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Mohammed Al Dahbashi to speak on the panel at the UK-Middle East Legal Services Week

Join, Mohammed Al Dahbashi, co-founder and managing partner of ADG Legal as he speaks on a panel discussing dispute resolution on Tuesday 6th July. The panel host will be Mark Watson-Gandy, Barrister at Three Stone, and other panelists include Sajid Suleman, Barrister at 36 Commercial, Rania Tadros, Partner at Ince and Claire Miller, Partner at Beale & Co.


This session will be one of many in the upcoming UK-Middle East Legal Services campaign, led by the Ministry of Justice, their first-ever ‘UK-Middle East Legal Services Week.’ This will bring together a number of keynote speakers from across the Uk and the Middle East to share knowledge in a number of panel-led discussions and seminars and will be taking place between 6 to 8 July 2021.

The event will be hosted by Lord (David) Wolfson of Tredegar QC, so join us for an engaging and insightful programme of tailored panel-led discussions and seminars that bring together leaders in their respective fields of legal expertise from across the UK and Middle East. Find out what the biggest market trends are for the region in sectors ranging from infrastructure to technology and discover how you can access new jurisdictions to expand the partnership and collaboration opportunities for your business.


Find out more about the ‘Legal Services are GREAT’ and register for the event here

ADG Legal Partners with Evolvin’ Women to Drive Women Empowerment

ADG Legal has signed an agreement with Evolvin’ Women, a social enterprise dedicated to the empowerment of women in developing countries and help advance the skill development of women in the private sector.


As a part of the two-year partnership, ADG will assist Evolvin’ Women in promoting their program with the global private sector, with a view to securing work placements and training opportunities in other countries for the Evolvin’ Women participants.

In addition, the ADG will host legal workshops for the Evolvin’ Women team and provide the social enterprise with legal counsel and support when required.

The aim of the partnership is to promote social responsibility in the private sector by involving organizations in solving women’s development and gender inequality issues, as well as to socially and economically empower women under the Evolvin’ Women program through international experience and exposure.

Mohammed Al Dahbashi, Managing Partner, ADG Legal: “We are honored to work with Evolvin’ Women – an organization which is driving social change through strategic collaborations to transform the lives of underserved women. We look forward to playing our part in taking this movement forward and shining a spotlight on the role every company – no matter how big or small – can play in improving societal development by supporting humanitarian causes.

Vimbai Hungwe, Chief Operating Officer, ADG Legal: “Evolvin’ Women has proved that social responsibility is not mutually exclusive to large corporations, every company can make a difference. The program is giving the private sector an opportunity to make a positive social impact. We are proud to become a part of Evolvin’ Women’s initiative and we will use our network and influence to advance socially aware economic models that empower under privileged women.

Assia Riccio, Founder, Evolvin’ Women: “We value the support from the private sector as it helps us grow and achieve our aim of elevating the livelihoods of women from developing areas by enabling them to reach their full potential. ADG Legal’s commitment to women empowerment coupled with their strong international and local presence will bring attention to the Evolvin’ Women cause from the global private sector as we look forward to welcoming more organizations in our quest to advancing social responsibility and gender equality.

For more information about ADG Legal, visit ADG

For more information about Evolvin’ Women, visit Evolvin’ Women




DMCC Crypto Centre to Revolutionize Digital Currency

The world’s largest Cryptocurrency, Bitcoin, hit another milestone last month as it reached a record high of sixty thousand dollars. The currency is becoming more and more of a major factor in the financial market each day and is garnering the attention of big banks and governments. And Dubai is set to lead the way with the Dubai Multi Commodity Centre (DMCC) Crypto Centre making it safer, easier, and more efficient to trade in Crypto Assets.

The Crypto Centre is a comprehensive ecosystem for businesses operating in the cryptographic and blockchain sectors. It will be the hub for the development and application of crypto and blockchain technologies. Offering a home to all types and sizes of crypto businesses, from the listing, offering, issuing, and trading of crypto assets by firms to companies developing blockchain-enabled trading platforms.

This is all part of the UAE government’s Blockchain Strategy 2021, wherein the government plans to digitize 50% of government transactions into a blockchain platform by 2021 using cryptographic and open-source technologies and therefore become the world’s epicentre for crypto investments.
DMCC announced the launch of the DMCC Crypto Centre on Monday (24/05). The Centre will offer co-working spaces to crypto entrepreneurs and SMEs and a range of incubator and accelerator programmes, all within the DMCC’s Jumeirah Lakes Towers district.

The Centre is located at the prestigious Almas Tower a cutting edge 68-storey, skyscraper. It will also house a leading crypto advisory practice led by CV Labs, who were behind Crypto Valley, the Switzerland government-backed crypto community, where crypto leaders Cardano and Ehtererum originated.

DMCC has collaboratively developed a solid, progressive and supportive regulatory environment for crypto firms operating in Dubai. Activities conducted within the Free Zone that include the exchange of crypto assets will be regulated by the UAE’s Securities and Commodities Authority (SCA). Crypto firms will also benefit from DMCC’s business regulatory framework, which increases the ease of doing business whilst upholding robust governance and transparency.

As with most new financial products, Cryptocurrency comes with risks, price volatility, hacking and security all need to be considered as the tech is being developed. It also raises a spur of questions such as ‘What will be the impact of Cryptocurrencies on the banking system?’
Ahmed Bin Sulayem, Executive Chairman and Chief Executive Officer of the DMCC gave his assurance that this would not be overlooked, in an interview saying: “Confidence, Trust and Security, this will not be launched without covering all bases.”

The benefits of understanding the current crypto asset climate cannot be overstated. We are poised at a unique time in human history due to technological, cultural, and social development in the last century. With China introducing its own digital currency last month, the digital Yuan controlled by its central bank, which will issue the new electronic money. Bankers and other analysts have stated that Beijing aims to digitise all its money eventually.

For those wishing to either set up a company and/or trade in crypto assets in the UAE and legal advisory services, please contact us at ADG Legal:

Contact number: +971 4 4441 2031




With a Covid pandemic still looming and EID fast approaching, a time of celebration and gathering for many worldwide, and safety being a key concern for both Muslims and non-muslims worldwide, let us have a look at UAE Eid Al Fitr Covid Laws for this year. 


The battle with Covid 19 had been ongoing for over a year now with the declaration by the World Health Organization on the 30th of January 2020, of the outbreak of a Public Health Emergency of International Concern, and a pandemic on 11 March 2020.


Over a year later there have been three million casualties worldwide, with 1,610 in the UAE as of the 8th of May 2021. This caution is heightened by a recent outbreak in India which has led to between 300,000-400,000 new reported cases for the last two weeks.


The UAE has handled the pandemic very well and this is due to a prompt and efficient response by the authorities involved. These measures though valid, have led to some outcry with some 84,253 appeals to penalties imposed for Covid-19 safety violations in 2020, according to the UAE Public Prosecution. And 4,210 fines in Abu Dhabi in one week.


To avoid fines during this festive period we have outlined the measures posed by Government for this year’s EID celebration:


  • The National Emergency Crisis and Disaster Management Authority (NCEMA) announced on Tuesday, May 4th: UAE residents have been told to avoid family visits and gatherings during EID Al Fitr. Celebrations must be restricted to members of the same family living in the same house.
  • Greetings must be exchanged via electronic means of communication and not in person.
  • Neighbours and family members must not give each other gifts or share food.
  • The tradition of giving cash or gifts (Eidiya) must be avoided. If they must, cash must be transferred to bank accounts.


Considering all this we would just like to applaud the UAE’s efforts in handling the pandemic and due to the preventive measures it has taken since the outbreak of the pandemic, it has managed to deal with the pandemic effectively and efficiently while ensuring the continuity of business activities and community affairs.


The UAE is ranked 8th globally and maintained its 1’st ranking among the Arab countries on Bloomberg COVID-19 Resilience Ranking Index.


EID Mubarak, ADG wishes you all a very happy and peaceful EID.

Crypto Assets in the UAE Regulations

Can you trade cryptocurrency such as Bitcoin in the UAE?


A new decision by the Securities and Commodities Authority (SCA), being ‘The Chairman of the Authority’s Board of Directors Decision No. (23/R.M) of 2020 Concerning Crypto Assets Activities Regulation’ dated 01 November 2020 (Decision), dealing with Crypto Assets in the UAE was published a few months earlier. For sake of brevity, we offer an outline of the decision in this piece.


Essentially the Decision offers guidance on how Crypto Assets may be regulated in the UAE, including who can offer services, who can be offered the services in the UAE, and operation and guidelines for Crypto Asset activities. Whilst the Decision sets out the federal regulatory framework to deal with Crypto Assets in the UAE (both mainland and financial free zones), the Financial Services Regulatory Authority (FSRA) of the Abu Dhabi Global Market (ADGM) had launched the region’s first comprehensive crypto asset regulatory framework in June 2018. Since then, the ADGM has emerged as the preferred hub for crypto asset activities in the region.


Initially, the UAE did not adopt a system to regulate previously issued cryptocurrencies as the term ‘cryptocurrency’ was unknown to many UAE residents before 2008-2009. However, the UAE has since grown to become one of the best ecosystems today for cryptocurrency activities worldwide.


These changes have largely come about due to the UAE government’s Blockchain Strategy 2021, wherein the government plans to move 50% of government transactions into a blockchain platform by 2021 using cryptographic and open-source technologies. In pursuance of the Strategy, the government-owned licensing firm Kiklabb now allows clients to pay for their visa and trade license fees using cryptocurrencies.


The cryptocurrency (a form of Crypto Assets) market is currently valued at over USD 1T. Even at such a unique time in history characterised by the global pandemic and ambiguities in the financial sectors, cryptocurrencies continue to thrive, with Bitcoin recently growing past the USD 50,000-mark.


Now is the best time for intrepid investors to understand the laws surrounding crypto assets in the UAE. Sue to the progressive and innovation-driven outlook of the UAE’s government, the crypto assets’ space is fast changing.

SCA Decision for Regulations of Crypto Assets Activities:


The high-level outline of the Decision (available online) is below:


  • Who these laws apply to


  • What is defined as Crypto Assets


  • Who can offer Crypto Assets


  • Who can Receive Crypto Assets


  • Key takeaways from the Decision


Who these laws apply to


  • exchanges


  • marketplaces


  • fundraising platforms


  • custodian services


  • any person who conducts financial activities in respect of crypto assets


What are defined as Crypto Assets


The Decision bases the definition of Crypto Assets broadly as ‘a record within an electronic network or a distribution network that acts as a medium of exchange, storage, unit of account representation of ownership, usufruct that can be transferred electronically from one person to another through the operation of a computer programme or an algorithm governing its use.’ Recognizing that there could be different forms of Crypto Assets in the market, SCA vide the Decision extends the definition of Crypto Assets to include commodity tokens and security tokens.


Who can offer Crypto Assets


To offer Crypto Assets (or any related services) there are two requirements:


  • Provider must be incorporated onshore within the UAE or any of the UAE’s financial free zones.


  • Providers must be Licensed by the SCA.


Who can Receive Crypto Assets


Two classes of people can be offered Crypto Assets in the UAE.


  • Qualified Investors:


  • Institutional investors such as federal government, local governments, government institutions and authorities, foreign governments and their institutions or the companies fully owned by any one of the aforementioned; international bodies and organizations, who meet at least two of the following requirements:


  • Hold assets worth more than AED 75m.
  • Have a net annual revenue of AED 150m.
  • Have a net equity or paid-up capital with a minimum of AED 7m.


  • Individuals who hold AED 4m in funds and have an annual income of no less than AED 1m, and can verify that they possess sufficient knowledge and understanding about the risks of investing in crypto assets.


  • Others, those who do not meet the eligibility criteria as a Qualified Investor (with SCA’s prior approval).


Key takeaways from the Decision


  • Before approaching a qualified investor, Licensees must file documents with the SCA in advance of offering crypto assets to Qualified Investors. In all other cases, licensees must request prior approval from the SCA before offering crypto assets to non-Qualified Investors.


  • Licensees may ‘passport’ the listing of crypto assets on one or more cryptocurrency exchanges.


  • Strict provisions govern the use of subcontractors and employees working for crypto asset providers, custodians, escrow companies and other contractors insofar that they must possess the requisite skills and experience to perform their roles.


  • Licensees may appoint subcontractors but will bear the risks and liabilities stemming from any breach of the Decision committed by their subcontractors. For this reason, the Decision requires licensees and their subcontracts to formulate a detailed service level agreement spelling out the division of responsibilities between both parties relating to cybersecurity and data protection.


  • According to computing and data residency rules, any computer systems or cloud computing facilities must be located by service providers onshore within UAE using international standards. Typically, this is to entail service providers (or their subcontractors) being able to demonstrate compliance, at the very least with ISO9001 and ISO27001 and cybersecurity standards laid down by the UAE’s Federal Government.


  • In the case of service providers who use offshore servers or public cloud facilities to encrypt, store, process or transfer crypto assets, or personal data, the SCA’s Decision requires such providers to utilise onshore cloud computing services to provide parallel backup and disaster recovery facilities.


  • The SCA clarified that it has full powers to audit licensees and to monitor online transactions. In the event of any breaches, the SCA has wide-ranging powers to impose fines, suspend or withdraw a licensee’s right to offer crypto assets and publish the names of violators.


Due diligence

For anti-money laundering compliance and ‘know your customer’ checks on potential investors, the Decision clarifies that all customers must be classified and assessed as if they were a ‘high risk’. This broadly translates into conducting ‘enhanced due diligence’ into a customers’ source of funds, ultimate beneficial ownership structure, political exposure risks, the potential risks of customers being used as conduits for money laundering activities and any geographical risks presented by customers, their directors, shareholders and associated suppliers and intermediaries.


For more information on Crypto Asset guidelines in the UAE please contact us at ADG Legal:


Contact number: +971 4 4441 2031



Written by Mahdi Eldaw and Kostubh Devnani.



UAE Ramadan 2021: Dubai and Abu Dhabi Ramadan and Covid Laws

Ramadan celebrations last year were largely disrupted due to the strict pandemic measures in place but how will 2021’s Ramadan fare with measures for the pandemic still in effect, albeit slightly alleviated?

Beginning today, Tuesday 13th April, let’s have a look at government measures that will affect Ramadan this year: 

Ramadan Covid 19 Guidelines:

  • Mosques will be open this year but they must be sanitised before and after prayers.
  • Mosques can open at 50% capacity for all but Friday prayers, which are limited to 30% capacity.
  • To prevent the spread of covid-19, there will be no iftar tents or banquets outside mosques, or anywhere else.
  • Taraweeh, the prayers after evening prayers, will be conducted under the same safety measures, including capacity limits and compulsory masks.
  • Attendees must take their own prayer mats and copies of the Quran.
  • Different families cannot celebrate iftar together. Iftar and suhoor should be shared only with others in the same households; wider family gatherings are prohibited.
  • Majlis should be avoided.
  • Dubai Islamic authority has cancelled all permits for Ramadan tents this year and the setting up of tents or outdoor areas to distribute free iftar meals is prohibited.
  • Those interested in donating iftar meals to workers should contact the manager of the housing and a restaurant to arrange the distribution of packed meals, as meals can be distributed only in labour accommodation this year.
  • Restaurants cannot distribute food in or outside the premises.
  • Authorities will be conducting intensive inspection campaigns and action will be taken against offenders.
  • The elderly with chronic diseases that place them at high risk should continue to avoid public places.
  • Masks should be worn at all times anytime one is outside the home.
  • In the last ten days of Ramadan the situation will be reassessed, and restrictions may be eased.

Immunise Against Construction Disputes: A Guide to Better Dispute Outcomes

The construction industry in the MENA region is suffering from difficult times. The saturation of Coronavirus-related commentary distorts the reality that Coronavirus is simply exposing the real and pre-existing difficulties faced by the industry.

While Coronavirus did bring limited disruptions to supplies and labour, progress on most contracts largely continued unaffected and Coronavirus-related claims have fallen into the general mix of claims. The result is that most causes of disputes have and will remain the old favourites, being delay and variations (performance bonds are featuring also and we will be addressing this in our next webinar).

We expect the next 12-18 months to bring a significant increase in the number and magnitude of disputes in the construction sector. This article is intended as a road map to avoiding the litigation / arbitration train and securing better outcomes when major disputes cannot be avoided.

Approaching Final Account – A Typical Scenario

Let us assume a typical scenario – a mixed-use commercial/residential tower, with a FIDIC Red Book 1999 as the base contract document. It is 90% complete and the ‘Time for Completion’ has lapsed. The Contractor has claims for delay but has not made any formal delay submissions. There are variations both positive and negative, only a few have been recorded formally by the issue of VOs, but none have been assessed or determined. The Employer has failed to pay the last five interim payment certificates and the Contractor is financially squeezed to pay subcontractors and keep them on site.

The Contractor needs to be able to shore up its position as the Employer is threatening to claim delay damages and encash the performance bond.

On the other hand, the Employer is concerned over the quality of the work, given the Contractor’s financial troubles, the ability of the Contractor to complete, and not overpaying the Contractor should the interim certificates be paid and then its claims exceed the retention and performance bond held.

Back to Basics

First, some broad truisms about disputes:

  • Don’t make vague and unsubstantiated claims.
  • Don’t pull a gun unless you intend to shoot; making a threat without being sure of your grounds before proceeding can destroy a relationship, whether it is threatening suspension or encashing of the bond. Don’t become the boy who cried wolf.
  • Only present legitimate (i.e. arguable) claims. Otherwise, you will be seen as ‘claims aggressive’ which is, again, a credibility issue.
  • If the contract requires notices to be given to preserve your rights, give the notices. If you receive such notices, do not consider them as acts of aggression or hostility; they are only given because they are required.
  • Developing a ‘best friends’ relationship on the other side is to be welcomed, but not at the expense of maintaining the project management principles discussed below.
  • Don’t place too much weight on a relationship with a specific person on the other side; there is no guarantee they will be there at crunch time. And, even if they are there, as soon as other departments or external consultants become involved their hands may become tied.
  • Giving unachievable assurances will inevitably cause the project to spiral toward dispute.

Contract is Key

Remember the starting point in the UAE is that the contract is your law. 

Of course, there is also the backdrop of the Civil Code which affects how the law is applied and what outcomes will be from certain facts, in particular the obligation of good faith, especially in administering the contract. Operating successfully in such an environment relies on implementing and following good project management practices.

As always, the onus is on you to prove your claim. As such, it should be no surprise that the lack of proper records or accessible records is usually the biggest obstacle to mounting or defending a claim. The key is not to produce records for their own sake but for establishing cause and effect, i.e.:

  • what effect did the event have on the direct or other work faces?
  • was labour reallocated for that time?
  • what mitigation measures were considered and taken?

Records must also be accessible. Keeping records on personal laptops and mobile phones is not good practice. Trying to retrieve WhatsApp conversations may be impossible.

After a project is completed, it is difficult to keep all the relevant staff or witnesses around. Good records assist with not having to rely on fading memories as to what a note meant or the impact of an event.

Importance of Notices

Notices are not just a matter of convenience, they are essential requirements of FIDIC clause 20. You may recall that, where a delay is concerned, the general sequence of notices is:

  • Notice of delay within 28 days of the occurrence of the event;
  • A fully detailed claim within 42 days of occurrence;
  • A further 42 days for Engineer approval or disapproval (but not necessarily a final determination).

It may seem straightforward to comply with this, but it can be very onerous, especially where there is ongoing delay and it remains to be seen how much it will delay completion. Rarely do contractors or employers deal with this situation well.

Our advice is that contractors should keep sending the update letters but quality, not just quantity, is important. Where the delay is ongoing it must set out a range of things, namely:

  • which activities cannot be commenced?
  • how many days is that activity delayed by?
  • what impact will this have on completion? The most recently updated program should be used to conduct at least a rudimentary analysis.
  • what have you done to mitigate this? Have you dedicated resources to other work fronts? Have you demobilized any resources? Were you able to re-sequence in any way?

While you may arrive at a different delay duration after the event, when you can have a delay analysis done properly, it will be very difficult to challenge the underlying facts feeding into the analysis if the progress, and all steps taken, were documented as and when they were occurring.

At worst, it should narrow the scope of the dispute substantially and this will make a big difference on whether you can avoid an arbitration.

The Contractor’s View

A major difficulty is that there are no time frames prescribed for the Employer or the Engineer to act regarding determinations and assessments of variations and EOTs under the Red Book. The Contractor is still obligated to follow the instructions by the Engineer given under Sub-Clause 3.1 and 3.3. This leaves the Contractor to argue that the Engineer should have issued a variation or extension but failed to do so – a breach by the Employer.

With the project nearing completion, yet with numerous claims on the table, a Contractor can face a crossroads of sorts. Cash flow can be at its tightest point, yet throwing all resources towards completion is usually seen as the best solution. However, Contractors should always pause to contemplate – is there any reason to think the Employer will treat my claims more favourably post-completion? The answer is probably no.

A Contractor’s Next Steps

Naturally, a balance needs to be struck between wanting to be friendly and co-operative with the Employer on one hand and being professional and properly protecting your rights on the other.

The following are key:

  1. The program: Keep the program up to date and relevant. If there are changes, note why those changes have occurred and particularly any updates to linkages between activities.
  2. Progress reports: Ensure progress reports are completed, containing relevant details and not just simple fact recording; add analysis where it is needed on causes and consequences.
  3. Outstanding information: Where there is outstanding information, follow up with the Engineer with RFIs. The Contractor should also respond to the RFIs issued by the Engineer to avoid being blamed as the cause of the issue.
  4. Suspension: Regarding the unpaid certificates which will inevitably have arisen, the Contractor should consider what rights it may have to suspend or slow down the progress of the work.

The Red Book (Sub-Clause 16.1) contains a right for the Contractor to suspend if the Engineer fails to issue interim payment certificates properly. However, the Contractor needs to be confident he is on solid ground before taking such a step. 

Consider also that the Employer bears the risk that the suspension is found to be lawful. Remember that there is no obligation to suspend if the Contractor does give the notice of intention, but credibility may be affected.

It should go without saying that the Contractor should take legal advice before going ahead with any suspension.

  1. Third-party review: Consider getting an independent third-party audit of the claim. This does not necessarily have to be a full-blown analysis including liability and quantum but it is worthwhile spending some time on testing the assumptions that have been made. Often, those too close to the trenches may form views based on the need and pressure of cost minimisation and without the benefit of a cool and unbiased head.

The Employer’s View

For the Employer, the following items are generally on the table:

  • Claims for delay damages.
  • Claims to come from the Contractor.
  • Possible claims for negative variations and defect claims.

There may also be a concern over the ability of the Contractor to complete.

Employers should consider the following:

  1. Unlike Contractor claims, there is no strict time bar clause for making Employer claims, such as under Sub-Clause 20.1. Rather Employer claims are to be made as soon as is practicable under Sub-Clause 2.5.
  2. Despite the lack of a strict time bar, check that pre-conditions for claims have been met, e.g. the pre-condition under Sub-Clause 8.7 for levying delay damages being the Engineer’s determination under sub-clause 3.5.
  3. The unenforceability of delay damages (where they have liquidated sums under the Contract) does not remove the right to claim damages generally if liquidated sums are challenged under the Civil Code, so the Employer may need to be able to establish actual damages suffered due to the delay. Again, this highlights the need for proper records on the effects of delay.
  4. Whether to have all variations assessed and determined where a dispute is pending, particularly where the determination will be a rejection of the Contractor’s claim or the issue of a negative variation.
  5. Where there is defective work, ensure that the Engineer has issued the required notices to remedy that work. These are pre-conditions for the Employer’s right to recover or take-out. In our experience, these procedures are rarely followed properly.


As the project nears completion, in many cases the Contractor holds more leverage than he previously has. But this is not true in all cases. There can be a fine balance between cutting losses and opening exposure to hefty damages.

On the Employer side, consider:

  • Low risk of damages claims if you terminate invalidly, given that there will probably be minimal, if any, profit left for the Contractor.
  • Under UAE law, should the Contract be terminated before works are completed, the secondary obligation regarding payment of delay damages may fall away and be unenforceable.
  • There is still the performance bond and retention.
  • Administrative problems of procuring a new contractor to complete.
  • DLP is wiped by termination.
  • Approvals are still needed.
  • Possibility of engaging subcontractors directly, which is not permitted under Red Book per se but can be done successfully if managed properly.

On the Contractor side, consider:

  • Low additional risk if you suspend or terminate as a potential claim for the ‘additional cost to complete’ is comparatively minimal.
  • Risk to performance bonds and retention.

Joint Non-Binding Opinion – Last Stop Before Arbitration?

Where there has been no compromise, negotiations will likely commence as a pre-cursor to arbitration. This will usually involve some members of senior management weighing in.

Typically, this will narrow down some of the issues, and hopefully, the major ones. But where there is no solution that both sides can live with, are there any options left to avoid a costly and drawn-out dispute?

If, as will commonly be the case, there is no DAB process, then consider proposing that the parties jointly appoint an independent expert for a non-binding opinion before negotiations. While we are not generally in favour of non-binding procedures, if they are limited in scope and time, they can help give the reality check that is needed. It is open for the parties to agree that neither of them can call that expert in any later arbitration.

Should I Move First to Request Arbitration?

This is a commonly asked question in circumstances where claims are or will be flowing in both directions.

Getting in first can bring considerable advantages. Why? Because the Claimant has better control of the timetable.

There is very little time to prepare a response, especially if you lead with a fully detailed Statement of Case, rather than a brief Request for Arbitration. Your opponent will also be under cost pressure from the outset. Their lawyers will have to get up to speed rapidly, which will come at a cost.

Naturally, though, the availability of this option is only as good as your preparation.

Having some form of independent expert analysis is ideal, particularly for EOT claims. If you do the reality check early on, you can avoid spending money developing a claim which had no merits to start with.

Last, it should be remembered that it is also possible to arbitrate while the project is ongoing, usually on a discrete matter. While this is often considered a nuclear option (or at least premature), there is nothing to stop it in principle. Again, it depends on the quality of your preparation and the dynamic of the relationship.

If you would like to discuss any dispute avoidance strategies or any live dispute issues, please contact Josh Kemp ( or Scott Lambert (

UAE Announces 100% Foreign Company Ownership

On Monday, the UAE government announced an exciting new reform on the Commercial Companies Law, allowing foreign investors 100% business ownership, effective 1st December 2020.

For decades, most foreign investors in the United Arab Emirates (“UAE”) engaged in commercial trading were under an obligation to be partnered with a UAE national to legally operate their businesses within prescribed areas of the country. This week, a phenomenal reform was introduced by the President of the UAE, His Highness Sheikh Khalifa bin Zayed Al Nahyan, which changes the course in which the UAE is moving.

Under Federal Law No. 8 of 1984, which was effectively replaced by Federal Law No. 2 of 2015 concerning Commercial Companies Law, most foreign investors setting up a limited liability company were obligated to enter into a partnership with a UAE citizen. In such a partnership, the UAE citizen would dominate, holding at least a 51% stake in the company. Now, the new decree abolishes the former business structure and introduces the long-awaited reform.

However, whilst the new reform replaces the old law on the federal level, it simultaneously confers powers to local authorities (i.e. each emirate) to determine exceptions, perhaps based on specific business activities. It will take some time for such exceptions to be announced so the idea of complete ownership is still yet to be confirmed in practice and application within each emirate.

Although the exceptions to the new reform are yet to be announced, foreign investors should take time to consider the possible implications of this change on their existing side agreements, nominee agreements or any other ancillary agreements, whereby their local partner has been remunerated in the form of a fixed fee or other alternative arrangements. For existing businesses, there will be multiple factors to consider before deciding whether to make changes or not.

The new reform demonstrates the UAE’s eagerness to advance in respect of the many commercial and investment opportunities that the country has to offer and this is certainly promising news for anyone looking to set up a new business in the UAE. However, for existing foreign investors, we caution great care and not to hasten in abrogating existing business relationships.

If you would like assistance in reviewing any existing agreements concerning company ownership, or you are looking to set up a new business in the UAE, get in touch on +971 4 441 2031 or by email at


Written by Bahriddini Sultan

Egypt’s Economic Transformation

ADG Egypt Series Part 1: Logistics, Manufacturing, Agriculture and Healthcare

Written by Josh Kemp, Dina Assar and Shams Elkodama
June 2020

After several years of instability in Egypt which has brought difficulties for its economy, the country is experiencing a resounding recovery. It has become one of the fastest-growing economies in the region, as the IMF reported that GDP increased from 5.3% in 2018 to 5.6% in 2019. Projections for the 2020-21 fiscal year also remain strong, despite recent events.

Indeed, given the slowdown in the region’s mainstay economies such as the UAE and Saudi Arabia, it is inevitable that Egypt will resume its place as one of the leading economies in the MENA region. The country can maintain that trajectory by strengthening its long-held competitive advantages – its strategic location and intersection with the Middle East, Africa and beyond. Further, revitalising and expanding its infrastructure, including by drawing in more private investment, will play a pivotal part in reshaping its economic progress.

In this first instalment of our multi-part series on Egypt’s growth and opportunities, we take a look at various projects and initiatives across the logistics, manufacturing, healthcare and agriculture sectors, which are tipped to drive Egypt’s growth towards 2030 and will be of interest to investors and practitioners.

1. Suez Canal Economic Zone (SC Zone)

Launched in 2015, the SC Zone was established as part of Egypt’s sustainable development strategy, Vision 2030.

The SC Zone consists of six ports and four industrial zones scattered along the waterway, through which passes almost 10% of world trade, or 18,000 ships a year.

These infrastructure upgrades are aimed towards attracting foreign investment, especially to the country’s fast-growing manufacturing industry, and to transform the Canal area to a global hub for logistics, maritime services, information technology and power industries. The Government has also spoken of its intentions to create an investment arm to channel funds to projects along the Suez Canal, engaging in partnerships with developers, lending and investment banks.

The overall infrastructure project includes a new city (New Ismailia City); an industrial zone; seven new tunnels, improving the existing port infrastructure; and a new canal parallel to the Suez Canal.

The main projects in the SC Zone are at various stages of completion. For example, those recently completed include:

• The two tunnels in Ismailia, which were completed in May 2019.
• Five out of the seven tunnels have been completed, as of 25 April 2020. Most recently, 22 April 2020 marked the opening of the Martyr Ahmed Hamdy Tunnel 2, the two-way tunnel in Suez.
• The Port Said tunnel, completed in November 2019, shortening travel time across the Suez Canal. A trip which previously would have taken days, now takes between 10 to 20 mins.

Some of the zone’s ongoing major projects include:

i. Ports, Transport and Logistics

• Upgrading ports at Adabeya, West Port Said, al-Tor and al-Arish to meet the expected increase in volumes.
• The remaining tunnels to connect the Sinai Peninsula to the Egyptian homeland.
• A new container terminal in Abu Qir port by China’s port operator, Hutchinson Ports.
• DP World’s US$520million container port and container yard Basin 2 is expected to become operational in Q2 2020. The project will nearly double the capacity of the port to 1.75million TEUs per year.
• Construction of Egypt’s first RoRo terminal at East Port Said, by a consortium led by Japan’s Toyota Group. The project scope includes a 600-metre quay and a new 21.2-hectare terminal.
• A US$7billion Russian industrial zone of 5.25m square metres in the SC Zone. The project will be completed in three phases and is expected to be fully operational by 2031.

ii. Power and Water

• Several additional water desalination and electricity-generating plants, to be carried out to 2025.

iii. Tahrir Petrochemical Complex (TPC)

The TPC is a circa US$10 billion project for the construction of a 1.5 million tonne-per-year (t/y) ethylene cracker and a polyethylene facility with a capacity of about 1.4 million t/y, as well as other major petrochemical products. Once completed, it will be the largest naphtha cracker plant in the world, with access to key markets such as Sub-Saharan Africa, Asia and Europe.

Despite several delays, the contracts were signed in June 2019 for the project management consultancy (PMC) and engineering, procurement, and construction (EPC). While financial close is understood to be yet to occur, project site preparations and dredging are underway, and recent reports suggest that construction will commence by the end of 2020.

2. The Golden Triangle

The Golden Triangle project (located in the area between Qena, Safaga and Qusair) is critical for the country’s economic recovery. The project aims to establish a new industrial city through assembling a global mining, commercial, agricultural, touristic, industrial, and basic infrastructure zone.

The area is the richest in Egypt in terms of minerals – such as iron, copper, gold, silver, granite, and phosphates – and boasts 75% of the country’s mineral resources. It will offer opportunities to exploit phosphate for fertilisers, raw materials for cement produced from schist and limestone, gold ore and the production of petrol from oil shale.

65% of the project will be composed of modern industrial zones, whilst 35% will be residential, commercial, and touristic. The project will be completed in five-year phases and will be funded by international financial institutions and donors.

In January 2020, Egypt also announced its plan to construct a multipurpose plant in Safaga Port to receive general cargo ships and containers. The sea port of Safaga is considered the most important port for the African continent on the western coast of the Red Sea, and is located on the sea route of the Road and Belt Initiative that extends through the South China Sea, the Indian Ocean and the Bab Al-Mandab strait to the Suez Canal. This is in addition to its connection to a local road network that reaches Sudan through Hadraba land port.

3. Damietta Logistics Project

In 2019, Egypt’s Damietta port signed an MoU with two European companies, Eurogate and Contship Italia, to develop the largest logistics system in the Middle East. The project scope includes a container terminal, a railway line, a dry port, and a cargo distribution area. The total investment is approximately US$825million for the first phase.

The project is expected to be completed by 2022, which will position Damietta port as a critical link for the Eastern Mediterranean region, open foreign markets via direct shipping, and attract foreign investment.

4. Manufacturing Hub

The manufacturing sector is at the forefront of the Egyptian government’s substantive plans for economic growth. The newly expanded Suez Canal and its proximity to Asian, African and European markets, and a number of free trade agreements and special economic zones are key elements which make Egypt a strong manufacturing destination.

The industry has been undergoing a period of growth guided by the Sustainable Development Strategy: Egypt Vision 2030, and the Industry and Trade Development Strategy 2016-2020. Both initiatives have set ambitious goals for the manufacturing sector, including increasing the percentage of GDP to 18%, increasing the manufacturing growth rate to 10%, and increasing high-technology exports as a percentage of Egyptian manufactured exports to 6% by 2030.

Egypt already has well-established manufacturing subsectors such as F&B, steel, pharmaceuticals, and automotive, and is well-positioned to become a premier destination for global manufacturing. Egypt’s strong economic growth (2019 being its highest) has been in part due to an unprecedented number of greenfield foreign investment projects in this sector.

Further, recent infrastructure projects aimed at improving and diversifying the energy supply in Egypt (e.g. Siemens’ megaproject connecting 14.4 GW to the Egyptian national grid and Benban Solar Park) will help significantly boost the manufacturing sector.

5. Agriculture

Agriculture remains an important sector of the Egyptian economy. It contributes nearly one-eighth of GDP, employs roughly one-fourth of the labour force, and provides the country with an important part of its foreign exchange.

Egypt’s investment in agricultural infrastructure will also assist domestically in navigating the Covid-19 crisis.

Noteworthy projects recently completed or currently being developed are:

i. The Mahsamma Agricultural Drainage Treatment Plant

A US$100million, recycling and reuse plant. This is the world’s largest agricultural drainage treatment plant (42,000 m2) and has a capacity of 1 million m3/day.

ii. Canal Sugar Project, Al Minya

Canal Sugar is an integrated Agro-industrial project with 70% Emirati investment and 30% held by Al Ahli Capital Holding. The project will incorporate reclamation and cultivation of 181,000 acres of land, making it the largest agricultural project in Egypt since 1952.

The facility will produce 400,000 tonnes of white sugar per year when it starts production in 2021 and will produce 900,000 tonnes of white sugar by 2023 once it reaches full capacity. The project will cost around US$1billion and intends to fill the domestic supply gap and render Egypt self-sufficient in sugar.

iii. Grains Terminal, Damietta

Canal Sugar, owned by Dubai-based Al Khaleej Sugar Refinery, announced in July 2019 the plan to build a pier and grains terminal in Egypt’s port city of Damietta at a cost of around US$200 million. The new terminal will have a discharge capacity of 3,000 tonnes of grains per hour and will increase Egypt’s grain export capacity.

iv. Development of Greenhouses

Egypt is currently implementing a national project to establish more than 10,000 greenhouses in an area of 100,000 hectares in Matrouh, Sharqiya, Ismailia, Fayoum, Beni Suef and Minya. It is the largest greenhouse project in the Middle East and aims to support 20 million Egyptians. The project is expected to be completed by 2021 and will provide more than 1.5 million tonnes of vegetables and fruits annually to meet the growing production-consumption gap.

6. Healthcare

With the population growing at a rate of 2.2% annually, Egypt will need to improve quantitatively and qualitatively in order to meet the growing demand for healthcare services.

The country recently laid down the foundation stone, with construction commencing on the Capital Med Healthcare City located in Badr City in Cairo. The project is being developed by Egyptians for Healthcare Service and will be the Middle East’s largest integrated private medical city.

The entire project consists of three phases, to be constructed over 7 to 10 years. The project includes a 350-bed state-of-the-art general hospital, clinics plaza, a hotel, and 11 specialised medical excellence centres. Once operational, the medical city is expected to create 10,000 to 30,000 jobs.

There is significant opportunity for foreign investment in the Egyptian healthcare sector. Key factors that make Egypt’s healthcare sector attractive are its growing (and aging) population, increasing insurance penetration, its regional reputation for medical tourism, and the shift towards encouraging private sector investment in healthcare.

Closing Comments

Egypt’s economy is among the most diverse in the MENA region. The country can continue to capitalise on strategic geographic location, low-cost and relatively qualified labour, high tourism potential, and an abundance of energy resources, to drive it forward through challenging times for world economies. The country has already adopted a variety of policies aimed in part at attracting foreign and domestic investments, such as the 2017 Investment Law and various free zone initiatives.

However, the country’s ability to exploit these advantages, and its economic prosperity will depend, in no small part, by its ability to execute key infrastructure projects.

The Energy and Transport sectors are poised for significant growth in the coming years. Our next instalment covers the plethora of planned and in-progress projects in these sectors.

If you are interested in learning more about Egypt’s economic transformation or require assistance with any related projects, please contact your relationship manager or contact Josh Kemp at

Pressure on UAE Contractors to Re-Price Projects: Hostages to Fortune?

It has been reported that UAE contractors will have to go through the price negotiation process again, as project promoters insist on re-pricing contracts because of the changed circumstances (Gulf News: ‘UAE construction sector told to re-price projects’, 11 April 2020).

The current lockdown and coronavirus-related health and safety requirements on construction projects are certainly contributing to general anxiety over the bottom lines of contractors and developers. Among other things, there is additional time spent complying with on-site precautions, such as distancing and increased frequency of cleaning and the off-site transportation of workers. All the while, ordinary running expenses of maintaining the workforce and other mandatory expenses are still being incurred.

Employers are also increasingly nervous about the post-coronavirus world; in Dubai alone, the 2020 growth forecast (Fitch Ratings) has been revised down to -2.3%, from 3.8%, and Expo 2020 has been delayed until 2021.

While it has been suggested that employers will be looking to contractors to ‘sharpen their pencils’ and reflect the so-called ‘new reality’ post-coronavirus, there is a significant cause for concern that this is a short-sighted approach. There is good reason to argue that the current imperative to reduce prices is unsustainable in the medium term:

  • Despite the ‘double-shock’ of enormous drops in global fuel demand during the outbreak, together with excess supply, oil prices are on the road to recovery. While some analysts are of the view that the recent deal for production cuts are too little, too late for an immediate-to-short term recovery, others claim that the storm clouds for oil prices will dissipate once lockdowns are lifted. The lag effect could prove positive for world economies, helping to fuel a faster rebound after the virus subsides.
  • Commercial and industrial activity appears to be picking up, as suggested by the recent increase in refinery utilisation in China, and their copper and steel inventories are beginning to fall. While it is right to approach such reports with some scepticism, if the pandemic is brought under control relatively soon, trade and output will inevitably rebound, even though a return to the pre-virus trajectory is not likely to be immediate.
  • The UAE Central Bank has announced an AED 100 billion stimulus announcement, with virtually all other GCC countries adopting similar measures. This stands to affect individuals and SMEs, and ought to cushion the fall in activity. The boost on morale and confidence has been immediate, however, the wider growth benefits are unlikely to be seen until the health crisis subsides.
  • On the infrastructure side, while the effects of the stimulus on public spending are unlikely to be seen until the pandemic subsides, a spike in government infrastructure spending packages may be utilised as a part of the economic response. For example, if countries in the MENA region were to adopt a similar approach to the US, which has announced (with apparently bi-partisan support) a USD 2 trillion package only one week after the USD 2 trillion public stimulus relief package.

Additionally, demands for price reductions based on reduced materials costs, are questionable. According to sources reported by Gulf News, UAE contractors say they are seeing no shortages of key building materials, even those coming in from China, and the prices of key materials too – cement, steel products – are as steady as they have been for some time.

Naturally, much depends on the duration of the protective measures. According to analysts, on the assumption that the pandemic eases in the second half of 2020, there should be a marked rebound in growth, albeit a return to pre-virus levels is not expected until late 2021, but the uncertainties surrounding these forecasts are extremely high. If a longer lockdown period is required, that prediction must be pushed back.

There is a significant risk to contractors agreeing on any price reduction that is fixed during this period of uncertainty. As we have seen in the past, undue focus on the (temporary) burden of un-utilised overheads and a so-called imperative to ‘keep busy at all costs’ may result in increased future losses and business failure.

Should you need help with the terms of any renegotiation, advice on how to approach a contractor for a price reduction, or if you are a contractor faced with such a demand, please contact Josh Kemp on

Written by Josh Kemp

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