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Find out moreWelcome to the first edition of Law Update for 2025. As we begin this exciting year, we are pleased to turn our attention to one of the most dynamic sectors in the UAE and the broader GCC region – healthcare. Over the past several years, the region has seen unprecedented growth in this sector, driven by legislative advancements, technological innovations, and the increasing focus on sustainability and AI. As such, healthcare is set to be one of the most important sectors in the coming decade.
In this issue, we explore key themes that are significantly shaping the future of healthcare in the UAE, such as recent changes in foreign ownership laws. These reforms present a major opportunity for foreign investors, opening up new avenues for international collaborations and improving the overall healthcare infrastructure. The changes in ownership laws are an important milestone, and we provide an analysis of what this means for the industry and the various players involved.
Read NowSeptember 2014
Such clauses are generally premised on the concern that upon termination of the agreement or an employment relationship, the covenanted party may walk away with company secrets, or work for a competitor, or start a business with a competitive edge gained from the terminated agreement or relationship. However, too broad a non-compete clause or CNC may prohibit a covenanted party from legitimately practising his trade or making a living. Therefore, in order to protect the parties, a non-compete clause or CNC may contain reasonable limitations as to the geographical area and time period in which the covenanted party may not compete. However, under Kuwait law, any non-compete clause or CNC is viewed as a constraint on a person’s right to work or practise their trade and as such is unenforceable both under the law and as a matter of public policy. Such clauses are governed by Law No. 10 for the Year 2007 (the “Competition Law”), which came into effect on 9 August 2009. Generally, the aim of the Competition Law is to protect economic activity from harmful practices that result in unfair competition. Under Article 4 of the Competition Law, the following activities are considered to be harmful to competition and therefore prohibited:
Applicability of the Law
Article 4 of the Competition Law provides that “Preventing or hindering a competitor from conducting business in the market” is a violation of the Competition Law. As such, a strict reading of this article infers that any non-compete clause or CNC will be invalid.
As a general matter, Article 3 of the Competition Law not only applies to unfair competition violations that take place inside Kuwait, but also those that are committed abroad and harm fair competition in Kuwait.
The Competition Law does not cover all areas of economic activity. The following areas of economic activity are exempted from the scope of the law:
Authority for Competition
The Competition Law also establishes an authoritative body, the Authority for the Protection of Competition (the “Authority”), which is tasked with engaging in a review of competitive activities and approving or denying the same. More specifically, the powers of the Authority include the following:
Furthermore, any person may inform the Authority of unfair practices.
Mergers and Acquisitions
Under the Competition Law, mergers and acquisitions, which lead to an increase in the direct or indirect control of a particular market and that control represents more than 35% of the relevant market, are subject to the review of the Authority.
If the 35% threshold is met, the process for review is as follows:
Penalties
Penalties for violating the Competition Law are set out at Articles 19 to 22 of the Competition Law. Violators of the Competition Law may be fined KD 100,000 or the amount of the illegally acquired gain, whichever is greater. If the offence is repeated, the fine is doubled. Goods involved in the activity may also be confiscated. Furthermore, the violating activity may also be restricted for a maximum period of three years.
Conclusion
Competition is a key feature of a free market and promotes innovation and growth. The Competition Law expands upon previous Kuwaiti regulations on illegal competition violations and monopoly and further protects economic activity in Kuwait from the harmful effects of unfair competition.
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