. However, Article 2 of the Constitution provides that Islamic Sharia forms a major source of legislation but it does not prescribe stringent adherence to the principles of Sharia. Thu, 19 Oct 2017 21:34:15 -0400 Judicial System of Kuwait http://www.arazzaqlaw.com/judicial-system-of-kuwait http://www.arazzaqlaw.com/judicial-system-of-kuwait Judicial system of Kuwait functions in conformity with Law No 23/1980 for regularization of the judiciary. It claims its origin from the Amiri Decree No 90 of 1959, which is established on two cardinal principles which is the confirmation of the authority of courts over all civil, commercial and administrative disputes arising in the country and equality before law. The second principle is that at all times the supremacy of the State shall not be compromised with. The issues are classified into Civil, Commercial and Criminal categories. The Penal Code governs the general provisions applicable to crimes, penalties and culpable acts. Corporate and Commercial Laws are applicable for commercial disputes which in sequence will be interpreted in accordance to the Code of Civil and Commercial Procedures, the Law of Evidence and the Law of Criminal Procedures besides the underlying laws. The concept of precedent is not generally followed as a mode of practice yet decisions of higher courts are respected. The court structure is categorized in hierarchical order. The Courts of First Instance, The Courts of Appeal and the Constitutional Court are the three levels. The Courts of First Instance ("Kulya Court') which handle civil, commercial, personal status and penal matters is the lowest court in this hierarchy. Judgements from court of first instance are exposed to appeal before the Court of Appeal. However, Judgements in cases involving misdemeanors punishable by less than three years of imprisonment or fines of less than 250 Kuwaiti dinars cannot be appealed to a higher level court; commercial and civil judgments involving fines less than 1000 dinars are considered to be final. The criminal courts settle issues related to misdemeanor and felony. The Courts of Appeal, which has a panel of three judges, serve as both intermediate and final courts of appeal. The Court of Cassation, incorporated to the system in 1990, is the apex court in the hierarchy and serves as the final court of appeal. Constitutional Court was established by Law No. 14 of 1973, which holds the exclusive authority to interpret the constitutionality of legislation and is authorized to evaluate election procedures. The Court comprises of five members who will be chosen by the Judicial Council through secret ballot and one of the members will be appointed by decree. A significant guide to the judiciary in rendering opinions about legislation is the Explanatory Note stating the legislative intentions of the legislature which usually as a rule accompany all legislative acts. Law No. 26 of 1969 established the Court of State Security, to try cases involving issues that affect the internal and external security of the state. The Court comprises of three members who are recommended by the Minister of Justice and authorized by decree. Judgment made by this court is final. Legal profession is governed by Law No. 42 of 1964. Judges are appointed by Amiri decree, and are not supposed to hold any other profession after appointment. The impeachment of a judge is to be instigated by The Judicial Council, and the Judiciary Disciplinary Council takes disciplinary action. The system of the State of Kuwait is based on the separation of powers. Article 50 of the Constitution provides that "The Government works based on the principle of separation of powers enriching each other in accordance to the provisions of the Constitution". Court of Appeal publishes the magazine the Judiciary and Law which provides information on recent judgements of the court of Cassation. The Ministry of Justice publishes a magazine which details new legislations, gives information about the recent developments in law as well as review on recent judgements. The Lawyer magazine of the Kuwaiti society of Lawyers concentrates more on research topics and the Magazine of the law centre gives information on Islamic law. Thu, 19 Oct 2017 21:34:15 -0400 Protection Strategy of Arbitration clauses are Successful before Kuwaiti courts http://www.arazzaqlaw.com/protection-strategy-of-arbitration-clauses-are-successful-before-kuwaiti-courts http://www.arazzaqlaw.com/protection-strategy-of-arbitration-clauses-are-successful-before-kuwaiti-courts Recently the firm's lawyers represented a foreigner company in a successful defense of claim brought against it by the Kuwaiti Company pertaining to arbitration clause in its Agency Agreement and won $2 million in the legal battle. The firm's lawyers are proud to say that the client was successfully defended in order to ensure maximum justice. The claim concerned the existence and extent of the Foreign Company obligations to reimburse for the cost of works for a project. The major defense was that the Kuwaiti company has no jurisdiction to try a case in Kuwait where an arbitration clause is prescribed in the Agency contract. After several months of argument over the interpretation of the contract and the application of Kuwaiti law, including evidence from witnesses and experts, the claim was dismissed confirming that the Kuwaiti court has no jurisdiction. The court ruled that the power of the Arbitrator shall supersede a party's right to seek relief from a local court. This is an excellent outcome confirming the implementation of Contracts under Kuwaiti law and underlines how being able to draw upon a contract for the greater benefit of foreign clients. Thu, 19 Oct 2017 21:34:15 -0400 Legal Perspectives http://www.arazzaqlaw.com/legal-perspectives http://www.arazzaqlaw.com/legal-perspectives The legal system as well as the geographical position of Kuwait is well suited to meet the needs of people doing business in Kuwait. Article 29 of Kuwait constitution defines that 'All people are equal in human dignity and in public rights and duties before the law, without distinction as to race, origin, language or religion'.  The State of Kuwait is located to the North-West of the Arabian Gulf. Arabian Gulf lie on its East, South and South-West is the Kingdom of Saudi Arabia, and in the North and North-West is Iraq. Kuwait is strategically located within reach of major consumer markets of Iran, Saudi Arabia, and Central Asia and is considered to be a hub to the Arab world. Kuwait follows a noninterventionist commercial policy. The Customs Duties are minimal; the rate is just 5% on the C.I.F. cost on almost all imports. Fresh vegetables, fruits, livestock and such items are exempted from the Customs Duties. No restrictions are there in Kuwait regarding quality or quantity except that the imported goods should match Kuwaiti standards (Halal). Besides, there are neither restrictions on foreign exchange transactions nor any ban on trade with other countries except Israel. Official tenders issued by Government Departments and Ministries, Oil Companies and Joint-Stock companies are open to all Kuwaiti Contractors and Contracting Companies who are members of the Kuwait Chamber of Commerce and Industry. Thu, 19 Oct 2017 21:34:15 -0400 Enforcement of foreign judgements in Kuwait http://www.arazzaqlaw.com/enforcement-of-foreign-judgements-in-kuwait http://www.arazzaqlaw.com/enforcement-of-foreign-judgements-in-kuwait In an era of globalization with so many investors entering and establishing themselves in the Muslim world a sound knowledge of how Muslim laws operate would be crucial for anyone involved in banking, insurance, syndicated loan agreements, agency contracts and distributorships.  Judicial Arbitration Law No. 11 for the year 1995 establishes the procedure whereby a panel of arbitrators may be formed in the Court of Appeals. Article 1 of the said law states that one arbitration board or more shall be formed in the house of the court of Appeal, consisting of three judges and two arbitrators, each of the disputing parties can choose from the arbitrators enrolled, from the tables prepared in this regard in the arbitration department of the court of Appeal. If both the parties have failed to do so then within ten days following the request from the arbitration department to select the arbitrator the department can appoint the arbitrator. A senior most member shall act as the chairman, who shall at least be in the grade of a counselor. The board shall hold its meetings in the house of the court of appeal or in such other place as the chairman may suggest. The resolution concerning the appointment of the arbitrators shall be issued by the supreme judiciary council, for duration of two years, from the date of issuance of the resolution. Article two of the said Law confirms that the five-member panel shall decide on the following matters: Any arbitration matter that the parties agree to refer to the panel. Any arbitration matter arising out of a contractual dispute where the parties failed to specify another panel in their arbitration agreement. Exclusive jurisdiction over disputes between the Ministries, or other governmental authorities and public juristic persons where the Government owns all its share capital and in disputes between such public juristic persons. Disputes between individuals or corporate entities and any ministry, other governmental entity or public juristic persons. The individuals and corporate entities can choose either to proceed to the court or force the government entity to submit to judicial arbitration as long as the same dispute is not already being litigated in the courts. As per Sharia Law an arbitral award has a jurisdictional character and is binding and enforceable. According to the Maliki, Hanbali, Hanafi and the majority of the "Shafi' School an arbitral award is as enforceable as a court order. As to the enforcement of foreign arbitral awards, the attitude of Sharia is dependant on the bilateral and international conventions and treaties to which the party states have entered. Moreover, the Muslim judge may set aside a foreign award or refuse enforcement if the award violates the general principles of Sharia and/or its sources (Quran and Sunna). Foreign arbitral awards are enforceable in Kuwait but the principal requirement is that of a reciprocal relationship. The enforcement of foreign arbitral awards is simpler when compared to the enforcement of foreign judgments. Reciprocity can easily be established in case of enforcement of arbitration awards as Kuwait has ratified the New York Convention on the Enforcement of Arbitration Awards by enacting Law No. 10 of 1998. Thus an award passed by a foreign arbitral tribunal may be enforced in Kuwait, provided the country where the award has been issued is also a member of the Convention. The enforcement of foreign arbitral awards are comparatively simpler if the matter in dispute is arbitrated according to Kuwaiti Law, provided it does not contradict mandatory provisions or constitutes criminal conduct under Kuwaiti Law. Thu, 19 Oct 2017 21:34:16 -0400 Kuwait Free-Trade Zone http://www.arazzaqlaw.com/kuwait-free-trade-zone http://www.arazzaqlaw.com/kuwait-free-trade-zone  Kuwait's Free Trade Zone (FTZ) which was formally launched in1999 is located in a 1.5 million square-meter area in the western part of the main commercial port of Shuwaikh. The National Real Estate Company a private company in Kuwait is the authoritative body to develop and manage the zone. The company can retain 20% of the FTZ's operating profits and the rest of the profit will remain with the state. It can also hold 90% of the profits from any of the facilities that it builds and finances. The zone includes warehouses with storage facilities, exhibition grounds, banks, courier companies, and insurance companies.  The enticement includes 100% foreign ownership without any commercial taxes or currency restrictions and competitive insurance.     Thu, 19 Oct 2017 21:34:16 -0400 Gateway to Iraq http://www.arazzaqlaw.com/gateway-to-iraq http://www.arazzaqlaw.com/gateway-to-iraq The State of Kuwait which is located to the North-West of the Arabian Gulf has Iraq on its North-West border. Kuwait is a safe place to do business in Iran, Saudi Arabia, and Central Asia and is considered to be a hub to the Arab world. The vicinity of the country offers far-fetched opportunities for overseas companies. For the developers and corporate giants who wish to establish their presence in the Middle Eastern region ARALF, Law Firm Kuwait lend a hand. It demands high level of proficiency and legal expertise to explain the intricacies of Middle Eastern laws and only a lawyer who is experienced and well versed in the local laws can render expert advice on this.  With a wide network of lawyers around the Middle East and experienced in-house lawyers ARALF render legal assistance to foreign companies in formulating strategic business plans and in negotiating commercial transactions. With an end in view of assisting people who are interested in doing business in Iraq and to those who are involved in various reconstruction projects in Iraq the firm act as a gateway. ARALF provides the service of well experienced lawyers through liaison with lawyers in Iraq. Thu, 19 Oct 2017 21:34:16 -0400 Nature & Scope of Legal Services http://www.arazzaqlaw.com/nature-scope-of-legal-services http://www.arazzaqlaw.com/nature-scope-of-legal-services ARALF provides a comprehensive package of legal services in various areas of practice. The firm renders legal advice and consultation for both public and private sectors. Besides Litigation, ARALF lawyers are skilled in Alternative Dispute Resolution Mechanisms, such as Arbitration and Reconciliation. The International Department provides legal translation for all kinds of legal documents.   Thu, 19 Oct 2017 21:34:16 -0400 Consultation and Legal advice http://www.arazzaqlaw.com/consultation-and-legal-advice http://www.arazzaqlaw.com/consultation-and-legal-advice The firm has a strong industrial prominence and represents developers, financial institutions and corporate bodies. ARALF provides assistance not only in expansion phase of a project but also to formulate, legalize as well as restructure and rationalize business ventures. The firm helps to plan and implement all sorts of transactions, whether it is complicated legal contracts or conveyance, cross-border deals and or acquisitions.   Thu, 19 Oct 2017 21:34:16 -0400 Litigation and Dispute Resolution http://www.arazzaqlaw.com/litigation-and-dispute-resolution http://www.arazzaqlaw.com/litigation-and-dispute-resolution Local and International Litigations Local and International Arbitration Mediation When litigation is the ultimate solution, ARALF act promptly pursuing every legal tactic possible to achieve decisions favorable for the clients. The lawyers have a long term experience in litigating before the Kuwaiti Courts of all levels and are experts in debating cases at the Department of Experts. The law firm has vast experience in arbitration in Kuwait and internationally. On the international level, the lawyers have participated in different international panels pursuant to the provision of the International Chamber of Commerce (I.C.C.) and (AAA). The lawyers have represented clients before the International Panel of Arbitration such as the International Chamber of Commerce in Paris, in different capacities. Some of the Lawyers have been elected to serve as arbitrators in some panels. Thu, 19 Oct 2017 21:34:16 -0400 Execution http://www.arazzaqlaw.com/execution http://www.arazzaqlaw.com/execution Firm maintains substantial influence over a wide variety of parties to facilitate the execution process. If it requires involvement of the firm in inquiries that reveal the financial status of the debtors the firm actively pursue such inquiries. The procedure for enforcing the Court's judgment can be summed up as follows: Dispatch of the court decree promptly to the debtor. Avail the option of seizure, sequestration, apprehension, arraigns detention and obstruction from travel. Incapacitate debtor's bank accounts and assets. Thu, 19 Oct 2017 21:34:16 -0400 Debt Collection http://www.arazzaqlaw.com/debt-collection http://www.arazzaqlaw.com/debt-collection The firm takes the following steps to ensure the full collection of the debt: Judicial warning to the debtor. On failure to comply with the warning to settle the debt a Court decree is obtained pursuing a lawsuit at the court. Precautionary measures are taken against the debtor. Thu, 19 Oct 2017 21:34:16 -0400 Arbitration http://www.arazzaqlaw.com/arbitration http://www.arazzaqlaw.com/arbitration Knowing that many attorneys in the firm have appeared as advocates and arbitrators before International Arbitration Forums, it should come as no surprise the firm has an arbitration team that is second to none.  The firm has represented companies in the commercial, real estate, and engineering and construction sectors, winning settlements involving tens of millions of dollars.  The firm also has experience in other forms of alternative dispute resolution, including mediation and reconciliation.   Thu, 19 Oct 2017 21:34:16 -0400 Articles & Publications http://www.arazzaqlaw.com/kuwait-laws-publications http://www.arazzaqlaw.com/kuwait-laws-publications Following are some legal whitepapers that you can read : Thu, 19 Oct 2017 21:34:16 -0400 Implication of negotiable instruments under kuwaiti law http://www.arazzaqlaw.com/implication-of-negotiable-instruments-under-kuwaiti-law http://www.arazzaqlaw.com/implication-of-negotiable-instruments-under-kuwaiti-law A negotiable instrument is a document in writing that represents an unconditional or unrestricted promise to pay a certain amount of money, specified on it, upon the demand of its owner. The rapidness of commercial transaction which demanded flexibility in business paid way for the introduction of alternative means of money transactions. Moreover, traders would often prefer future payments than immediate payment where he can avail the benefit of a well thought out structure of payments at a previously determined date. The main advantage of the negotiable instruments is that it can be transferred from one person to another, through procedures which are easy and swift. These modes of transaction would reduce the use of money and thus minimizes the amount of money circulated in the market. Moreover, unlike ordinary contract documents the formal requirements of a contract like offer, acceptance or consideration are not generally applicable to negotiable instruments. Therefore, the right of the owner to demand payment is not subject to set-off or counter claim, and is not based on the validity of the underlying contract giving rise to the debt. Moreover, these do not impose any obligation or responsibility on the part of the owner or a condition, in order to claim the amount specified on it. Cheques or promissory notes are often referred as "commercial papers or bills of exchange" because of its flexibility to use it on a future date. A bill of exchange is a written order by the drawer to the "drawee" (a person ordered in a document to make payment) to pay money to the payee. The major difference between the check and the bill of exchange is that the cheque is payable upon reading it while the bill of exchange is payable at a certain point in time in the future. The check will become payable upon reading it while the payment consideration in the bill of exchange is postponed till the maturity date. Moreover, punishment is prescribed for issuing a cheque without balance but there is no punishment for issuing a bill of exchange without a payment consideration because bill of exchange is often used as a mode of credit while the cheque would always be treated as a mode of payment. Though Kuwaiti law does not provide any clear definition for 'cheque' the Jurisprudence (Fiqh) defines it as "a written order or a note for a particular purpose by means of which a person order the 'drawee' to make payment (in most cases the 'drawee' would be one of the banks itself' and the Kuwaiti law specifies that the drawee shall be a bank). The right of execution of a cheque is linked to the possession of the document itself i.e., a person can write "pay to the order of" on the back of a check and turn it over to someone else. By handing over a cheque he is actually guarantying payment. The intention of the party at the time of delivery of the cheque, is not a valid defense and the liability shall ensue from the date of delivery of the cheque. The responsibility of the "Drawer" (a person who signs or is identified in a cheque as a person ordering payment) shall be released from his liability only when the beneficiary receives payment. The validity period of a cheque or promissory note shall as per the prevailing system of a country and Kuwaiti law does not prescribe any time limitation and therefore the cheque would be treated as valid indefinitely for an undetermined period. Post dated cheques would often serve the purpose of a promissory note, in Kuwait. Promissory note is a document through which the borrower promises the lender that he will pay back the money according to the terms mentioned therein or in other words it is a written promise to pay a certain sum of money, at a future time, unconditionally. But it is not a mere acknowledgement of the debt. A promissory note payable to order or bearer becomes authenticated by endorsement, and the holder may bring suit on it in his own name. Although a simple contract, a sufficient consideration is implied from the nature of this instrument. Most of the rules applicable to bills of exchange affect promissory notes, as well. Per Kuwaiti law a particular form is required for these instruments. The Commercial law of Kuwait prescribes some prerequisite for the Promissory note and therefore the deed shall not be treated as promissory note if it does not comply with those provisions. There are two vital criteria which determines the validity of a note; first, that it be not payable at all events, not dependent on any contingency or payable out of any particular fund. And, secondly, it is mandatory that it should be used for the payment of money only. An example for another widely used negotiable instrument is the bill of lading. A bill of lading does not carry the name of the parties but only the carrier's name. A contract in a bill of lading can be transferred to the consignee, when he receives the document. An implied contract can also be established between the carrier and the consignee when the later claims the goods at the destination. Contracts can also be established between the carrier and consignee through an "agency clause "or "third party" clause.  Punishment for dishonor of cheques Article 523 of the Kuwaiti law states that, the drawee shall bear the detriment resulting from the payment of a cheque in which the signature of the 'Payee' is forged, or if the data on it is misrepresented, provided the fault cannot be attributed to the drawer. The drawer shall be considered, particularly, at fault, if he does not exert due and diligent care in safekeeping the cheque book, which is handed over to him from the bank. The Decree of Law no. 15 for the year 1978 (which supersedes Article 237 of Kuwaiti Penal Code) stipulates punishment of imprisonment, for a period not exceeding five years and with a fine not exceeding five hundred dinars or each of either punishment, for a person who, with bad intention, commits any of the following acts: if he issues a check that has no current and cashable payment consideration. If he withdraws from his account, after issuing the check, all or some of the money in the account, in such a way that the remaining amount is not sufficient for the value thereof. If the drawer gives instructions to the drawee not to cash the check. If he intentionally prepares the check or signs it in such a way that prevents the check from being cashed. Though cheque resembles other commercial papers like bills of exchange, or promissory notes, it is unparallel to other negotiable instruments because it effectively meets all the objectives of money transaction. Due to the reason that check plays a predominant role in the economic system of a country Kuwait has developed a well thought out system of law to counter any related crime. Thu, 19 Oct 2017 21:34:16 -0400 Kuwaiti Joint liability Company and Limited Liability Company - A comparative study. http://www.arazzaqlaw.com/kuwaiti-joint-liability-company-and-limited-liability-company-a-comparative-study http://www.arazzaqlaw.com/kuwaiti-joint-liability-company-and-limited-liability-company-a-comparative-study Due to ever increasing commercial requirements people formed companies and in order to regulate them, new laws came into existence. Even prior to the advent of Islam dealings in the form of companies existed among the Arab community and during the dawn of Islam, companies were categorized as companies of consent, proprietorship, companies based on contracts, capital companies and partnerships. Article 4 of Law No 15 of 1960 defines the joint liability company as a company incorporated by and among two or more persons under a specific name, to perform activities of commercial nature, where the parties are jointly liable for the company's liabilities. On the other hand, a limited Liability company is a company consisting of a maximum of thirty members and a minimum of two, each liable to only his share in the capital (If the spouse is a partner then the minimum number of partners shall be three). If the quorum is not filled within a period of one month from the date of commencement of business the company shall be treated as liquidated and the existing partner would be expected to settle all dues ensued therein from his personal assets. Both in a Joint Liability Company and Limited Liability Company the Articles of Incorporation plays a pivotal role in the determination of the rights and liabilities of the partners. The Articles of Incorporation override any other agreement signed on or before its incorporation. The main advantage of the Articles of Association is that the rights of all the parties would be protected equally and impartially. The AOI of the Joint liability Company shall be drafted in the official deed and encompasses information including, the name of the company (or trade name), headquarters of the company, partner's name (of which one of them shall definitely be a Kuwaiti citizen), manager's name (who may also act as the signatory but need not be partner), objective, capital, equity contribution, profit/loss computation., term and such other information as is required. The AOI of the Limited Liability Company shall include, the company name (with the phrase 'limited liability Company'), location details, partner's name, capital contribution and precise description about each partner's share, conditions for waiver of rights, names of managing partner and board of directors, objective, term,  profit/loss allocation., term etc. Major differences between Limited Liability Company and Joint Liability Company Limited Liability Company is more popular among local business men and is often referred as WLL Company. Most of the requisites of a joint liability company are applicable to limited liability Company, as well. However, there are certain areas of disparity which makes it a better choice when compared to the joint liability Company. The Limited Liability Company is a hybrid business entity that combines the characteristics of a partnership and a corporation. It allows the members to actively participate in the management and control but provides limited liability. The purpose of the W.L.L Company is to limit one's exposure to an investment or "risk". In theory, the exposure is limited to the investment or involvement. The WLL Company is not allowed to enter into areas like banking, insurance or other investment sector. The name of the limited Liability company shall be in accordance to the nature of business it conducts and the name of the partners can also be used along. One of the partners of both the WLL and Joint Liability Company must be a Kuwaiti citizen holding a share equivalent to or more than 51%. The debts, obligations of a limited liability company whether arising through contracts or otherwise are debts of the company and the partners/managers are not personally liable for any such debt or obligation. The liability of a partner in the limited Liability company is limited to the shares which he holds and hence the Company would not be liable to settle his personal debts. However, in a joint liability company if the company is bankrupt all the partners become bankrupt and would be requested to settle the company's dues from their personal assets, in proportion to the share allocation. The partner shall be responsible for any and all liabilities incurred during the continuance of company's business and he will not be released from his liability if it arises during the period while he was partner of the company. Nevertheless, the (personal) creditors of the 'partner in debt' may settle their dues from partner's profit share though it is prohibited to claim their right from the capital of the company, irrespective of whether it is the said partner's share. The law requires that the name of the Joint Liability Company should be compatible with the existing structure of the company. If the foreign partner agrees to use his name in the company's title then he shall be deemed liable to any third party who conducts business with the company, relying on his (company) name or goodwill.  The Share contribution may be in the form of assets, landed property, money or talent. However, it is mandatory that the profit/loss distribution should be included in the Articles of Association, in such a way as to avoid any kind of confusion on a later stage. It is also to be noted that if the AOA favors one of the partners relieving him from all liabilities or if it denies profit to a partner then the company can be dissolved, at the request of the partner, who bears the entire burden of loss. In such an event the loss shall be calculated based on the profit allocation of each party. It is also provided that the objective of the parties should be clear in the Articles of Association which means that the parties shall enter into agreement on good faith and mutual understanding so as to avoid any false claim. In a joint liability company the partner may not assign his right to any other person without the consent of all the partners of the company or through majority vote unless there is such a provision in the Articles of Association. However, in a WLL company each partner can transfer his rights to his legal heirs, provided the number of heirs shall not exceed the prescribed limit. To summarize this topic, it can be said that though the WLL Company claims many advantages over the Joint Liability Company, the latter is treated as more trustworthy and reliable seeing that the goodwill of the parties play a vital role in its incorporation. Thu, 19 Oct 2017 21:34:16 -0400 An overview of privatisation in kuwait economy http://www.arazzaqlaw.com/an-overview-of-privatisation-in-kuwait-economy http://www.arazzaqlaw.com/an-overview-of-privatisation-in-kuwait-economy Privatization means the transfer of ownership or management of a project/industry from the government to the private sector for increasing competition among companies which in turn would brings forth capital flow to the market, by generating additional foreign investments and job opportunities. In Kuwait, significant changes are happening in the economic and political scenario which would indicate a shift to a strategy that, as opposed to trying to protect economy from the rest of the world, aims to take advantage of opportunities offered by participating in the international trade. However, if the privatization is to be beneficial for the country the laws should elucidate the guarantees and incentives for investment in the country; should define the structural frame work and shall simplify the procedures for establishing new projects. A comprehensive legislative and organizational framework supporting the privatization process through the amendment of existing laws and promulgation of new laws would be necessary. Proper laws for stock trading and taxation are essential for encouraging these kinds of investments. The laws should be revised to create a free market guaranteeing equality and fair play; counteracting monopoly and hoarding. The laws governing privatization is vital for the development and sustenance of the country because privatization deals with the government property. Privatization strategy of Kuwait Among important initiatives for privatization, the government has revamped the commercial laws and there is a proper controlling authority for this purpose, the Kuwait Investment Authority (KIA), takes care of the players in the market. In 1992, the KIA implemented a three-phase privatization program that aims to reconstruct the economy and minimize the dependence on oil income. The legislature's role Choosing the most appropriate mode of privatization for each project relative to the operating conditions and requirements of the concerned sector is the major role of the legislature. There may be proper schemes from the government to attract both local and foreign investors. Preservation of the rights of all parties i.e., the investor, the government, the consumer and the working class is the responsibility of the legislature. The legislature should take care of the investor who is the active player in the deal because without him there would not be any new venture. New and existing laws should be helpful in maintaining the investor's enthusiasm so that he will continue doing similar business. To a certain extent the government interference should also be curtailed or minimized so that the interference will not turn out to be tyrannical. Moreover, the laws should simplify the process of establishing and registering companies. While laying the groundwork for similar projects, enacting legislation to license private investments in the telecommunications and electricity sector, transparency and integrity should be kept in pace with the international standards. The customers should not be ignored and the interests of the laborers or the working class should be protected. Any law which denounces the rights of the consumers should be avoided or else the country would face the problems of monopoly and adverse quality standards. Methods of Privatization There are two different but effective laws for privatization; one method is to issue a single code encompassing all privatization measures and the second method is to draft different laws for different projects; In order to instigate the privatization process and to strengthen the capabilities of the government to successfully execute the privatization program, an institutional framework and its mechanisms have been formulated by Kuwait adapting the following methods; Sale of Government Shares. Sale of government shareholding through Kuwait securities Market in cases of joint stock companies or in such other manner that ensures the maximum possible revenue to the government. General tendering: Among the tenders submitted the most suitable bid would be selected in relation to standards specified for this purpose. Special tender committees are formed if required based on the nature of the project. Law No. 37 of 1964 (modified by Law Nos. 13 and 31 of 1970 and 1977, respectively) concerning Public Tenders (the "Tenders Law") provides that any procurement made by the Kuwait Government, with a value in excess of KD 5,000, must be conducted through the Central Tenders Committee procedures in order to ensure competitive pricing. Management Contracts: The terms of the contract shall govern the relationship between the parties and only those companies proficient in a particular area of business would be given a chance to propose. Under this mode the public facilities would be managed by the private sector for specific period of time. Normally, this will be for a short term which may or may not be renewable. Lease arrangement: In this kind of arrangement, the government would lease public facilities to the private sector for a certain period of time for a price agreed amongst the parties. The private investors would run the whole project by themselves without any governmental interference and the rent would be paid to the government per the terms agreed in the lease deed. This is generally applicable for projects which were initially owned by the government and hence there are certain specific rules which are to be complied with. Cooperation with the government: The government may cooperate with certain prominent players in the market to generate more revenue and generally the income allotment would be based on capital contribution of each party. In rare cases, the government may sell part or all of its property to an investor and authorize him to use it. However, the government should be convinced of the intentions and interests of the players. Though one cannot deny the fact that there are certain economic activity which needs special skill and technical know-how which cannot always be found in the public sector there is also the threat that the private sector would be more interested in the profit than the well being of the society. The government while seeking more financial gains through economic and social development should not sacrifice the well being of its people and an institutional framework for privatization should always be in place. To be precise, privatization in Kuwait involves both the reduction of the government's stake in some existing public sector companies, or creating new opportunities for the private sector to invest in strategic industries previously supported by government funding. The aim is not privatization which strikes out government intervention or its role in the economic activity but to coordinate with the private sector which is more capable to run the project which at the end make the market active and generate more job opportunities. Thu, 19 Oct 2017 21:34:16 -0400 Unfair competition and the implication of competition law of kuwait http://www.arazzaqlaw.com/unfair-competition-and-the-implication-of-competition-law-of-kuwait http://www.arazzaqlaw.com/unfair-competition-and-the-implication-of-competition-law-of-kuwait Competition will undermine the development of a society as it would lead to hoarding which is intermittent when viewed from the buyer's and seller's perspective. The requirement is actually felt by many countries when they progress from a developing to a developed nation. Therefore many developed countries have very effective competition law which provides appropriate rules and regulation to ensure free trade and to prevent unfair practices.  Though the harmful effects cannot be curtailed altogether, it can at least be controlled through the proper application of effective laws. If laws can forbid the bad effects of monopoly then at least a certain amount of the unduly generated profit can be distributed to the sufferer as compensation. There is a moral responsibility for each and every one to do or abstain from doing anything which curtails the interests of the other and the Kuwaiti law classifies this under civil and criminal responsibility. This responsibility may be created through an agreement entered into between the parties, which can be termed as a contractual responsibility or an "Omissive responsibility". The omissive responsibility would include the responsibility for personal act (error, damage and causal relation), and omissive responsibility for others' acts. Unfair competition would lead to punishment under both civil and criminal law. In civil law, a private party (e.g., a corporation or individual person) files the lawsuit and becomes the plaintiff. In criminal law, the litigation is always filed by the government, who is called the prosecution. When the damage is done towards the society as a whole then it would become a crime. One of the most fundamental distinctions between civil and criminal law is in the notion of punishment. In criminal law punishments are punitive in nature. In contrast, a defendant in civil litigation is never incarcerated and never executed and the so-called punitive damages are never awarded in a civil case, under contract law. In general, a losing defendant in civil litigation only reimburses the plaintiff for losses caused by the defendant's behavior. Commercial law of Kuwait Monopoly would be the result of uncontrolled competition and the Commercial law Number 68 of 1980 deals with illegal competition, in Kuwait. The law does not allow gain without a reason that is, illicit gain and amounts of money received through unlawful gain. The law specifies that if the commercial title is used by anyone other than its owner or if the owner uses it in a manner violating the law, the concerned parties may request the prohibition of use thereof and may request the omission thereof if it is enrolled in the commercial register. They may recourse for compensation if it be justified. These provisions shall also be applicable in the use of the trade marks and commercial information as stated herein. Per the law a merchant may not seek fraud and deceit to sell out his goods and may not publish false data which may cause detriment to another competitive merchant, otherwise he shall be liable to indemnification. The merchant may not publish discrepant matters relating to the origin or the description of the commodities or relevant to the importance of his commercial business. He may neither in contrast to reality announce that he acquired a grade, a certificate or a price, nor seek any other way including deceit to take away the clients of another competitive merchant, otherwise he shall be liable to indemnification.  Moreover, the merchant may not induce the workers or employees of another merchant to assist him in taking away the clients of another merchant, or leave the service of other merchant and join his service to understand the secrets of his business. These acts shall be considered illegal which necessitates indemnification. If the merchant gives a previous employee or worker a discrepant certificate concerning good conduct and this certificate mislead another merchant of good faith and incurred detriment to him, the latter is entitled to adequate compensation as the case may be and according to the circumstances. Any illegal competition is prohibited, where the illegal competition is performed by a merchant who violates the existing usage or rules of the commercial transactions in the State of Kuwait or divert clients of a competitive merchant or harm his interests or if there is retardation of liberty of commerce by retraining or sidestepping competition in the field of commodities production or distribution or services within the State. The commercial information about a product should be true in all sense. The illegal competitive acts in particular are; The frank or explicit agreement for the limitation of sale price of commodities or services to others. The retardation of the entrance of a competitor in the marker without a legal reason. The offense of tarnishing another merchant's reputation or depreciate the value of his commodity. Any action in this respect causes disorder in the market to harm a merchant or other merchants. Forbidding a person to win a chance is also not allowed under Kuwaiti law. The right to recourse on infringement of the competition law cannot be assigned or transferred to another person. However, if the person dies after initiation of the case then the successors or legal heirs shall be entitled to compensation. Awareness among the public is very crucial because the law gives freedom to anyone to inform the authorities about any of the prohibited agreement or practice according to the regulation of the law Thu, 19 Oct 2017 21:34:16 -0400 The rule of imprisonment of the debtor http://www.arazzaqlaw.com/the-rule-of-imprisonment-of-the-debtor http://www.arazzaqlaw.com/the-rule-of-imprisonment-of-the-debtor Under Kuwaiti law non payment of debt is not a crime and hence there is no prescribed mode of punishment under the Kuwaiti code. However, this does not mean that the debtor would be set free of all his liabilities towards the creditor. If the creditor chooses to pursue the matter he can seek extra judicial assistance and can imprison the debtor for a term not exceeding six months. But how a person interprets the procedure and applies it to his own situation would give it value because the court of law has relatively no role in this matter. The procedure The creditor should submit a written submission before the Expert department and if the head of the expert department decides to grant the plea the debtor would be imprisoned. The maximum term of imprisonment is six months. However, the term shall be determined based on the discretion of the officer and normally a period of one month imprisonment would only be awarded. If the debt is not paid fully during this initial term the debtor can be jailed any number of times until the period of six months is elapsed; unless he proves that he is financially incapable of repaying debt. On the other hand, irrespective of the completion of his term (6 months) in the prison the debtor would be asked to pay the debt without any deductions as he is sentenced to prison as an outcome of a less punitive and more due process oriented measure. The shortfall of the system Good regulatory practice necessitates the intervention of the court where the procedures would revolve around formal but precise rules.  Voluntary compliance, which is less wed to rules, stressing responsiveness and forbearance and preferring tools involving self-regulation, persuasion and negotiation may not always be effective in an issue like debt collection. However, under the present system the rights of both the debtor and the creditor are limited by certain restrictions, which are mentioned hereunder; The provision which is based on rule of natural justice forbids imprisonment if the debtor is not in a position to repay his debt The burden of proof is vested on the creditor who should prove that the debtor is financially sound or is willfully neglecting the repayment. In actual practice, imprisonment is more or less used as a test to confirm whether the debtor is financially sound or not. The debtor should be offered an unvarying system where he can enforce his rights, as well. The debtor should be given the right to be heard and the right to present his perspectives fully and completely before a competent judge. For instance, if the non payment is due to the reason that the debtor's assets or money is confiscated or blocked for a certain period of time he should be given a chance to repay it on an extended date. However, under the present system, more often, the debtor would at once be imprisoned if a complaint is lodged against him The imprisonment based solely on the decision of an officer, where it is set as a coercive measure than a disciplinary measure may not be always fair or reasonable. Favoritism, foul pay, misjudgment etc can also play its role. If the debtor is above the age of sixty five years or if he is the single guardian of children below the age of 15 or if he arranges a guarantor/guarantee he cannot be put in prison irrespective of whether he is capable of paying the debt or not. Unlike any other civil or criminal wrong, here old age is treated as criteria for punishment. But recent studies find that a change in the age composition of the workforce is a global phenomena and the number of business people or working class of 65 years and older is about twice that of those 40 to 49 years old. To conclude, I would suggest that, this sort of arrangement has many hitches as the notch of irrationality is attached to it. Each system has its own distinct advantages and disadvantages, and the choice between them should be pragmatic (what works?) rather than ideological. When the decision is made by the head of the expert department to imprison a person, based on the request of the creditor, the authority to decide on the subject is vested on a single person, with no judicial process or procedure. This system could be more finely tailored if the issue is settled through the court of law rather than the execution department, where it would be given a broader repertoire based on facts, evidences and circumstances of a case. The judgment based on submission/tallying of evidences would rather be prudent than leaving it open before an officer. In the turbulent corporate world it is important to anticipate, recognize, and understand the legal situation beforehand; hence I recommend that judicial intervention is mandatory. Thu, 19 Oct 2017 21:34:16 -0400 Kuwaiti law on Merger of Companies http://www.arazzaqlaw.com/kuwaiti-law-on-merger-of-companies http://www.arazzaqlaw.com/kuwaiti-law-on-merger-of-companies When two or more companies are combined together to achieve greater efficiencies of sale, productivity and profit it is termed as 'merger'. This is achieved through the elimination of replica of identity, structure, equipment, staff etc and the reallocation of capital assets to increase sales and profits in the enlarged company. Part VII of the Company law of Kuwait elaborates on how a merger is possible in Kuwait and it classifies merger as 'Acquisition' or 'Combination', as per the terms mentioned therein. Acquisition In acquisition, a company can buy another company with cash, stock or a combination of the two. Another possibility, which is common in smaller deals, is for one company to acquire all the assets of another company. The absorbed Company becomes merely a shell and will eventually liquidate. In other words, a company or more may merge into another company and so the legal personality of the absorbed company disappears and its assets and liabilities move to the acquirer company, which maintains its artificial personality. The procedures for merger by acquisition shall be as follows; The merged company shall issue a resolution confirming its liquidation. The assets of the merged company shall be evaluated in accordance to the provisions of the law and the resolution to this effect would be executed. A resolution for the increase of the share capital shall be made in accordance to the merged company's assets. The increased share capital shall be distributed among the shareholders in proportion to the allocation of shares. If three years elapse from the date of incorporation of the merging company the shares shall be circulated soon after the issuance of the shares. Combination By the term 'Combination' it would mean that two or more companies merge based on an agreement whereby the merger would be on equal terms that the legal  personality of both of them would disappear and their assets and liabilities would be transferred to a new company. The resolution of the merger shall be agreed by means of an agreement entered into by and amongst the parties desiring to merge in accordance to the provisions of the company policies and the Articles of Incorporation. The merger shall not be considered as final unless the approval in conformity with the structure of the newly formed company is obtained. For example, banks, financial institutions and investment companies require the approval of the Central Bank before the implementation of the resolution for the merger. Additionally, a resolution of the Ministry of Commerce & Industry shall also be issued to determine the method of evaluation of the merging company's assets, the procedure, conditions and terms of merger.   Merger by means of combination shall be achieved by means of the following procedures; Each of the merged companies shall issue a resolution about the liquidation. The new company shall be formed in accordance to the provisions of law. However, if the newly formed company is a joint stock company, the reports of experts concerning the proportion and allocation of shares shall be considered without the need to present the matter before the Incorporation Assembly. The shares shall be allocated to each merged company in accordance to its capital contribution in the newly formed company. Transparency of the merger Merger must be announced in two dailies, official gazette and shall be enrolled in the commercial register. The resolution of the merger shall not be implemented except after three months from the date of proclamation by enrollment in the commercial register and the creditors of the merged companies shall have the right to object the merger through a registered letter, properly delivered to the company. The merger shall be ceased unless the objection is abandoned by the creditor, a final judgment from the competent court is obtained or if the company pays the debt if it falls due or arranges a guarantee for fulfillment thereof if it is deferred; if no objection is filed within the stipulated time frame the merge shall take place and the newly formed company shall acquire all the rights and liabilities of the merged companies. Even if a company is on the verge of liquidation it can merge with another company and it is not necessary that the merger should be between two companies carrying out business of similar nature or constituted under the same legal frame work i.e., even a WLL company can merge with a Kuwait Share Holding Company. Merger & Competition laws Commercial law Number 68 of 1980 deals with illegal competition which does not allow illicit gain or unlawful gain. The Kuwaiti Law obligates the companies which aim to acquire assets or to establish mergers to promptly notify the body entrusted with the protection of competition. Hence, when the share reaches the rate that leads to the domination of the market it should be notified to the authorized body and the said body shall always strive to strike a balance between the advantages and disadvantages arising from the merger. Merger does not necessitate the need to change the partner's positions in the newly formed company and in this era of economic recession around the globe there is a great chance for financial institutions to merge, thereby enhancing their profits and competition. Thu, 19 Oct 2017 21:34:16 -0400 Levy of Interest – The Economic Rationale and Implications under Civil and commercial Laws of Kuwait http://www.arazzaqlaw.com/civil-and-commercial-law-kuwait http://www.arazzaqlaw.com/civil-and-commercial-law-kuwait The loan is a contract binding the lender to pay the borrower an amount of money or any other tangible thing, provided that a similar thing in kind, description or amount is returned. Interest can be defined as the payment of a certain amount of money for using the borrowed money for a specified time. Payment of interest is common among western countries and in countries which were under the colonial rule. Due to the influence of the capitalist system under the colonial rule and due to the impact of the interest-based institutions Kuwait also followed a similar system. This influence is apparent in the drafting of its Commercial laws which accepts that interest can be charged at simple rates. Sharia law prohibits payment of interest. The word "Riba", in Arabic language, literally means an "increment' or addition". In Islam the term "riba" has a special meaning. Riba is an unfair augmentation of money. If the money advanced as loan, which is paid in kind or to redress a financial crisis is asked to be returned along with a payment above the amount of loan, as a condition imposed by the lender or voluntarily by the borrower can be termed as "riba". Riba defined in this way is called in "Fiqh riba al-duyun" (debt usury).The Prophet in his 'hadith' warned that "riba" is more sinful than committing adultery over and over or again and again. The state of Kuwait has assigned a special place for the civil law system and is properly drafted to avoid any discrepancies. The civil law is considered as the prevailing law of the country without prejudice to the fact that in commercial issues the commercial law would only be applicable without any interference from the civil law. Kuwait gives predominance to investment legislations with the aim of regularization of the foreign investment in the country and the state is entrusted with the authority to supervise and control while facilitating and encouraging the investment activity. It is mainly due to serious economic dependence on the Western world, during the 19th and 20th century, the system of payment of interest is introduced to an Islamic country like Kuwait.  The commercial law of Kuwait allows payment of interest while Civil law prohibits it. The following paragraphs give an explanation on how this is possible without nullifying the contradictory provisions. The civil law of Kuwait forbids the payment of interest. This is based on the principle that interest on consumption loans is definitely "usury", but that on loans taken to finance trade or development is not. Article 547 clearly says that lending shall be without interest and any agreement to the contrary shall be invalid without infringement of the loan contract itself and any benefit stipulated in this respect shall be treated as interest. Invalidating the clause demanding interest in a civil contract is mandatory as it would otherwise adversely affect the organizational structure of the country itself and therefore the government is entrusted with the right to voluntarily take up such issues. The commercial Code of Kuwait indicates that the creditor has the right to charge an interest on commercial loans, unless otherwise agreed and if the rate is not mentioned in the contract the applicable rate would be 7%, subject to restrictions. The Commercial code makes clear cut differentiation on commercial and consumption loans and classify that a loan shall be treated as commercial loan if its purpose is to spend the borrowed amount for commercial purpose, which can be proved based on the agreement entered into at the time of payment or based on how the borrowed money is spent. Again, the borrower should be a merchant or a person doing business of commercial nature. Commercial law is applicable not only for loan but for late payment, as well. It can be in any form, whether paid as commission, service charge or supply of any kind. If the debtor disagrees to repay the money and if he is postponing the payment without a valid reason then the court can impose a 'complimentary' compensation for non payment of loan on the agreed date along with the agreed interest i.e., if there is delay in repayment, the creditor is entitled to a compensation for delay, a legal interest or agreed upon interest and it is not necessary that he should prove that the delay incurred detriment to him. However, it is mandatory that when there is delay in payment the lender should send an appropriate notice stating that there is delay in payment. On failure to furnish such a notice his negligence to do so would be treated as acceptance of late payment. There is something called "Darura" (necessity) rule in Shariah law which restricts payment of interest if the debtor is in poor economic situation. However, the civil law of Kuwait does not make any such distinctions and disallows payment of interest for all kinds of consumption loans. However, the Commercial Code of Kuwait has some influence of the "Darura" rule and gives a much more elaborate explanation on this. It clearly stipulates that if the debtor is in dire need of money or if he is ignorant or is not in a position to assess his risk, the lender should not levy any kind of interest for such transactions. If this is not complied with then there are provisions for imprisonment and/or penalty of Thousand Rupees (Seventy Five Dinars - calculated as per the old money calculation system). The law also specifies that even in the promissory note the interest should be stipulated or else when the payment accrues an interest as per the then prevailing rate would become payable. The Commercial law is silent when it comes to future sales but civil law prohibits it therefore it is a general practice not to impose interest on future sales. Conversely, I hold the view that if the law is silent then it should be interpreted affirmatively i.e., right to demand interest for future payments should be conferred. Interest rate more or less equalizes the disparity in the inflationary rates. Therefore, under sky rocketing inflationary conditions, interest payments may be considered as compensation for the loss in real value of money, and not 'riba'. Moreover, it is to be noted that the economic system prevailing in the county does not support finance on loss and profit sharing basis and therefore it is indispensable for the business people to seek out finance on interest basis. UPDATES The Kuwait Income Tax Decree No 3 of 1955 set up the structure for levying tax on all foreign companies carrying trade or business in Kuwait and the Kuwait Income Tax decree No. 23 of 1961 levy tax on foreign companies operating in the offshore neutral Zone. Apart from this there are Ministerial orders in the form of resolutions and there are unwritten practices and precedents set by the tax department which administers the law. The Kuwait National Assembly passed a law on 26 December 2007 that amends several provisions of Income Tax Decree No. 3 of 1955 (Decree). The Kuwait Government has implemented the new tax law which substantially cuts taxes on foreign companies working within the territory. The new tax legislation would be available to the public only after its publication in the official gazette and is expected to be released by August 2008. Per the amendment foreign companies working within the territory shall only pay a flat rate of 15% of the profit generated within the territory rather than a variable tax which reached up to 55%. Moreover, profit earned by foreign companies from trading in Kuwaiti shares, whether directly or through investment portfolios or funds, is not to be taxed, and intends to keep out from taxation the profits of Kuwaiti agents earned on trading foreign goods for their own account. Neither the old tax law nor the new amendment subjects foreign individuals to income taxes. Only foreign body corporate with an independent juristic personality is subject to taxation. The tax is levied on all foreign companies doing business in the State of Kuwait, except those wholly-owned by GCC nationals. However, GCC companies with foreign shareholding shall be taxable in accordance with the foreign share. In the Kuwaiti companies where there are non-Kuwaiti shares, whether such share is contributed by a partner or by virtue of ownership rights, it will not be taxable, unless such rights are owned by a foreign partner. It is worth mentioning that revenues of Kuwaiti agents are not taxable as long as these revenues resulted from selling for their own interest. Apart from a blanket tax rate structure, the new law also gives an elaborate explanation about the taxable income or in other words it explains what income is to be taxed. Profits generated from any of the following activities are subject to the tax: Profits realized from any contract that is partially or fully executed in the State of Kuwait. Revenue from the sale of leasing, or from conceding a franchise to use or utilize any trademark, patent or copyright. Commissions from commercial representation or intermediary agreements. Commercial or industrial activities. Profits realized from sale of assets. General trading activities in property or goods, or the rights accrued therein, and the establishment of a Permanent office in Kuwait to carry out such activities. Property lease. Service provision. Expenses associated with the income to be taxed may be deducted as follows: Wages, salaries and end of service indemnity Other taxes and fees Depreciation, subject to the specifications of the implementing regulations Donations to Kuwaiti charities, subject to limitations specified in the implementing regulations. Head office expenses in accordance with the specifications of the implementing regulations. The law also inflicts a limit on a company's ability to carry forward losses and the maximum limit is set as three years. It is to be noted that under the previous tax law, companies were able to carry losses forward for an unlimited period of time. Thu, 19 Oct 2017 21:34:16 -0400 New Laws & Updates http://www.arazzaqlaw.com/kuwaiti-laws-update http://www.arazzaqlaw.com/kuwaiti-laws-update Welcome to the News and Publications section. Thu, 19 Oct 2017 21:34:16 -0400 Announcement http://www.arazzaqlaw.com/announcement http://www.arazzaqlaw.com/announcement ABDULRAZZAQ ABDULLAH & PARTNERS LAW FIRM signed Legal Service Agreement and announced to provide a broad-spectrum of legal services to the KOREAN COMMUNITY, Kuwait. The Legal Service Agreement was signed on August 18, 2013 at the ARALF office, by the Chairman of the Korean Community in Kuwait, Mr. Hyun Sup Shim and Mr. Abdulrazzaq Abdullah, Managing Director of ARALF Law firm. Mr. Chung Seop - Director Public Relation, Mr. Lee, Mr. Choon Seop - Director Local Business, Mr. Kang, Mr. Dong Jin - Director Youth Promotion are the other members of the Korean Community, Kuwait who attended the event. The lawyers and legal consultants of the ARALF law firm were also present. Mr. Hyun Sup Shim commented during the meeting that due to the cultural differences and language barrier the Korean citizens living or doing business in Kuwait face a lot of legal challenges and that is the reason why they chose a local law firm to represent their community and its members. "It gives a reassurance to all the Koreans in Kuwait", he said. Mr. Abdulrazzaq emphasized that, ignorance of local laws and regulations is the reason why the foreign nationals are susceptible to exploitation in a foreign country. "Lack of proper legal support is estimated to result in significant loss while doing business in Kuwait", he added. Under the terms of the agreement, ARALF agreed to provide legal services to the Korean nationals and companies in Kuwait. This partnership demonstrates the broad applicability of the legal platform and the ability of the ARALF team to render wide range of legal services. About Korean Community, Kuwait Korean Community, Kuwait is an association of Korean nationals residing in Kuwait. It focuses on providing local support to the Korean citizens living in Kuwait. It is well organized and is headed by eminent and experienced Korean nationals. About ARALF Law Firm, ARALF is an established law firm in Kuwait serving clients for the last 41 years. ARALF assists in all sorts of commercial, civil and criminal proceedings, before all levels of Kuwaiti Courts. Thu, 19 Oct 2017 21:34:16 -0400 Is it permissible to dismiss the worker because of a strike? http://www.arazzaqlaw.com/is-it-permissible-to-dismiss-the-worker-because-of-a-strike http://www.arazzaqlaw.com/is-it-permissible-to-dismiss-the-worker-because-of-a-strike Strike action, also called labor strike or simply strike, is a work stoppage caused by the mass refusal of employees to work. A strike usually takes place in response to employee grievances. Strike will usually be conducted by the employees, in an orderly manner and for a specific intent to put pressure on employers or authority to enforce their demands or find solutions to their existing disputes. It is used as a method to defend the interests and rights of workers. The trade unions will call for a strike in an organized manner, to meet the interests of the employees if they have not been met . Industrial action is used where employees want new or better conditions at the workplace and wish to use strike to create new terms and conditions of their employment.. Stayaways, strikes, work stoppages, go-slows, work-to-rule, and union bans on overtime, and lock-outs, are all forms of industrial action. Industrial action can be protected (legal) or unprotected. It is obligatory that the trade union should notice the employer in advance before embarking on the strike. As per Kuwait law it is not permissible to resort to strike directly without notifying the employer, though not followed strictly. However, the procedures and obligations of the trade union who call for a strike are so complex that it makes the strike impossible in reality. Most importantly, the safety of places and means of work should be ensured. There should not be a ban or prohibition on essential services and facilities, thought all facilities will not come under the category of 'essential facility'. There are several methods of the strike. 1. 'Sit-down Strike' where workers remain at the workplace and refuse to do work. 2. 'The strike action as required by law' only (Work-to-Rule) where workers perform their work according to the law in a way that will not hinder the productivity. The employees may only refuse to work overtime or do a task which requires more diligence and effort. 3. A 'sympathy strike' is a strike where a group of workers or employees belonging to the same industry but employed in the other companies sympathise with the employees holding the strike and support it. 4. A hunger strike occurs when employee(s) voluntarily refrain from consuming food. This is a common strike in prison . It is during the time of Industrial revolution strike got its prominence. strike actions were quickly made illegal due to the influence and political power of factory owners. Most western countries partially legalized striking in the late 19th or early 20th centuries. However, Marxism - Leninism considered banning the strike as illegal since these systems claim to represent the working class. Though some legislation and international conventions considered the strike a legitimate means to defend the rights of workers, the Kuwaiti legislature remains silent though strike is not prohibited by the law. It comes under the provisions of Article 98 of the Law No. (6 ) of 2010 concerning work in the the private sector. The law says that the right to form unions, the right to gather together for the benefit of the workers is in accordance with the provisions of this law. The law is applicable to workers in the private sector. These provisions are not in conflict with the provisions for the employees under the oil or government sectors. Article 99 recommends that all Kuwaiti workers has the right to join the trade unions, protect the interests and working conditions of the employees to improve their financial and social status. The wages of a dismissed worker who is absent from work due to his participation in the strike is calculated differently in different legislations. In some legislation there is no pay and the employer is entitled to lay off the worker. In the Kuwaiti legislation the right of the employer to lay off worker because of the strike was provided earlier but Article 42 of the Labor Law states that if the employee refrain from work without an acceptable excuse for a period of seven consecutive days or twenty days scattered through the year that employee shall be considered to have resigned from his employment. In Article (132) of the Act it is prohibited to stop working completely or partially and that absence from work is not permissible. If it exceeds seven consecutive days or twenty days during the year the employee may be terminated from his service. Ironically, Article 46 of the Labor Code states that the employer may not end the service of the worker without justification or because of his trade union relation or because of their demands before the trade union and the employees enjoy their legitimate rights in accordance with the provisions of the law. Therefore, based on this provision it can be argued that the right to strike is guaranteed to workers as per Kuwaiti law when it is intended to claim their legitimate rights according to the law and cannot be dismissed from work for this reason. It can be concluded that the Kuwaiti legislature does not prohibit the strike when it is conducted peacefully and which takes into account the laws and regulations of the country. Though not expressly stated, the freedom of expression is also provided in the legislation. Thu, 19 Oct 2017 21:34:16 -0400 Questionnaire on the Law of Leasing http://www.arazzaqlaw.com/questionnaire-on-the-law-of-leasing http://www.arazzaqlaw.com/questionnaire-on-the-law-of-leasing Question: What are the most pressing issues in leasing commercial real estate today? Answer: In commercial real estate today, if the lease is associated with a promise of sale there will normally be an intervention of a third party contrary to the traditional seller/landlord and buyer/tenant relationship, and this third party usually be financing the lease. In such cases a financial institution will be assisting the tenant by arranging funds for the purchase of the property and those who contract with such financial institution will agree to repay the amount after a specific period of time or will pay as installments payable every month for a period agreed in the contract. At the end of this set time limit the tenant can buy the property. Therefore there arises a tripartite relationship of buyer and seller (financier) who is leasing the property to the tenant. This is different from the normal lease practices and the rent paid by the tenant will be higher than those in normal lease. In such situations, the tenant will have to bear the financial risks. The landlord will have the right of restitution of the property if the tenant has become bankrupt or proved to have committed a crime of fraud/dishonesty or if he fails to pay and settle the entire amount as per the contract. The land lord in such a situation is entitled to sue the tenant and can expel him. However, the major concern is that though the financier’s role in this structure is limited (as it only finances the deal) it often becomes harsh on financial institutions to recover the money from the debtor, especially during an economic crisis. Another issue is the requirement of a deposit before entering into a lease contract. Mostly, the landlords charge a hefty amount just for allowing the tenant to occupy the premises. This can range from few hundred to several thousands. Due to the concern of repayment of huge loans from the banks and the skyrocketing rent big commercial areas remain vacant. This will affect Kuwait’s economy as a whole. It is to be noted that this peculiar system is not allowed under Egyptian law. The landlord cannot vacate the tenant without obtaining a judgment in his favor, and if he resorted to force, threat or deception, he will be exposed to legal repercussions. The tenant can leave the leased premises without having to resort to the judiciary but it should be approved by the landlord or by the authorities and in the absence of the consent of the landlord tenant’s eviction will not terminate the lease agreement entitling the landlord to claim rent for remaining months as per the duration of the contract. However, if the contract has provisions which says that it can be terminated by any of the contracting parties, and if there are grounds to terminate the contract by the tenant he can have recourse to the courts to request termination of the contract and its dissolution. But it must be noted that the landlord retains the right for compensation for the loss he suffered due to termination of the contract or for consequential damage if it is against the terms of the contract. Consequently, if the tenant immediately after the evacuation leased the premises to another tenant, the land lord has the right to seek from the first tenant the rent for the remaining period of the contract. Q: Explain the idea of subleasing. Who are the parties involved, what function does each play? A: A lease or a rental agreement, as is commonly used is a contractual arrangement demanding a certain payment to the landlord (as rent) for acquiring possession of a property in his ownership, for a certain period of time. Usually the term ‘rental agreement’ is used to describe a lease where tangible property is involved. The possession of a license to use a computer program is an example of a lease where intangible property is involved. To sublet (sublease) is to lease to another person a house or apartment that is already in the possession of the tenant. In legal terms, the landlord is the lessor, the tenant is the lessee, and the subtenant is the sub lessee. Building, common areas, or systems may be subject to leasing. Even for the tenants who have the approval from the landlord to sublet, should comply with certain procedures. Q: What are the advantages associated with subleasing? A: As per Article 34 of the commercial law, a store or a shop of the merchant will include a set of elements tangible and intangible depending on the business he undertakes; this will include tangible things like goods, furniture, industrial machinery and intangible things of value like its goodwill, reputation, customer feedback, trademarks, trade data, patents, licenses, designs etc., Therefore, the occupancy of the place of lease or the right of lease is a key element of any business. The place occupied for the business is of utmost importance for the customers and therefore in the commercial transactions the location of business has importance. The growing commercial requirements demand an attractive business location and in such cases subletting can be considered as a viable option for finding a proper place of business. Q: How popular is this phenomenon in Kuwait and in which sectors? A: This phenomenon is common in all sectors. Q: What is the predominant nature of the sublease? A: Both long term and short term leasing is common in Kuwait. Q: What does the law say about subleasing? A: The Real Estate Law of Kuwait regulates commercial and residential real property transactions, and landlord-tenant relationships. Law No 35 for the year 1978 deals with the real estate in Kuwait. However, agricultural plots are excluded. Undoubtedly, BOT will not work for residential projects, where the land lord usually expect either a freehold or long term return from his units. The law clearly states that, the period stipulated in the contract must be respected and followed by both parties in the contract i.e., the land lord shall not be entitled to evict the tenant and the tenant cannot vacate the premises, before the end of the contract term. Q: How is the law interpreted and enforced in Kuwait? A: The law clearly states that, the period stipulated in the contract must be respected and followed by both parties in the contract i.e., the land lord shall not be entitled to evict the tenant and the tenant cannot vacate the premises, before the end of the contract term. The law also says that the rent cannot be increased for a period of five years, from the date of signing the contract. The landlord has the liberty to deny the sub lease or can impose certain conditions for the lease. Only with the landlord’s written/oral consent, the tenant can transfer the tenancy under a tenancy agreement to another person, or sub-let the premises (or part) to another person. However, there is no provision under the Kuwaiti law which prevents the land lord from unreasonably withholding his consent when the tenant asks to transfer the lease to another tenant or when he asks to sub-let a portion of the premises which he occupies. The landlord can forcefully (by police force) evict the tenant if the tenant violates the terms of the lease agreement. Q: Does the tenant ultimately, have the right to sublease? A: Yes he has the right to sublease subject to the consent of the landlord. The law makers give the landlord the right to terminate the lease agreement in the event of sublease of the leased premises. However, he cannot claim that he is not informed of the sub tenancy, if the circumstantial evidence does not support his claim. It should be noted that if landlord authorized the tenant to sublease the property it is a direct relationship between landlord and the subtenant. Q: What are the procedures involved in subleasing a space? Can you give us a step by step run down of the process? A: The tenant needs to obtain a written (preferably) consent from the land lord and should enter into a proper sublease agreement with the concerned party. Q: What problems do the tenants face in the given framework? A: Most lease contracts specify the duration of the lease agreement as one year or five years or specify that it is “automatically renewed”. However, the phrases used should be clearly checked and verified before signing the contract as the distinction must be made between the words “automatically renewed for another” or “other periods” or whether the word “automatically” is only been used. If the contract provides that it is renewed automatically for a similar period, it is constantly renewed each time for the same term unless a notice of non- renewal is delivered by the concerned party within the specified time frame in the contract. If the contract provides that it is renewed automatically, it will be renewed and if the tenant desires to vacate the leased premises after the end of the term of the contract but did not notify the owner to terminate the contract he should pay the rent for the remaining period also as the contract got automatically renewed. Q: What proposed changes in law and practice would remedy this? A: It is a common practice in Kuwait that the landlord will charge an amount as compensation for giving his approval to sublease the property. I am of the opinion that the landlord should not charge the tenant exorbitantly for giving his consent to sublease his property. Another problem faced by the tenant is that the land lord can prolong the matter for a long period without giving his consent. If the landlord does not meet the required deadlines to respond to the tenant’s sublet request, the tenant should be given the option to proceed with the sublet. If the landlord fails to send such a response within the predefined time, it should be deemed as consent or approval of the sublet request. The Egyptian law is not similar to Kuwaiti law in this respect as it is more liberal to the tenant. As per Article 594(2) of the civil law of Egypt the court is given the discretion to decide on such issues based on the principles of good faith. In Egyptian law the court can order the landlord to retain the lease agreement and not to cancel the lease contract if setting up of a workplace or extension/modifications of the shop is necessary for the smooth functioning of the tenant’s business, even if it makes the sub-tenancy inevitable for the tenant. This rule is applicable even if the prior consent for sublease from the land lord is not obtained by the tenant. However, it is subject to the condition that proper guarantee to compensate any loss will be given to the landlord, in this effect. Therefore, in Egyptian law the owner of the leased property can give it to another without the landlord’s consent if there is proper justification for doing so as is mentioned above. The relation between tenant and landlord as prescribed in the common provisions of Kuwait’s civil law No. 37 of 1978 is in contradiction to the above mentioned provisions of the Egyptian law. The law makers failed to make any special mention in the law about the rights of the tenant to sublease. Article 14 of the law merely mentions that the tenant cannot sublease the leased property or any part thereof without the consent of the landlord in writing and the land lord has the right to ask the court to vacate the tenant if he has subleased the property without his consent. Further, the law provides that the right to sublease the property by the tenant is subject to the consent of the land lord and he can express his consent either expressly or impliedly i.e., if the land lord accepts the rent from the tenant that means he accepted the transfer, even if there is no written confirmation from the land lord. However, in effect, if there is no express consent from the landlord it will create further problems for the tenant as it will be difficult for him to prove it. Another area of concern is that the land lord in many cases will agree to give his consent only after obtainment of a hefty amount as compensation or with a steady increase in the rent amount thereby putting the tenant in a difficult financial situation, which affects both his business and future prospects. Therefore, I am of the opinion that it is important to systematize the relationship between the landlord and the tenant in order to balance the relationship and define the rights/obligations of the subtenant-landlord relationship. Law makers should make some efforts to set a ceiling for the rent which the land lord can impose on the tenant or should amend the law by adapting the provisions of the Egyptian law so that the tenants can approach the court to transfer the lease agreement or to sell his shop to another tenant. Q: How does Kuwaiti law compare with that of other Gulf or Arab countries in this regard? A: The new Law No. 14 of 2008 formulates and defines the organization and the relationship between the lessor and the lessee in the Emirate of Ras Al Khaimah. This law applies to the provisions of the law on the premises leased for residential or other purposes but excludes agricultural land and such facilities. The law also permits a temporary lease by public authority in the free zones, ports and other public facilities in addition to the land space. Moreover, the law provides protection to tenants for a three year period or for a period agreed upon in the lease contract, whichever is longer. Article 3 of the law explicitly states that the law does not entitle the landlord to evacuate the rented premises except due to specific reasons, that is if the tenant fails to pay rent in accordance with the provisions of this law within 15 days from the date assigned for payment of rent or if the tenant leased or sublet his premises without the express written permission of the lessor or if used or allowed to use it in a manner inconsistent with the terms of the lease accepted as per public order and morality or if it is detrimental to the safety of the building. If the lessor demolishes the place to rebuild it more elaborately and if the duration of the lease per the lease contract has ended but there is an urgent need to occupy the place by the tenant himself or one of his legal heirs, the judgment of eviction cannot be implemented before the lapse of a deadline set by the court (this is usually a minimum two months from the date of announcement of the verdict) and the tenant has the right to claim compensation if it is proved that he is wrongly evacuated. However, the law requires that the eviction should be as per the date agreed upon in the lease contract and the lessor has to obtain prior approvals for the demolition and construction of the building from the concerned authorities, including a building permit, in order to claim compensation for eviction. Article 4 of Law No. 14 of 2008 confirms that the rent can be increased in a fair manner but only after the expiration of an existing lease agreement Q: Does rent ceiling come into play at any point? A: There is no rent ceiling in Kuwait. However, the law provides that the rent cannot be increased for a period of five years from the date of entering into a lease agreement, thereby giving protection to the tenants. Q: What is the status of illegal sublets in Kuwait? Is it a growing concern? Under what circumstances are they currently found? A: Yes. Illegal sublets are a growing concern. They have no legal protection and are under constant threat of eviction. Illegal subletting is mainly found in apartment leasing. Q: What is the future of subleasing and real estate in general? A: The implementation of new laws to cover the lacunae in this sector is highly recommended and the economy will flourish only if there is equal protection for all before the law. Thu, 19 Oct 2017 21:34:16 -0400 Law No. 106 of 2013 Regarding the Combating of Money Laundering and Financing of Terrorism http://www.arazzaqlaw.com/law-no-106-of-2013-regarding-the-combating-of-money-laundering-and-financing-of-terrorism http://www.arazzaqlaw.com/law-no-106-of-2013-regarding-the-combating-of-money-laundering-and-financing-of-terrorism The Kuwait government has taken steps to address the challenges which posed a threat to the economy by passing Law No. 106 of 2013. The law is promulgated with an intention to combat money Laundering and financial terrorism. The New Law supersedes the previous Law No. 35 of 2002 and establishes new and improved governing principles. As per new law terrorist financing is termed as criminal act which comes under Article 3. The law further elaborates that, "a person who can be said to have committed a terrorist financing crime is any person who has directly or indirectly, willingly and illicitly collected funds with the intention to use it for committing a terrorist act". Also, Article 22 enables the public prosecutor to freeze/confiscate funds or financial instruments, if there is sufficient evidence to suggest that the funds were obtained or used with an intention to finance terrorism. Thu, 19 Oct 2017 21:34:16 -0400 Real Estate Law and the Growing Land Price http://www.arazzaqlaw.com/real-estate-law-and-the-growing-land-price http://www.arazzaqlaw.com/real-estate-law-and-the-growing-land-price The provisions of Law No. 50 of 1994 concerning the regulation for the use of land space and the explanatory note of the law No. 8 of 2008 explains in detail the provisions regarding the use of land in Kuwait. While analyzing the local real estate performance there is major economic development related to the activity of the real estate market and in the respective governmental regulations. However, the government has failed to keep pace with the growing needs. The facilities should commensurate with the increasing demands or else it would not be helpful for the citizens. Moreover, the laws are more relaxed which leads to delay in reclamation of land space which is allotted to address the requirements of the citizens. This in turn resulted in an increased demand for 'Vouchers' for building private residence. In the private sector the needs of citizens are not met due to the unreasonable delay. This also contributed to the increase in price steadily and rapidly. Though there is directive from the legislature that the land should not be kept idle for a long period of time, enabling the owners to speculate for the highest possible price the eligible middle class are suffering as the rising housing costs has already became unaffordable for them. Understanding the above said problems the legislature in fact intervened to put an end to this problem of the ‘poor getting poorer and the rich getting richer’. However, due to the greed of some private investors and big companies the ordinary citizen lost their hope in getting a private residence or a respectable home so as to preserve his dignity and to protect his family. In order to overcome the lacunae of law No. 50 of 1994 concerning the regulation of land-use space, the Law No. 8 of 2008 was introduced under which the imposition of an annual fee of ten dinars (KWD 10) on every square meter of housing lot of a person who owned land in excess of five thousand square meters. This amendment was followed by the issuance of Law No. 9 of 2008 amending some provisions of the Commercial Companies Law No. 15 of 1960, which prevented all sole proprietorships from buying, selling, placing lien on, and issuing letters of assignment to third parties, and prevented Islamic banks from financing the residential housing. However, it is to be noted that even after more than four years after the introduction of this law the aforementioned problems as still imminent in an exacerbated and intractable manner. With growing number of self seeking opportunists ordinary citizens still suffer under the hammer of the government, the greedy investors and land dealers. The main reason for the sustainability of this problem is due to the inaction and failure on the part of the government. The flow of resources and wealth in the market is managed without giving any consideration to the middle class citizens. It is worth mentioning that law No. 8 of 2008 in its Article IV provides that the State (represented by its ‘General Organization for Housing Welfare Authority for Land Reclamation’) is required to provide one hundred thousand housing approvals within three years, but unfortunately during the past three years this has not been provided. At this juncture we have to assess whether the application of Law No. 8 and 9 for the year 2008 has brought forth any positive results for the society as a whole. Sadly we have to confess that those laws did not achieve the purpose meant by the legislators. None of those laws could achieve the desired benefits or could put an end to the cries of the ordinary citizens During the last many years, the Kuwait Finance House one of the largest dealers in real estate in general and residential real estate in particular, was vigorously addressing the needs of a large tier of clients looking for private housings. It is not permissible to comment on court rulings, but that does not prevent us from saying that the above mentioned dealings confirm that the legislative structure of these laws, has major loopholes as the law clearly states about the prohibition in dealing with residential houses or in private housing. If one company is allowed to escape the clutches of law and avoid payment of the prescribed fine or to comply with the restrictions of the law then there is the chance that others will also be tempted to follow its foot steps. This will in turn affect the principle of equality and equal opportunities as prescribed in the constitution. Additionally, it will create a suspicion of unconstitutionality of the content of the law to restrict the right of ownership. It will also lead to a confusion whether the rights against violation as per the provisions of Article 18 of the Constitution is also affected. Because the said provision confirms explicitly that private property is protected and the citizen is not prevented from disposing of his property except as per the provisions of law for the benefit of public at large. In such circumstances law sets forth provisions for fair compensation on any such loss. A company recently secured a judgment in its favor even though there was violation of Laws No. 8 and 9 of 2008 and Law No. 30 of 2003. If the principle of equality and equal opportunities are even questioned and if the law itself cannot be enforced then only possible option is the amendment of provisions of Law No. 8 and 9 for the year 2008. Thu, 19 Oct 2017 21:34:16 -0400 Rules of Corporate Governance http://www.arazzaqlaw.com/rules-of-corporate-governance http://www.arazzaqlaw.com/rules-of-corporate-governance 1.Empower the Board 2 Establish Clear Roles and Responsibilities 3.Recruit qualified candidates 4.Integrity in Financial reporting 5.Measures for risk management and internal auditing. 6.Implement Code of Conduct and uphold high ethical standards 7.Effective Disclosure strategies 8.Protect rights of the minority Shareholders 9.Encourage development and growth 10.Awareness of Social responsibility. Thu, 19 Oct 2017 21:34:16 -0400 The need to overcome the developmental hurdles of the Law of the Capital Market Authority No. 7 of 2010 http://www.arazzaqlaw.com/the-need-to-overcome-the-developmental-hurdles-of-the-law-of-the-capital-market-authority-no-7-of-201 http://www.arazzaqlaw.com/the-need-to-overcome-the-developmental-hurdles-of-the-law-of-the-capital-market-authority-no-7-of-201 The Law of the Capital Market Authority No. 7 of 2010 aims at organizing the activities of the securities market in a fair, viable and transparent manner, educating the public about the activities of the securities, the benefits, risks and undertakings related to the investment of the securities. The main difference between Kuwait Stock Exchange and Capital Markets Authority Law is that there was no special prosecution prescribed in the provisions of the Kuwait Stock Exchange while in the new law there is prosecution for violations. Surely, a policy of total disclosure ensures justice and transparency thereby preventing conflict of interest and exploitation of confidential information. Thus abidance of the local laws and regulations of the country is the paramount aim. Understanding its responsibility towards the national economy the Capital Market Authority specifies in its Law the commitment of investment funds operating in securities market to adjust their positions so as not to have more than 10% of its securities from a single source and not to invest more than 10% of it’s investment in a single source. However, Article 161 of the bylaws state that the investment portfolios authorized by law number 31/1990 shall be regarded as authorized under provisions of this law and its bylaws but it should reposition itself in line with provisions of the present law and its bylaws within six months of publishing the bylaws. This has necessitated the existing investment funds to adjust their positions within a maximum period of (6) six months from the date of publication of the related regulations. This led to a heated debate between lawyers about the legality of extending this deadline for an additional six months. Some hold the view that the decision to extend the deadline would be in conflict with the provisions of Article 161 of the Code of the Capital Market Authority. They point out that the provision is clear and once the legislature granted a time limit it may not be extended unless it is through another piece of legislation as there is no law which gives anyone the right to extent the prescribed time limit. Therefore, the only way out – according to this view - is to amend Article161. Others consider that it is valid to extent the time limit and justify the validity of the extension. In their opinion the provisions of Article 161 gives room for extension of the time limit. They argue that the law itself calls for adjustment of the investment positions according to its provisions and therefore its implementing regulations should have the authority to extend the deadline and without the need to amend the law altogether. In other words the implementation is vested with the ‘powers of execution’ and therefore the deadline can be extended. I am of the opinion that both the viewpoints has its own merits and demerits, but I tend to favor the second opinion i.e., availing the possibility of extending the deadline for investment funds taking into consideration the market conditions and the practicality of the implementation. The inadequacy of the time limit prescribed by Article 161 of the law of the Capital Market Authority No. 2010/72, is undisputable. In such a situation, the regulations should complement the law and its scope. Detailed improvements in the procedures are necessary to put the law into practice and then only proper law enforcement would be made possible. The regulatory action is the prerogative of the Board of Commissioners and particularly it hauled certain regulatory decisions on the Law of the Capital Market Authority. The resolution by itself does not carry any abuse or infringement of the law, but is based on how the Board of Commissioners execute the powers granted to them, including the issuance of instructions necessary to organize work according to present economic conditions and market requirements. If that is done properly the new capital markets authority law will ensure the stability of the national economy especially at a time when the economy is sluggish. According to a detailed 2004 assessment of securities supervision in Kuwait by the International Monetary Fund (IMF) conducted in the context of the Financial Sector Assessment Program (FSAP) in the area of issuer regulation, principles relevant to corporate governance have not been fully addressed and there is need to strengthen minority shareholders’ protection. Moreover, there should be a panel of qualified auditors to ensure the quality of the auditing, particularly in the listed companies. The proper implementation of the Law of Capital Markets Authority could help to improve matters in the commercial sector, where there is no sufficient awareness and understanding of current standards of disclosure, governance, the liability of the Board of Directors, and the role of auditors. The Kuwaiti securities market could be more effectively regulated by the Capital Markets Authority which would provide a more comprehensive legal framework for the country. A distinct, single, and independent regulatory body for the entire capital market in the country which can effectively render risk control/management over the entire funds would be a welcome move. The laws and regulations of the country would be effectively implemented if the powers and independence of the Kuwait Capital Markets Authority is properly executed. This will ensure the protection of minority shareholders and will force the listed companies to implement principles of corporate governance, adhering to the principles of law. Thu, 19 Oct 2017 21:34:16 -0400 There has been a significant increase in interest in Corporate Social Responsibility http://www.arazzaqlaw.com/there-has-been-a-significant-increase-in-interest-in-corporate-social-responsibility http://www.arazzaqlaw.com/there-has-been-a-significant-increase-in-interest-in-corporate-social-responsibility (CSR) in recent years and it is now regarded to be at its most prevalent representing an important topic for research. Many scholars are of the view that CSR is generally related to legal and social norms where few disagree calling it an image building tool. On the other hand, there is speculation if it is an action beyond legal sanctions - sometimes called "voluntarism" - ought to qualify as socially responsible action. To understand and analyze the concept of CSR, three words are to be carefully interpreted. These are, ‘corporate’, ‘social’, and ‘responsible’. To elaborate it, CSR refers to the obligations corporations have towards society part of which they exist, Moreover the role of CSR lies beyond these boundaries. CSR is comprehended differently by different people. CSR is no new concept that happened to boom after the growth of industrialization.CSR was a concept that existed years ago when philosophers in the pre-Christian era had publicly proclaimed to follow safe, ethical and moral business practices and to make charity. The idea of helping the poor and disadvantaged can be cited in much ancient literature and backed my many religions across the globe. CSR is a concept which formed a part of religious preaching. For example, Muslims followed the tradition of saving parts of one’s money income to give the poor and the disadvantaged, which is popularly known as “Zakaat”. The Sikhs followed the concept of “Daashaant” like the Hindus followed “Dharmada”. Recent history narrates that there was a large scale boycott of consumers who refused to purchase the slave harvested goods back in the 1790s. Though the word CSR was not explicitly used, it was implicitly followed by the morality that stirred every action of people. The term came to popular use later towards the 1970s and 1990s and institutions and people fully recognized and supported it. In 1977 less than half of the Fortune 500 firms explicitly specified Corporate Social Responsibility in their annual reports. In the late 1990s, almost 90 percent Fortune 500 firms adopted CSR as an essential target in their organizational goals and this accelerated their CSR activities in annual reports (Boli and Hartsuiker, 2001). As Goyder puts it, “Industry in the 20th century can no longer be regarded as a private arrangement for enriching shareholders. It has become a joint enterprise in which workers, management, consumers, the locality, govt. and trade union officials all play a part. If the system which we know by the name private enterprise is to continue, some way must be found to embrace many interests whom we go to make up industry in a common purpose.” Philip Kotler and Nancy Lee (2005) define CSR as “a commitment to improve community well being through discretionary business practices and contributions of corporate resources” According to Bowen, ―CSR refers to the obligations of businessmen to consistently follow and abide those policies to make decisions or to adopt those relations which are in accordance to terms of the objectives and values of our society. The operational view which reflects an element of commitment in the form of corporate actions and policies of CSR is revealed in a firm‘s social performance. This can be evaluated by a firm’s management of interacting relationship and its impact over the society with the CSR policies and actions. There are always two sides to a coin and this is the same case for the concept of CSR. As there are people who praise it has not been deprived of it fair share of critics. American economist Milton Friedman published an article in the New York Times Sunday Magazine entitled ―The Social Responsibility of Business is to increase profitswhich briefs that corporate entities’ ultimate aim to increase their profits is a bigger priority than to account for any other social, economical and environmental concerns. Yet, CSR has the ability to add positive value and brand equity to a corporation by enabling it to demonstrate its potential as a ―good corporate citizen which is very much essential in increasing the value of the stakeholders and everything else that goes by it as profits alone cannot achieve any of the above said. It is the duty of the entities to give back what it takes from the same. Sometimes few theories such as the stakeholder theory and the corporate citizenship theory enunciate that CSR can go to the extent of using the resources of the corporate entity in such a way that it can deprive the stakeholders denying them any special claim, for a greater human cause, a part of humanity from misery. Corporate citizenship theories take as their starting point the idea that business enterprises are a part of society. From there they emphasize business enterprises' "role in respecting and defending human rights and in contributing to social welfare and human development within society" suggesting that the shareholder do not hold any prima faice claim over the corporate resources to alleviate an unfavorable situation among the poor and deprived. The Concept Of Corporate Social Responsibility The concept of Corporate Social Responsibility has been viewed differently by different scholars. The inability of the governments worldwide to protect its subjects and to provide security has lead to renewed public expectations that corporations have public responsibilities. What led to such expectations and are these public responsibilities undertaken by corporations called the Corporate Social Responsibility? Socially responsible behavior has been described as ‘action that goes beyond the legal or regulatory minimum standard with the end of some perceived social good rather than the maximization of profits’. The ingredients of the above mentioned socially responsible behavior has been categorized into many groups namely; 1. The society or the community within which the corporation or the company operates or serves 2. The suppliers of the corporation 3. Employees and Workers of the Corporation. 4. The consumers which the corporation serves 5. The environment where the company exists and where it operates Parkinson’s view on Corporate Social Responsibility:- Parkinson differentiates between rational responsibility and social activism. He states that ration responsibility refers to the support or the aid provided to groups namely the employees, consumers, customers and suppliers to the corporation. On the other hand, social activism aids or provides assistance to even groups which do not fall within the scope of the company’s business operations and activities. It is an effort by the companies to address and sort out social issues that crop up independently and hence is an extension of the corporate activity in a non-commercial arena. However these both can always overlapping activities. Parkinson further adds that there is no further real conflict between profit maximization and socially responsible behavior. He claims that such philanthropic activities cause no controversy. However, problem will arise when the philanthropic behavior is not a response to exterior or interior forces which ultimately aims only at profit maximization of the company. Parkinson concludes that the content of company codes, attitudes of the directors and managers of the company and the mode in which the company spends their financial resources will state that there has not been any shift away from profit maximization object in the corporate world. Structure Of A Corporation The word company is derived from the Latin word, ‘’Companis’’ where ‘’Comp’’ means together and ‘’Panis’’ means bread. The word, ‘’Companis’’ originally meant an association of persons who took their meals together. It is called a corporate because the persons composing it are made into one single body by incorporating it with accordance with law. The word corporation is derived from a Latin word, ‘’Corpus’’ which means body. Tracing the etymology, it can be concluded that a corporation (corpus-body) is a legal person created by a process other than natural birth. Moreover, a company is vested with a corporate personality which is distinct from its members. In Salomon v Salomon and Co. Ltd, it has been clearly established that once a company has been validly constituted under law, it is distinct from its members. A company is separate from its owners, “No member can claim himself to be the owner of the company’s property during its existence or in its winding up’’. A company is thus a juristic person. Therefore, a question may arise if a legal person has any obligation towards the society? To sort out such queries, let’s examine section 172 of the Companies Act, 2006. 172: Duty to promote the success of the company (1) A director of a company must act in the way he considers, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole, and in doing so have regard (amongst other matters) to— (a) The likely consequences of any decision in the long term, (b) The interests of the company's employees (c) The need to foster the company's business relationships with suppliers, customers and others, (d) The impact of the company's operations on the community and the environment, (e) The desirability of the company maintaining a reputation for high standards of business conduct, and (f) The need to act fairly as between members of the company. (2) Where or to the extent that the purposes of the company consist of or include purposes other than the benefit of its members, subsection (1) has effect as if the reference to promoting the success of the company for the benefit of its members were to achieving those purposes. (3) The duty imposed by this section has effect subject to any enactment or rule of law requiring directors, in certain circumstances, to consider or act in the interests of creditors of the company. Observing sub clauses (a) (b) (c) (d) and (e) it can be decided that this particular provision related to corporate social responsibility beyond doubt. Particularly, clause (d) which explicitly emphasizes on the impact of a company on the community and environment. So, here the director of the company takes a foot further to protect rather promotes the status of the community in general. Unfortunately, the scope of this has not been defined properly. The provision does not relate to the company’s CSR program. Without the scope being defined properly, the provision could not be properly interpreted and thus cannot be precisely linked to corporate social responsibility. However, the mere aspect of such a section itself is an adumbration to denote the importance of CSR in England. Also according to Section 417 an annual business review is to be given to its members for them to assess how the directors have performed their duty according to section 172. Thus, Section 417 compliments section 172.The review is to quote the principal risks and uncertainties facing the company. Unfortunately, there have been allegations of unreliable CSR reports. While in India, there is no separate statue, act or any provision that deals with Corporate Social Responsibility (CSR) in the Companies Act 1956. The Vedanta case is a classic example where it has continuously ported itself as communities and its employees in mining sites at Niyamgiri. It has also periodically submitted CSR reports with this regard. But, NGO reports narrate an entirely contradicting story. Whether the company can be legally challenged is another issue. Ultimately, Companies must adopt CSR before they legally learn their lessons. However, the Indian legislature has identified the requirement of such a statute and therefore in the Companies Bill, 2012 it has provided for a provision of CSR under Clause 135.Under this clause all those companies having net worth Rs. 500 crore or more, or turnover of Rs. 1000 crore or more or net profit of rupees five crore or more during any financial year is required to constitute a CSR Committee of the Board consisting of three or more Directors, including at least one Independent Director, for matter relating to CSR in such a way that the company would spend at least 2 per cent of its average net profits of its last three years on specified CSR activities. This is a very intelligent move by the Indian Legislators where the maximum limit and the quantum of amount have been explicitly stated so as to be spent on CSR activities. It would have been more effective if any statue could explain the ambit of the word ‘’CSR activities’’ or there can be chances of judicial cleavages with this regard. Corporate Social Responsibility And Neo American Model Of Company Law To comprehensively understand and analyze the how CSR and a nation’s Company law is related it becomes essential to critically examine different laws. The Company laws of England, America and South Africa embody what has been referred to as the Neo American model of Capitalism which is contrary to the Rhine model in Japan and Western Europe.Under this, the concept is that since the companies exist as the property of the shareholders, shareholders have the right to insist that the company runs for their benefit. The separation of ownership and control has led to the need for company law to protect and promote the needs of the shareholders. However, there are constraints which curtail the ability of the companies to use its funds for philanthropic ends called the ultra vires doctrine. The Ultra Vires Doctrine The object clause sets the main objectives of the company which exists in the memorandum of association. These activities specified in the memorandum can however be altered by a special resolution in terms of both South African and English Company law. This doctrine results in many hardships to innocent third parties and hence has made it very cumbersome. The English Companies Act no longer limits the Company’s capacity in that the validity of that act can no longer be questioned on grounds of lack of capacity.This amendment ahs made the company to be bound by the transaction and thus has been exigent in promoting CSR. Also transactions done outside the scope of the directors but beneficial to the company can be ratified. Section 36 of the South African Company’s Act states;- ‘’No act of a company shall be void by reason only of the fact that the company was without capacity or power so to act or because the directors had no authority to perform that act on behalf of the company by reason only of the sad fact and except as between the company and its directors neither the company nor any other person may in any other legal proceedings assert or rely upon any such lack of capacity or power or authority’’ Therefore, despite the validity of ultra vires the transaction the directors in the South African law are still liable to the company. The modern trend however has have broadly drafted objects clauses so that most activities will not be deemed ultravires by law.Insofar as philanthropic acts that fall outside the objects clause are concerned, the law will in order to protect the interest of the company and indirectly the interests of the shareholders, hold directors responsible for such acts liable for any loss. Corporate Social Responsibility – A Myth Or Reality The concept of myth has to be understood before determining if CSR is a myth or not. The definition of myth is highly necessary. ‘.... always refers to the event alleged to have taken place long ago. But what gives myth an operational value is that specific pattern described it’s timeless, it explains the present and the past as well as the future’ Samizdat stated that ‘Myth provides answers to certain needs in a given society to fills certain function’ The prominence CSR is gaining these years has been due to the result of many evident factors. One reason being, the corporate excesses are being disclosed through media and internet have increased the awareness of the social behavior of the corporations which are indirectly influencing the corporations to adopt a socially friendly behavior pattern. However, there is a heating argument if CSR is reality or if it’s just another cover up. Most corporations in the world have started distinguishing themselves from the so called ‘rogue corporations’. Rouge Corporations are those which are manifested by their misbehaviors. Such distinguishment or distancing has been classified as Corporate Social responsibility. Albeit CSR being a prominent issue in the corporate world, there is still ambiguity as to what exactly constitutes CSR. ‘CSR can be called a concept in which the companies unite social and environmental issues in their business and commercial operations and also in their interaction with shareholders on voluntary basis.’ Today almost all corporations have claimed to be concerned with a variety of stakeholders. Certain stakeholder is considered to be recognized and considered by all corporations in the world such as shareholders, customers and employees. Albeit CSR involves a concern with several stakeholders to a business there are several problems with this research in identifying social responsible behavior. 1. The concern or the attention is mainly provided to powerful stakeholders and not those who merely have a connection with the corporation. Only those who have the power to influence the organisation are given the primary focus. Thus, the workers, customers and employees who have very limited power do not receive the attention. Thus, CSR becomes a rich man’s show. 2. It is essential for CSR to be voluntary. But, No research can actually indicate to what extent the act of CSR is voluntary. The extent to which an action is taken cannot also be measured. 3. Claiming a concern is very different to actually exhibiting that concern through actions. Public Interest is an essential ingredient for CSR. Unfortunately, Public interest is not homogenous but heterogeneous. It has become factionalized into various numerous groups and sub groups that what may be an interest for one may not be an interest for another. Parkinson (2003) in the Continental European tradition , as Portugal Corporations ( Galp and Caixa Geral de Depositors) are regarded as partially public bodies , with constituencies that extend beyond to other groups such as traders , employees ( retirement plans and other benefits) , local communities and trade unions( with strikes and public contests). The Agency Theory The agency theory argues that managers merely act as custodians of the organization and its operational activities and places upon them the burden of managing in the best interest of owners of that business. This theory states that all other stakeholders hold no value to the corporation. The primary focus relies only upon the shareholders. Thus, the myth of CSR is not completely revealed. CSR is merely a structure of a firm’s strategy and the reality is that the corporations have not changed their behavior and the managers have been aiming only to create value for their shareholders. This remains to be the ultimate aim of the corporations and not public interest. CSR was introduced and included in annual reports, corporate reports and practices primarily because of legal enforcements and legal sanctions. The element of public interest does not exist here in this case, claiming Corporate Social Responsibility to be a myth. Public image is another reason behind calling Corporate Social Responsibility a myth. Corporations undertake actions driven by the desire to enhance the reputation of the company and to provide a very positive public image. These actions are driven by ulterior motives. This also distances corporations from communities and the public which they serve. Thus, there is no need for a Corporate Social Responsibility. Arguments Against Corporate Social Responsibility Corporate Social responsibility has been called a blessing to the modern world yet on the contrary many critics call CSR an ‘’Iceberg’’ as it is invincible and it is just an ‘’image management’’. As state earlier it is a defense strategy to enhance the reputation of the corporation. Studies reveal that over 80% of corporate CSR decision-makers were very confident in the ability of good CSR practice to deliver branding and employee benefits. Corporate social responsibility is used as a tool to develop public relations. CSR helps company sell. It helps them reach important target markets which are actually their ulterior motives behind their philanthropic activities. In a world where media plays a crucial role, the charity activities of the corporation are enhanced and a vibrant brand royalty is created. This ultimately gives them an upper advantage while dealing with prospective consumers and this would promote profit maximization. The evil element in CSR can be illustrated by the case study of Nike in the United States of America. The suit was filed by a social activist by the name Mark Kasky against the public relation campaign of the company. The Supreme Court of United States of America in this case held that the company did not have any right so as to avoid criticism. CSR is also accused of being a sly strategy to avoid regulations. It is stated by the critics that regulations would actually hamper the activities which the corporations perform beyond legal necessities. The regulations are criticized by multinational corporations stating that it would discourage them from allotting time, financial resources and social activities towards charitable and philanthropic activities. Corporations have also attempted to lobby against international regulations. They have destroyed the attempts of international regulations. For example; ICC has lobbied against the emission targets stated in the Kyoto Protocol at the climate summits and it vehemently argued stating that the UN in no way can interfere, regulate and measure the way the companies fulfill what they have promised. Another illustration is that the BASD was launched in 2001 along with the ICC and WBCSD to promote the highest participation of the business community in the Johannesburg Earth Summit in 2002. BASD succeeded in opposing and also preventing the steps and initiatives to achieve binding international regulation of corporations through introduction of voluntary mechanisms. Considering various arguments against Corporate Social Responsibility, it is still a dilemma to determine if it is a boon or a ban to the community at large. However, it is always wise to observe both sides of a coin. Case Study Tata Group: With a spanning business and philanthropic landscape Tata Group is a multinational conglomeration which was started as a trading company by Jaksetic Tata in 1868. It has diversified in wide ranging activities, operating more than 80 companies. Under Ratan Tata, the group went through major organizational phases — rationalization, globalization, and now innovation, as it aims to reach a reported $500 billion in revenues by 2020-21, approximately the size of the multinational corporation Walmart. Nearly more than half of the equity of the parent firm is held by philanthropic trusts provided by the founders of the Company. The Tata Group was presented with the Carnegie Medal of Philanthropy in 2007 acknowledging its various charitable activities among various other awards in the past. The Tata Group is guided by the words of JRD Tata, "No success or achievement in material terms is worthwhile unless it serves the needs or interests of the country and its people." Tata Sons gives away around 8-14% of the profits for the purpose of various social activities through the trusts. Even when the economy was unstable in the 1990’s, the spending of the group towards social activities did not decrease. It increased from Rs 670 million in 1997-98 to Rs 1.36 billion in 1999-2000. In the year 2004, Tata Steel group alone allocated Rs 45 crore on social services. From supporting Gandhiji’s campaign in South Africa against racial discrimination to health, sports, educational infrastructure, SHG’s, socioeconomic empowerment measures in various states, government assistance during natural calamities, research facilities and funding, introducing labor welfare laws till the contribution in 26/11 attack on Taj Hotel, Mumbai and many more. With regard to business strategy, in order to ensure the sustainability of activities carried out, the Tata Power follows the Triple Bottom-line Approach thereby adding to the economic value to the livelihood of the members of the community, environmental conservation and improving health and urban development. The Company also made amendments to of the Articles of Association thereby including new article the scope of which relates to the societal and ethical responsibilities of the company to prospective consumers, workers and employees, shareholders, society at large and the local community. Another amendment was made to the Clause 10 of the Code of Conduct to further recognize CSR. Corporate Social Responsibility highlighted in its eight key business processes identified by TISCO's management which was considered exigent to the sustained development of the company. With approximately 66% of the profits from the investment branch of Tata sons goes to charity and numerous other initiatives, being the nation’s largest employment producer to listing some of its affiliates on Wall Street, Tata Group is huge success and a brilliant example for CSR from India. Jamshed Irani, the Director of Tata Sons Ltd, says, "The Tata credo is that 'give back to the people what you have earned from them'. Inference: The TATA case study is well suited to the Parkinson’s theory of Corporate Social Responsibility. Despite the lack of any separate legislation for CSR in India the TATA groups have engaged in a great deal of charity works. According to Parkinson Rational activism and Social activism are two different things as social activism takes a step further to protect and promote the interests of not juts its stakeholders but also the general community. He also added the philanthropic activities may not conflict with profit maximization. Likewise, the TATA groups two third share are owned by philanthropic trusts and around 10% of the profits are spent for social and charitable activities. Inspire of all such spending TATA has been one of the richest corporations in India and also one of the riches in the world. Thus, the case study of TATA groups clearly explains the Parkinson’s view that even if the company spends their financial resources, there need not be any shift away from profit maximization object in the corporate world. Tesco: Tesco is the world’s second largest multinational grocery store after Walmart by profits with its mark in 12 countries. The company was founded by Sir Jack Cohen in the year 1919 utilizing his World War I service bonus. The company expanded largely through acquit ion of other grocery chains and diversified its service to finance, telecommunication, clothing and other non food items and stood with an increased profit of £2.8 billion for the financial year 2007-08. Tesco ventured into CSR in the late 1980s with an initiative titled 'Charity of the Year'. Tesco, considering CSR an integral part of its corporate framework, chalked out several internal and external activities. The company Internally, Tesco focused mainly on resource conservation at the stores with respect to water and electricity. They started with recycling various products such as mobile phones, Christmas greetings, organic products, usage of biodegradable bags and also contributed to charity. They also provided for employment diversity, safe working conditions, and pension schemes for employees and health care facilities. All the initiatives taken by Tesco were through a virtuous cycle. Their activities involved the consumers, intermediaries and the employees. For example, when they started the ‘computer for schools’ scheme in 1992, they mobilized their funds by giving vouchers at the stores when the consumers purchased products. They largely addressed environmental issues, for example, to try and reduce the carbon foot print, sell products that are not tested on animals etc and also community issues by regenerating employment in the community through training programs, health care and educational facilities. Apart from this, they also focused on sports, sponsoring Tesco Cup, a football competition for youngsters. As is evident, with regard to CSR, they show much of their focus is on external activities yet, their internal activity with regard to CSR is compensated by its partnership dialog with its trade unions which stands out as a good example of CSR. They have also been regarded as one of the first fully commercial business entity that has funded UNICEF in one of its campaigns. On its CSR efforts, Tesco says, "As a responsible Company, Tesco works hard to bring real benefits to the communities we serve, the environment and the economy. This is recognized through our inclusion in the FTSE4 Good and Dow Jones Sustainability indices." Tesco has also ventured into India with the help of the Tata Group to set up a whole sale business in Mumbai along with its limited presence in Bangalore. Inference: Thus, CSR can be deemed to the secret behind the success of TESCO. To make the above mentioned statement agreeable, the activities of TESCO can be linked to its increased reputation. The computer for ‘’education programmed’’ initiated by TESCO would have helped children to a great extend building in the minds of the general public a very strong trust and TESCO which had a wide number of grocery stores was benefited from the public as groceries are something everybody needs. Sponsoring for the TESCO cupis another concrete example where it not only served as a told of advertisement but also an instrument to build in minds of several people, a strong trust. This trust would evidently reflect upon TESCO’s profits. Section 172 – ‘’duty to promote the success of the company’’ has been well applied in the case of TESCO. Here, the directors of TESCO have done a considerable work in protecting interest of the employees, suppliers and the community in general. Thus, these are not considered to be ‘’ultra vires’’ as it is actually expected out of the English Law itself. Thus, CSR was and is one of the main secret behind its commendable success in the markets. Ambuja Cements Gujarat Ambuja Cement was set up in 1986.It started its plants are Chandrapur, Maharashtra. The company has grown 10 times in the last 4 years. Now, it is currently the third largest cement company with capacity of 12.5mn tonnes. The revenue of the corporation is excess of 2500 crores. The Corporate Social Responsibility of Ambhuja Cement started with a simple initiative of providing basic infrastructure for villagers in a place called Kodinar and few surroundings in Gujarat, Western India. When this turned out to be a success, the company multiplied their CSR activities with enhanced eagerness and enthusiasm. Thus, this small initiative spread to 350 rural villages in 7 backward states in India. This helped in achieving a balanced growth which is highly essential in a country like India where the resources are partially distributed throughout the country. Another important move of Ambuja cement was unleashing of women power. Women are considered a very weaker and vulnerable sex in India. Providing job opportunities for women by Ambuja Cement has been a tremendous step towards development of women empowerment. The following are the company’s initiatives: 1. Natural Resource Management: The main focus of the corporation is to manage natural resources such as designing an integrated water shed development programme. 2. Salinity Mitigation : Gujarat Coastal Salinity Programme in collaboration with TATA groups had been devised 3. Agricultural Development: The Company has taken several steps to aid agriculture since it is the major occupation in India and there is scarcity in food crops. 4. Heath Care: The Company focused on HIV AIDS awareness programmes. Medical camps were organised regularly by the corporation to treat the sick in the nearby localities. Inference: Such activities had enhanced the public image of the company in India and have become the most profitable cement manufacture in India and the lowest cost producer. Ambuja cements reveals to us how exactly CSR is used as an instrument or a strategy or a visionary plan which targets the bull’s eye profit which is done with many other organizational goals. Ambuja cements have clearly disclosed the fact that it may not actually be enough for companies to serve consumers with their products but also to maintain cordial relationships with people, community and the natural environment which will alone help them to move higher beyond a point and grow over time for a sustained period. Therefore this case study helps us to understand how a corporation to be successful in the long run must contribute towards the well being of the society and environment. Conclusion Economic history shows us that corporate social interactions take place in a dynamic, unpredictable and extremely complex politico-economic environment.As the number of companies enter the multinational field is rapidly increases, and the general public becomes more knowledgeable regarding the social and environmental conditions in developing countries, the need for a considerable, open, transparent disclosure of corporate conduct will eventually increase. Since they play a very important role in shaping the consumer and the government forces the actual nature of interactions of corporate entities with the society must be more comprehensively analyzed to deal effectively with CSR. Any mandatory governance reforms intended to spur more corporate altruism are almost sure to have general institutional costs within the corporate system itself. The main criteria that would be the deciding point is whether the any benefit of a reform will exceed costs. One approach a corporation can use when arriving at an ethical decision concerning its philanthropic efforts would be to consider the utilitarian calculation, comparing the costs and benefits of a decision when deciding to make contributions to nonprofit causes. The deciding factor for the above posed question will arise from one’s social and political beliefs. While there are two sides to the same coin, some claim that it is economically justifiable and the others argue that it is not socially beneficial in all circumstances. Leaving alone the above argument with respect to the social responsibility, economically speaking, there is a necessity to develop a suitable framework for a proper analysis of the situation to implement CSR. The social choice perspective may require radically novel economic and political frameworks within which to judge CSRIf corporations are to be tapped as a resource for confronting and responding to social problems, courts must extend the limits on the valid exercise of director discretion to include the power to make decisions which advance the public interest at a marginal profit cost to the corporation. It has to be kept in mind that it is not just the profit motive that the corporate entity has, it is also the obligation to satisfy the various stakeholders of the company that also constitutes the consumers, government policies etc. but on the other hand the entity also has advantages venturing into and taking upon itself the task of philanthropic activities. It helps the corporate business to build a positive goodwill and rapport with the consumers thereby attracting more and more, thereby increasing the sales and thus the profit. The margin of money spent on such activities must be made sure to be less than what is earned, or it would end in a corporate suicide. Every situation must be economically tested, and such a properly tested report on the issue will have to be considered to for the activities the company will have to undertake to promote its philanthropic activities for the community’s cause. Thu, 19 Oct 2017 21:34:16 -0400 Questionnaire http://www.arazzaqlaw.com/questionnaire http://www.arazzaqlaw.com/questionnaire Q. What is the role of a commercial lawyer in the business of a law firm? The role of a commercial lawyer in the modern legal arena has evolved from being a legal technician to a business advisor. The lawyers who are commercially aware of the requirements of the traders will be able to manage their business by helping them achieve their business objectives, by delivering practical solutions to their concerns. Legal and commercial awareness is the attitude which reflects the current market conditions with an understanding of the developments in law. In involves an understanding of the economical, social and political framework in which law operates. Q. What are the different modes of company set up through which foreign investors can invest in Kuwait? In order to do business in Kuwait any foreigner should have a legal entity for which they should set up a commercial company or appoint a local agent. Kuwait has a civil code, commercial law and the company law which details the procedures for setting up of a company in Kuwait. A foreign person or entity may enter the Kuwaiti market and conduct business in the following ways; (1) Limited Liability Company; (2) Joint Stock Company; (3) General & Limited Partnership (4) Joint Venture. (5) Agency set up Limited Liability Companies The limited liability company is simple to establish and to operate and, therefore, is popular among foreign investors. The Companies Law provides that at least 51 percent of a limited liability company shareholding must be owned by a Kuwaiti citizen. The limited liability company may not be used for insurance, finance and banking activities. After the filing procedures are completed necessary approval from various governmental bodies should be obtained i.e. Registration of the Company with the Chamber of Commerce; Registration with the Public Authority of Civil Information (PACI); Registration of the 'commercial signs' with the Municipality; Registration with the Ministry of Social Affairs; Registration with the immigration department. Joint Venture A joint venture company does not have a legal personality and therefore it is treated as a private contract. The joint venture (Company) may transact business with third parties only through one Partner, who is personally liable for the transactions he enters into with third parties. The transacting Partner's liability to third parties is unlimited. The liability of a non-transacting Partner is limited to his share in the joint venture. Normally, the joint venture agreement will devise guidelines or framework on how to form a legal entity in Kuwait. Joint Venture Agreement is common in government projects. Agency law The Agency Laws of Kuwait insists on a number of conditions which need to be fulfilled for registration of a commercial agency. For that, the Agency Agreement needs to be duly registered with the commercial agency register at the Ministry of Commerce and Industry (MCI).The Agent must be an eligible Kuwaiti national or a wholly owned Kuwaiti entity incorporated in Kuwait. The agency agreement must be in writing and should include the name, nationality and address of the Agent and the Principal; the products, commodities and services covered in the agency relationship; the area of operation; the commencement date and the duration of the Agreement Q: Can you suggest some of the important changes that have come about in the foreign business relationship? A: Under the 1960 Law a company with limited liability was required to have a Kuwaiti partner holding at least 51% of the parts. In December 2012, the Companies Law Decree No. 25 of 2012 has been promulgated in Kuwait. Later on, Law No. 97 of 2013 amending certain articles of Law Decree No. 25 has been promulgated. The Companies Law Decree No. 25 of 2012, as amended by Law No. 97 of 2013, has replaced the Commercial Companies Law No. 15 of 1960 (the “Companies Law”). The implementation of the Companies Law primarily addresses corporate establishment and governance in Kuwait. Due to the implementation of the new commercial laws there will be more involvement of foreign expertise and foreign investment. It gives more flexibility in company incorporation procedures and the time delay in obtaining the license is also addressed. The law allows professional partnership allowing the people with the same profession to establish a business entity under closed joint stock company, Limited Liability Company or general or limited partnership. The Foreign Investment Bureau was initially set up under the Foreign Direct Investment law (FDI) No. 8 of 2001 to enable the foreign investors to own 100% foreign investment. However, FDI was not able to issue licenses for new entrepreneurs as per the growing demand. Only investors in the financial sector benefited from it. Moreover, there was undue delay in the processing the licenses which made the foreign investors shy away from it. However, the revised FDI Law No. 116/2013, apart from 100% foreign investment, aims at providing foreign companies more viable options. For example, the license to open and operate a branch in Kuwait and to establish a representative office to exclusively conduct marketing studies (not commercial operations). What are the legal measures usually adopted by the legal department of a corporate for the smooth functioning of the company? A: Legal governance, risk management and compliance are the set of tools, methods or system adapted by the legal departments of a corporate in order to implement an integrated approach to resolve the corporate problems. Legal governance involves the establishment, interpretation and execution of the policies and guidelines. The risk management is the process by which an organization evaluates the risk, identifies potential risks and prioritizes the risk based on the organization’s business objectives. The legal department helps in mitigating these risk factors. The legal compliance ensures that the organization follows the laws, regulations and rules of the relevant country where the organization carries out its business. Q: What are the functions of the compliance department of a company? A: Identification of the risks, prevention of risks, monitoring/detection of risks and resolution of the risks are the major tasks conferred on the compliance department of a company. For which they provide advisory services as well as strive to remove the compliance problems through court trial, if necessary. Also, there has been a significant increase in interest in Corporate Social Responsibility (CSR) in recent years Q: What are the key objectives of the compliance department of an investment company? A: The protection of the investors, ensuring a transparent market, maintaining confidence of the consumers and reducing the crime rate. All laws relating to the establishment of the financial institution and regulation of trading of securities is explained under Law No. 7 of 2010 ('The Law of Capital Markets Authority'). The Law of Capital Markets Authority aims to protect shareholders from tampering and manipulation of Shares. The main advantage of the Law of Capital Markets Authority is that there is prosecution for violators. The introduction of the Capital Markets Authority is a welcome move and is now actively involved in regulating the stock exchange. Only through a well regulated stock trading system more investors can be attracted to Kuwait. However, improvement in the implementation procedures of the law is necessary for proper enforcement of the law. Q: Whether the arbitration mechanisms are helpful in resolving a dispute with a foreign partner? A: The dispute resolution mechanism between two business partners will be as per the terms agreed between the parties in the contract. As a general rule, a foreign partner will seek to have his disputes resolved by way of arbitration or the courts in his jurisdiction for the sake of convenience and acquaintance. The main advantage of agreeing to arbitration is the ease in implementation of the arbitral award. Kuwait is a signatory of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 and therefore arbitral awards are readily enforceable in Kuwait than a foreign (Court's) judgment. Therefore, inclusion of arbitration provisions in agreements with foreign contracting parties may give some advantage to the foreign partner. Q: An unusual case where the lack of proper legal compliance system in a company ended up in court case? A: The law of precedence is not followed in Kuwait i.e. precedent established by the previous cases will not be considered while judging a case. There may be similarities in some of the disputes but each case will be decided based on its merits applying the rule of law. In a recent case a foreign company (49% shareholder in a local company) entered into a Share Purchase Agreement (SPA) based on mutual understanding with the local partner that on signing the SPA its shares in the local company will be transferred to a newly formed company through separate agreements. However, after signing the SPA the local company refused to transfer the shares and the share purchase agreement remained valid, which ended up in a lengthy legal battle. If corporate governance policies were effectively complied within corporate, such legal hassles could be avoided as the risks would be properly evaluated before entering into contracts. If there is lack of certainty in business relationships it will be difficult to enforce legal rights Q: Whether the new Company law of Kuwait eased the procedures in the Transfer of shares. A: Yes, the new Companies Law has introduced new provisions and amended previous provisions to allow more flexibility in the establishment and operations of the companies, including the transfer of shares by investors. The new law introduces separate procedures to enable investors to more easily transfer their legal ownership interests in a WLL. The procedures are as follows: • The consent of the existing partners must be obtained in order to sell shares to third parties. • In the event unanimous consent from the partners is not obtained, the conditions of the transfer offer can be published in the Official Gazette. • If the existing partners do not exercise their right of redemption within fifteen days of publication, then the partner is free to transfer any share. • The request to transfer shares must be attached with a certified cheque for the full value of the assigned parts in the assignor’s name. • When amending the memorandum of association, only the signatures of the transferring partner and the transferee are required, thereby eliminating the need to obtain the signatures of all the partners on the amendment of the memorandum of association (Article 100). Q. What are the measures the foreign contractors who are new to Kuwait should undertake? The process of entering into a foreign market diversifies a business enterprise but contracting should be done on market terms complying with the local laws. Entering into an agency relationship is the easiest way to start operation in Kuwait. However, proper evaluation of the agency agreements and proper understanding of the agency laws of the country is crucial in overcoming the legal hurdles. The foreign investor should be aware that the agent will be entitled to a fair compensation from the Principal if in case the Principal withdraws from the agency agreement before its expiry for no apparent reason or if the Agent is not in default. The new agent could also be held jointly and severally liable with the principal for any damages arising under Articles 281/282 of the Commercial Law. Big Contractors entering into Kuwait should be aware of their offset obligations. Foreign contractors who meet certain criteria should enter into offset obligation. Offset obligations are applicable when the single cumulative value of supply contract(s) awarded to a foreign contractor is equal to or greater than KD 10 million and in defense contracts with a value of KD 3 million. The offset obligation is effective from the date of signing of the supply contract and is equal to 30% of the monetary value. There is a bank guarantee equivalent to 6% of the total monetary value of the supply contract. The penalty that National Offset Company imposes on the foreign contractor is by cashing the bank guarantee or by excluding the foreign contractor from entering in future contracts. Thu, 19 Oct 2017 21:34:16 -0400 Kuwait Parliament ratifies MoU http://www.arazzaqlaw.com/kuwait-parliament-ratifies-mou http://www.arazzaqlaw.com/kuwait-parliament-ratifies-mou Kuwait's parliament (Majlis Al-Umma) ratified a memorandum of understanding on security cooperation with Iran. An MoU on security cooperation was signed by the Islamic Republic of Iran and Kuwait on October 2000, underlining the need for expansion of collaboration in the field of campaign against drug trafficking, terrorism, organized crimes and cooperation on extradition of criminals. Thu, 19 Oct 2017 21:34:16 -0400 Forum touts merits of arbitration in Kuwait http://www.arazzaqlaw.com/arbitration-in-kuwait http://www.arazzaqlaw.com/arbitration-in-kuwait A number of speakers at a forum organized by the Kuwaiti Bar Association touted the merits of arbitration when dealing with disputes over commercial contracts. Speaking at the forum which was also co-organized by the GCC commercial arbitration center, Judge Sultan Bouresli considered the system of arbitration a useful way to settle disputes regarding the construction of large projects or their operation or the changeover in their ownership. The B.O.T. system being widely adopted by countries in the region and that it was a viable approach toward implementing massive development projects involving many complicated Legal aspects. Arbitration was aptly-placed to deal with problems arising from B.O.T.-related disputes. Another speaker at the forum, secretary general of the GCC arbitration center Nasser al-Zaid, underlined the center's emphasis on spreading the culture of amicable arbitration among businesses. Fair use of arbitration in the field of business, would attract foreign investors to the Gulf region because they would be assured that none of their Legal rights would be jeopardized in any kind of a business deal. Commercial arbitration supports existing Legal channels to bring resolution to disputes among businesses. Governments in the region, as well as the private sector, deal with vital business contracts that help in the development of societies through the building of infrastructure projects and providing employment for their citizens. When these contracts run in trouble, it is often speedier and easier and less costly to remedy the trouble through commercial contract arbitration.The forum discussed the merits of arbitration, the system of B.O.T. and the pros and cons about it, and other topics related to business law. Thu, 19 Oct 2017 21:34:16 -0400 Municipal Council oks change in electoral law on five constituencies http://www.arazzaqlaw.com/municipal-council-oks-change-in-electoral-law-on-five-constituencies http://www.arazzaqlaw.com/municipal-council-oks-change-in-electoral-law-on-five-constituencies The Municipal Council approved a proposed amendment to the 2005 Municipal Law, article 5, paving the way for the number of municipal council members to be 31 representing five constituencies. According the draft amendment the number of municipal council members is to increase from its present number of 16 to 31 provided 20 of them are elected while the remaining 11 would be appointed by means of Amiri decrees. Several draft amendments were put forward but the one which was approved by the committee was that calling for five constituencies with an increase in the number of municipal counsel members. The council also approved other amendments related to articles 26, 27, 33 and 34. As for an amendment related to article 14, it was decided to submit it to the legal committee for change. The amendment to article 14 relates to the wording of the amendment and the 90 day delay given to cabinet to approve or disapprove municipal council resolutions. Under article 14, the municipal council is entitled to face up to any rejection of resolutions by the minister in charge of municipal affairs by submitting the resolutions to cabinet for the last word on them. The municipal council also discussed the findings of a special team appointed to revise agricultural laws in areas of private residence. The draft resolutions were approved except those under article 14. Under the proposed article 14 amendment, the size of backyards in private homes should not exceed 15 square meters. But the proposed amendment was rejected in favor of one paving the way for backyard size to be not more than 25 square meters. Thu, 19 Oct 2017 21:34:16 -0400 Direct Foreign Capital Investment in Kuwait http://www.arazzaqlaw.com/kuwaiti-new-laws http://www.arazzaqlaw.com/kuwaiti-new-laws Law No. 8/2001 regarding the Organization of Direct Foreign Capital Investment in Kuwait was issued recently by the National Assembly. According to this new law foreign investors would be able to accomplish commercial and economic projects inside Kuwait. The new legislation made it possible to the establishment of Kuwaiti companies in which the foreign holding may be 100%. Law No. 8/2001 specifically authorizes foreign-majority ownership and 100 percent foreign ownership in certain industries including: infrastructure projects (water, power, waste water treatment or communications); investment and exchange companies; insurance companies; information technology and software development; hospitals and pharmaceuticals; air, land and sea freight; tourism, hotels, and entertainment; housing projects and urban development. Though the foreign firms are permitted to invest in petrochemical joint ventures they may not invest in the upstream petroleum sector. Per the legislation brought before Parliament in January 2004 a limited, restricted investment in the petroleum sector is allowed. The law also ensures that the foreign investor will be given protection from confiscation or nationalization of any project authorized under the said Law. The Law allows total or partial assignment of the project and also gives the right to transfer abroad all profits and capital. In addition, the Law permits the Investment Committee to permit a tax holiday for a maximum of ten years and total or partial exemption from custom duties payable on imports of certain commodities. Thu, 19 Oct 2017 21:34:16 -0400 Privacy http://www.arazzaqlaw.com/privacy http://www.arazzaqlaw.com/privacy The information in this website is for general information only and does not constitute any type of advice, legal or otherwise. Consequently, you should not regard the the contents of this website as a substitute for professional advice. Abdul Razzaq Abdullah & Partners Law firm shall not be obliged to update this website. Abdul Razzaq Abdullah & Partners Law firm does not make any warranty, whether express or implied, with respect to the contents of this website, including without limitation, any warranty as to the accuracy, completeness, merchantability or fitness for a particular purpose or any other warranties howsoever arising. You are fully responsible for all acts, decisions and/or lack thereof arising from your access to this website and all information contained therein. Abdul Razzaq Abdullah & Partners Law firm shall not be liable to you or any party in any manner whatsoever for any damages, including without limitation, direct, indirect, consequential, compensatory, special, incidental or punitive damages, as a result of or in connection with your access to this website. All text, photographs, publications, designs, graphics, images, and all other elements contained on this website and all intellectual property therein, including without limitation, all copyrights and trademarks (including without limitation the "Abdul Razzaq Abdullah & Partners Law firm" the "Law Update", and the "Kuwaiti Business Law Update" trademarks), are the sole and exclusive property of Abdul Razzaq Abdullah & Partners Law firm. You may not reproduce, copy, create a derivative work from, imitate, sell, distribute, license or transmit in any form any part of this website, including without limition, any part of the publications set out in this website without the prior written consent of Abdul Razzaq Abdullah & Partners Law firm, such permission to be granted or denied at Abdul Razzaq Abdullah & Partners Law firm's sole discretion. Abdul Razzaq Abdullah & Partners Law firm All rights in this website are reserved. Thu, 19 Oct 2017 21:34:16 -0400 Agency and Distributorship http://www.arazzaqlaw.com/agency-and-distributorship-law http://www.arazzaqlaw.com/agency-and-distributorship-law The Firm has been instrumental in assisting many foreign firms establish agencies and distribution agreements in Kuwait. Experienced ARALF attorneys negotiate, draft and review agency and distribution agreements and, when necessary, have successfully represented many clients in litigation stemming from such agreements. Appointment of an Agent in Kuwait Article 24 of Commercial law of Kuwait confirms that, a foreigner cannot enter into business in Kuwait without a Kuwaiti partner. There are three types of commercial agencies; Contracts proxy (Article 271 of the Kuwaiti Commercial Code). Distributorship (Article 286 of the Kuwait Commercial Code). Commission agency (Articles 287 -296 of the Commercial Code.) Commercial Representative (Articles 297 - 305 of the Commercial Code) Procedures and requirements The investor must enter into an agency contract and get it registered from the Chamber of Commerce and Ministry of Commerce. The application must be accompanied by official true copy of the Agency contract and the Memorandum of Association and Articles of Association of the Kuwaiti Company. It may take maximum of 15 days to register the Agency Contract. Thu, 19 Oct 2017 21:34:16 -0400 Arbitration Law http://www.arazzaqlaw.com/arbitration-law http://www.arazzaqlaw.com/arbitration-law The Firm has been instrumental in assisting many foreign firms establish agencies and distribution agreements in Kuwait. Experienced ARALF attorneys negotiate, draft and review agency and distribution agreements and, when necessary, have successfully represented many clients in litigation stemming from such agreements. Appointment of an Agent in Kuwait Article 24 of Commercial law of Kuwait confirms that, a foreigner cannot enter into business in Kuwait without a Kuwaiti partner. There are three types of commercial agencies; Contracts proxy (Article 271 of the Kuwaiti Commercial Code). Distributorship (Article 286 of the Kuwait Commercial Code). Commission agency (Articles 287 -296 of the Commercial Code.) Commercial Representative (Articles 297 - 305 of the Commercial Code) Procedures and requirements The investor must enter into an agency contract and get it registered from the Chamber of Commerce and Ministry of Commerce. The application must be accompanied by official true copy of the Agency contract and the Memorandum of Association and Articles of Association of the Kuwaiti Company. It may take maximum of 15 days to register the Agency Contract. Thu, 19 Oct 2017 21:34:16 -0400 Aviation and Maritime Law http://www.arazzaqlaw.com/aviation-and-maritime-laws http://www.arazzaqlaw.com/aviation-and-maritime-laws The firm's experience in the aviation sector includes virtually every aspect of the industry. Issues related to the leasing and charter of aircraft, inter-airline agreements, contracts and even customer service complaints have all been handled by aviation experts. The Aviation law of Kuwait though still nascent is growing steadily. Law No 30 of 1960 or the Kuwait Civil Air Navigation Regulations enacted by the Amiri Decree regulates the aviation industry. The said law covers all the major aspects of supervision of aviation activities and the ICAO Standards are therefore binding on all the users. Moreover, Kuwait has ratified the Chicago Convention and the DGCA is an autonomous body constituted by the Amiri Decree to regulate all aviation activities. New regulations and procedures with regards to licensing activities, including the issuance and renewal of flight crew licenses, certification of aviation schools, and allotment of aviation medical examiners is promulgated by the DGCA The Maritime practice is equal broad, including the resolution of charter disputes, maritime insurance claims, ship sales, purchasing and financing. The Maritime law No28 of 1980 was promulgated for the effective administration of the Kuwait marine related disputes. Moreover, the proliferation of the Kuwaiti laws paved way for the enactment of maritime laws of Oman, Qatar, U.A.E and Bahrain. The ship owner/carrier sailing in the oceans of the G.C.C. therefore face similar treatment and their rights and liabilities would be determined more or less on a similar basis, irrespective of the place of jurisdiction they fall to be adjudicated. Thu, 19 Oct 2017 21:34:16 -0400 Bankruptcy and Liquidation http://www.arazzaqlaw.com/bankruptcy-and-liquidation-law http://www.arazzaqlaw.com/bankruptcy-and-liquidation-law While this is an area most companies prefer to ignore, should bankruptcy and liquidation become necessary, experienced legal advice and the resulting actions can be critical to the outcome of the process. The firm has a solid team of lawyers that have handled complex bankruptcy, liquidation and reorganization proceedings. They are also experienced in protecting clients during intricate bankruptcy litigation.    Thu, 19 Oct 2017 21:34:16 -0400 Corporate Law http://www.arazzaqlaw.com/corporate-laws http://www.arazzaqlaw.com/corporate-laws The legal machinations of establishing ventures are never easy; the task is even more difficult when trying to set-up a company in a foreign country.  With many such proceedings to firm's credit, the firm has a proven record of assisting in structuring the appropriate form of business and in establishing or restructuring corporate entities. The firm handled the incorporation of many leading companies and financial institutions in Kuwait, many of which are now recognized as market leaders and renders advice to them on issues related to corporate finance and corporate governance. Limited Liability Company (WLL) Next to Agency relationship the most widely recognized legal frame work for setting up business in Kuwait by an expatriate is to enter into business by setting up a limited liability company (WLL). A limited liability company is formed by applying for a Memorandum of Association to be entered into the Commercial Register, a process which may last three to six months. The limited liability company is managed by one or more directors, named in the Memorandum or appointed by the general meeting of shareholders. The directors have full authority to obligate the limited liability company, unless the Memorandum provides otherwise or the shareholders vote to restrict this authority Joint ventures Article 56 of the company law defines joint venture as a 'commercial company' where responsibilities and rights are confined to those parties who enter into the contractual relationship. The clause states that, the parties shall recourse to each other with regards to the activities of the company to the extent of the share each party holds and pursuant to the joint venture agreement that they entered into. Article 59 of the law emphasizes that joint ventures does not have an artificial personality and the third parties shall have no involvement in the company's activities except with the partner(s) with whom they concluded the contract. However, If the 'joint venture company' enters into business with third parties then all the partners would be held liable irrespective of whether they are personally involved in the transaction or not. Article 60 which supersede the provisions given in article 59, confirm this by stating that notwithstanding anything contained in Article 59 any third party can adhere to Articles of Association of the joint venture company if the company deals with him in its capacity as a joint venture. In related cases provisions in the Articles of incorporation is proved through presumptions and evidences. It is also to be noted that under Kuwaiti law there is no provision for a joint venture company to issue negotiable shares or bonds. Abdul Razzaq & Partners has significant experience in all aspects of law related to joint ventures.  The firm has been involved in the establishment of joint ventures, from the planning and negotiation phase to advising on the legal implications of various structures.  The firm is also experienced in handling judicial and arbitration proceedings related to joint venture disputes. The legal machinations of establishing ventures are never easy; the task is even more difficult when trying to set-up a company in a foreign country.  With many such proceedings to firm's credit, the firm has a proven record of assisting in structuring the appropriate form of business and in establishing or restructuring corporate entities. The firm handled the incorporation of many leading companies and financial institutions in Kuwait, many of which are now recognized as market leaders and renders advice to them on issues related to corporate finance and corporate governance. Thu, 19 Oct 2017 21:34:16 -0400 Direct Foreign Investment http://www.arazzaqlaw.com/direct-foreign-investment http://www.arazzaqlaw.com/direct-foreign-investment Through Law No. 8/2001 National Assembly of Kuwait has implemented provisions for direct foreign investment. According to this new law foreign investors would be able to accomplish commercial and economic projects inside Kuwait. The new legislation made it possible to have foreign holding up to 100%. Law No. 8/2001 specifically authorizes foreign-majority ownership and 100 percent foreign ownership in certain industries including: infrastructure projects (water, power, waste water treatment or communications); investment and exchange companies; insurance companies; information technology and software development; hospitals and pharmaceuticals; air, land and sea freight; tourism, hotels, and entertainment; housing projects and urban development. Though the foreign firms are permitted to invest in petrochemical joint ventures they may not invest in the upstream petroleum sector. Per the legislation brought before Parliament in January 2004 a limited, restricted investment in the petroleum sector is allowed. The law also ensures that the foreign investor will be given protection from confiscation or nationalization of any project authorized under the said Law. The Law allows total or partial assignment of the project and also gives the right to transfer abroad all profits and capital. In addition, the Law permits the Investment Committee to permit a tax holiday for a maximum of ten years and total or partial exemption from custom duties payable on imports of certain commodities. Thu, 19 Oct 2017 21:34:16 -0400 Employment laws http://www.arazzaqlaw.com/employment-law http://www.arazzaqlaw.com/employment-law Firm members possess superior experience in dispute resolution related to both private sector and civil service employment law. ARALF advise clients on the interplay of local labor law and render assistance in drafting employee contracts. Furthermore, the firm assists foreign entities in understanding the Kuwaiti labor laws and represents clients in proceedings before The Ministry of Labor, and courts including The Experts Department. The firm has represented many logistical support companies in labor disputes in Kuwait and obtained favorable judgments.     Thu, 19 Oct 2017 21:34:16 -0400 Banking & Islamic Finance http://www.arazzaqlaw.com/banking-islamic-finance-law http://www.arazzaqlaw.com/banking-islamic-finance-law Both traditional and Islamic banks and financial institutions are included on the firm's client list.  Firm's lawyers advise on regulatory matters and on the acquisition and establishment of financial institutions. The firm also has extensive experience in mergers and acquisitions, asset purchases, and refinancing and restructuring transactions. Big corporate and financial institution turns to us for legal assistance in structuring and documenting their deals. ARALF's work encompasses a range of lending products, from significant syndicated lending, investment grade and leveraged acquisition finance to structured finance, Islamic finance and real estate financing. The firm's reputation as one of the premiere firm in Kuwait is based on commercial understanding of what clients are trying to achieve, the quality of documentation and the ability to deliver a high value service within the stipulated timeframes. ARALF has been successful in both identifying and cultivating new projects and strives to continually be the best in project management; the firm assists to take well thought-out steps towards protecting an organization's current position in the market The level of performance achieved over many years and the true dedication makes services of the firm significant. ARALF offers clients an excellent level of service, coupling the benefits of being a specialist in financial and Islamic law. Thu, 19 Oct 2017 21:34:16 -0400 Government Procurement http://www.arazzaqlaw.com/government-procurement-law http://www.arazzaqlaw.com/government-procurement-law Several firm attorneys have decades of experience working with local and national government bodies in Kuwait.  The firm has assisted many foreign firms understand and compete in bids for government projects. ARALF has also provided legal advice to clients with respect to Kuwait's unique law on disclosing commissions and offset programs.     Thu, 19 Oct 2017 21:34:16 -0400 Insurance http://www.arazzaqlaw.com/insurance-law http://www.arazzaqlaw.com/insurance-law Abdul Razzaq & Partners offers a full range of insurance-related legal services including everything from advising clients on coverage issues to representing clients in relevant litigation.     Thu, 19 Oct 2017 21:34:16 -0400 Intellectual Property http://www.arazzaqlaw.com/intellectual-property-law http://www.arazzaqlaw.com/intellectual-property-law An area of practice that has become critically important, the firm is proud to have a team led by a legal specialist, with extensive continuing education and experience in intellectual property and technology law.   That is the reason the firm has been retained by a leading information technology training and development firm to protect the company's products in Kuwait and other GCC states. An area of practice that has become critically important, the firm is proud to have a team led by a legal specialist, with extensive continuing education and experience in intellectual property and technology law.   That is the reason the firm has been retained by a leading information technology training and development firm to protect the company's products in Kuwait and other GCC states. The team has experience in litigation and prosecution in all areas of intellectual property and technology law, which inter alia includes patents, trademarks, copyrights and industrial designs. Team lawyers draft and process registration applications for clients and assist clients in the enforcement of their rights through litigation, if necessary.  The firm has also been involved in negotiating and drafting licensing and franchising agreements and providing specialized advice on disputes arising from violations of existing agreements.   Copyright Kuwait is a member of the World Trade Organization and a signatory to the Agreement on Trade Related Aspects of Intellectual Property Rights.   Kuwait is also a member of the World Intellectual Property Organization. In 1999 to comply with Kuwait's obligations under World Trade Organization agreements a comprehensive legislation to protect intellectual property was promulgated by Amiri Decree under article 71 of the constitution. These laws were approved by the National Assembly on 23rd December 1999 as law number 64/1999 governing Intellectual Property rights. Law No. 64 of 1999 governs copyrights and provides copyright protection and penalties for copyright infringement. With respect to non-Kuwaitis, the law applies to 1) works of foreign nationals that are published for the first time in Kuwait; 2) works of Arab authors who are nationals of member countries of the Arab Agreement for the Protection of Author's Rights and published in any of those countries; and 3) works of authors who are nationals of member states of the World Intellectual Property Organization that are published for the first time in one of those states (Article 43 of Law No. 64 of 1999).   Under the Law No. 64 of 1999 protection is to be given to all literary works (written and oral), theatrical shows, musical works (with or without lyrics), choreographic works, motion pictures, audio, video and radio works, artistic works (painting, sculpture, carving, architecture and decoration), photographs, applied art (craft or industrial designs), illustrations, maps, designs and models, computer works (software and databases), and translated works. The scope of protection under this law covers but not limited to written works, works delivered orally( such as lectures, speech, religious sermons and the like) theatrical works and musical plays, musical works with or without songs, works performed by means of movements or steps and mainly prepared for direction, movie works, audio, video and radio works, photographic works, works of applied art, including Craft or industrial designs Illustrations, geographic maps, designs, plans and models related to geography, topography, architecture and science, computer Works including Software, Databases and the like, derived and translated works Trade mark Registration The international classification of goods and services is followed in Kuwait but it has not yet adopted the 8th Edition of Classification of goods and services. In accordance with Islamic mores the Trademark Law of Kuwait has no provision for the protection of trademarks covering alcoholic drinks and pork meat. Mark having no distinctive features or marks consisting of the usual denomination, description or representation of the product concerned, expressions, designs or marks that are contrary to the public order or morality, representation or imitation of public emblems, flags or banners pertaining to the state, or public offices like U.N.O or Red -cross, mark identical to the religious emblem, geographical names if their use is prone to create confusion to the origin of the goods or services thereof are not protected. Separate application should be filed distinguishing each class of goods and services. Registration can be obtained only strictly according to the general wording on the basic registration and class headings will b based on the Basic Registration. Colour marks and distribution of colours must be specified in the same manner as it is specified in the basic registration. List of goods to register should be in accordance with the basic registration, no deviation is acceptable. Any foreign documents attached to the application should be accompanied with English translation, must be translated to Arabic and should be legalized by the Ministry of Foreign affairs as well as the Ministry of Justice in Kuwait.  Requirements of Trademark Applications Application form & a power of attorney legalized up to the Consulate of Kuwait is to be submitted. Application form is to be in Arabic and should be prepared by a local attorney, a Power of Attorney should be filed along with the application, the name and capacity of the signatory/ies be specified on the power of attorney, Official seal of the applicant's company be affixed on the Power of Attorney. Power of attorney must be legalized by a Kuwaiti consul in the applicant country. A certified copy of the home registration certificate of the trademark stipulating clearly the validity term of the registration and the goods and/or services desired to be registered. (Documents other than in English or Arabic should be accompanied with a sworn English translation.) Twelve prints of the trademark for each class (preferably not exceeding 5x5 centimeters each. Additional publication charges are to be paid for a large size print). The prints can be prepared locally upon request. The prints should be in exact conformity with the form of the mark shown on the basic certificate of registration. Duration 10 years from the date of filing and always renewable for similar periods, Renewal must be applied for during the last year before expiry or within three months grace period with fine. Protection Legal protection is available through registration. Registration confers proprietary right and ownership of a mark cannot be contested after a lapse of five years from registration, provided registrant has made a continuous use of the mark. Required Time If the preliminary examination is acceptable to the trade mark office, the first official acceptance may expect within 18 months from the filing date, at least 2 years time is required for an application to register. Publication After examination, the office may request a disclaimer, if the conditions are acceptable to the applicant, the trade mark is allowed for publication in Official Gazette for three consecutive publications. If no opposition is filed within 30 days from the third publication of the Official Gazette, the trade mark is allowed to register in supplemental register. Opposition Upon publication, a trade mark application may be opposed by, the owner of a mark previously filed/registered or owner of a non registered famous mark, or any interested party who can file an opposition based on absolute reasons.Such oppositions should be supported with copies of early registration and details of use. The Registrar shall send, by registered mail, a copy of the notice of opposition to the applicant or his agent who shall, within 30 days from the receipt thereof, send to the Registrar a written counter statement (in duplicate) of the grounds on which he relies for his application, and, if he does not do so, he shall be deemed to have abandoned his application. Upon study the merits of the opposition the newly applied mark might be rejected or suspended. If two or more persons apply at the same time for the registration of the same mark or nearly identical or similar marks in respect of the same class of product or services the Registrar shall suspend all applications until an assignment approved by all parties in favour of one of them is produced or until a final judgment is rendered in favour of any of the disputing parties. Opposition must be filed within 30 days of the date of the third publication of the official gazette and no extension of days will be allowed in this case. Renewal of trademark The Trademark Law provides for a six-month grace period for late renewal of a trademark registration subject to payment of a lateness fine. A trademark, which lapses, may be re-registered in the name of a third party at any time. Additional Information Any foreign documents attached to the application should be accompanied with English translation must be translated to Arabic and should be legalized by the Ministry of Foreign affairs as well as the Ministry of Justice in Kuwait.   Patent Law No. 4 of 1962 deals with the registration of patents and industrial models in Kuwait. The Patent Office in Kuwait was opened in 1995, in response to a resolution by the Gulf Cooperation Council (GCC) states for a unified patent registration system for the member countries. The regional office for the Gulf Cooperation Council comprises of the States of United Arab Emirates, State of Bahrain, Kingdom of Saudi Arabia, Sultanate of Oman, State of Qatar, and State of Kuwait and certificates of Patents granted by the GCC Patent Office secure legal protection of the inventor's rights in all Member States. The Kuwaiti government is presently actively involved in preparing a draft law for the protection of patents to replace the existing law. In order to comply with the terms of Annex 1C of the WTO Treaty (the "TRIPPS Agreement") the law was amended per law No 3 of 2001. As per the recent amendments responsibility for patents is with the Under Secretary for Trade and Industry and the term of patents has been extended to twenty years from filing, with renewal fees being due every four years. For patents registered in foreign countries the validity period for such patent in Kuwait shall be the remaining unexplored period in the country of registration. Furthermore, new penalties for patent infringement have been adopted by the government including the possibility of imprisonment for up to two years. The new law also extends the period of protection of 'designs' for an initial period of ten years with the option of renewal for a further period of five years and  promote protection of 'utility models' for a period of seven years from filing and also provides for the protection of integrated circuits as a type of design. No examination is conducted in Kuwait for a patent application. Filing requirements: Power of Attorney legalized upto the Kuwaiti Consulate. Two copies of the specifications in English with Arabic translation. Two sets of formal drawings plus two sets without any Latin numerals or words. Certificate of Incorporation legalized upto the Kuwaiti Consulate. Assignment from the inventor(s) legalized upto the Kuwaiti Consulate. Priority document, if priority is claimed legalized upto the Kuwaiti Consulate. Assignment Requirements Power of Attorney that has been signed by the assignee and legalized upto the Kuwaiti Consulate. Deed of Assignment, signed by both parties and legalized upto the Kuwaiti Consulate. Thu, 19 Oct 2017 21:34:16 -0400 Oil & Gas Project Support http://www.arazzaqlaw.com/oil-gas-project-support-law http://www.arazzaqlaw.com/oil-gas-project-support-law Firm renders assistance in the financial configuration of domestic and international energy projects and in the negotiation of the basic purchase agreements, Shareholders Agreements, Joint Venture Agreements, Agency contracts, construction contracts, operation and maintenance agreements, natural gas and other fuel supply agreements. The firm provides such other legal service or advice in relation to the development of petroleum related assets and opportunities, as the client may, from time to time, require. The firm also provides assistance and guidance to foreign agencies and other clients on numerous regulatory and compliance issues, including the relationships between the foreign agencies and the government. In addition, the firm assists clients in transactions with such other entities like natural gas suppliers, marketers and manufacturers.     Thu, 19 Oct 2017 21:34:16 -0400 Project Support http://www.arazzaqlaw.com/project-support http://www.arazzaqlaw.com/project-support The firm provided project support for many clients involved in large-scale infrastructure projects here in Kuwait.  With experience in all facets of the industry, Abdul Razzaq & Partners is able to make a valuable contribution in all areas, including subcontracting, claims, compensation and settlement. Thu, 19 Oct 2017 21:34:16 -0400 Real Estate http://www.arazzaqlaw.com/real-estate-law http://www.arazzaqlaw.com/real-estate-law In the real estate sector, Abdul Razzaq & Partners' client list includes semi-government and private sector clients. The firm has successfully represented private real estate companies and individuals, including members of the royal family, in ownership disputes, obtaining many favorable decisions. The firm won a favorable judgment in a KD 48 million suit against a Kuwait municipality. The firm was also successful in restoring the ownership of property worth KD12 million to one of its clients.   Thu, 19 Oct 2017 21:34:16 -0400 Taxation http://www.arazzaqlaw.com/taxation-law http://www.arazzaqlaw.com/taxation-law An understanding of a country's tax code is critical to operating successfully in any country.  Abdul Razzaq & Partners has a team of lawyers who focus on income tax liability of foreign companies operating in Kuwait. The firm provides its foreign clients with advice on a wide range of tax matters including tax liability issues and tax planning. Thu, 19 Oct 2017 21:34:16 -0400 RSSNews http://www.arazzaqlaw.com/newsfeed http://www.arazzaqlaw.com/newsfeed Thu, 19 Oct 2017 21:34:16 -0400