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Welcome to the latest edition of Law Update titled “Rise of Generative AI.”
In this edition, we dive into the dynamic world of Technology, Media, and Telecommunications (TMT) across the Middle East and North Africa (MENA) region. TMT continues to play a vital role in positioning the region as an international business and social hub, driving significant growth and innovation.
Our focus in this Law Update is on the sector’s ongoing potential to advance and propel the region toward a more digital economy. We explore the benefits of embracing a digital transformation and how local authorities have responded by enhancing regulations to accommodate the evolving TMT landscape.
This edition covers a range of topics, including – the new Telecommunications & Information Technology Law in Saudi Arabia, the intricacies of trademarks in the Metaverse, and the legal challenges faced by the video game industry. Additionally, we take a regional perspective, discussing jurisdictions such as Kuwait, Saudi Arabia, UAE, Oman, and Bahrain to provide a comprehensive understanding of the TMT landscape.
We hope you thoroughly enjoy this packed issue of Law Update, filled with captivating articles that address key legal issues within a vital sector for the region.Read the full edition
Essam Al Tamimi - Chairman - Private Client Services / Arbitration / Litigation / Family Business
July – August 2014
It allows parties involved in settlements, compromises, negotiations and mediations the right to make offers and concessions in the interest of resolving a dispute without harming (prejudicing) their formal positions. The opposing party will be forbidden from referring to the without prejudice communication in the court proceedings, except perhaps when the issue of costs is being decided.
Many legal systems recognise the value in allowing such communications. It enables parties to enter into frank and open discussions, encouraging settlements that save both the parties and the courts time and money. In common-law countries the concept is well established and relied on by parties, whereas it has only gradually emerged in some civil law countries.
The United Arab Emirates is unique because although the UAE is governed by a civil law system, it has established the Dubai International Financial Centre (“DIFC”) which operates according to a common-law system with its own laws, regulations, independent judicial authority and courts. In the DIFC Courts the concept of without prejudice communication is upheld and relied on by parties.
Without prejudice communication is not however recognised or referred to before the UAE local courts. Therefore documents marked “Without Prejudice” and specifically used for the purpose of settlement throughout the negotiation process can be submitted to the court and later relied on if a settlement is not achieved. Consequently, the expatriate adaptation of using the term is closely linked to the idea of good practice, rather than the term being relied on in the local UAE courts. Additionally, communications that are “off record” also have no legal implications and can be referred to in proceedings.
Although the UAE courts do not recognise the concept of without prejudice communication, there are alternative solutions which can be utilised in order to ensure correspondence cannot later be relied on in legal proceedings. The alternatives are summarised below.
1. Pre Settlement:
2. Post Settlement:
Submit all documentation, notes and comments to the Notary Public (who most likely is a lawyer) because they are also bound by the ethical duty of confidentiality as per the professional conduct handbook (article 42).
The Without Prejudice rule is not absolute and is subject to many exceptions, even in common-law jurisdictions where the courts may ignore the principle if it is in the interests of justice. For example, the parties settling a dispute might at a later stage disagree over the interpretation of a clause in the settlement agreement, or fail to honor the terms, which might necessitate a court reviewing the otherwise privileged material. Parties might also agree to waive the legal privilege for some reason, or it might be that an issue of public policy arises or the matter becomes subject to fraud or criminal allegations. Moreover, any statement or admission contained within the document in question that is unrelated to the settlement subject or negotiations will not be covered by the privilege.
‘Save as to costs’
In common law jurisdictions communications are often marked “without prejudice save as to costs”. This term means that the privilege applies until the court delivers judgment. After judgment the court will consider awarding costs to the successful party. In certain jurisdictions the courts have a wide discretion to order one party to pay the legal costs of its adversary. The court is entitled to review the without prejudice offers made during the proceedings when determining the cost order it makes. Additionally, if a party can show they made an offer more favourable than that awarded by the court, they can claim they should be awarded a portion of legal costs even if they were unsuccessful at trial. By marking the correspondence ‘without prejudice save as to costs’, that party is informing the other party that it reserves the right to rely on the communication when the issue of costs falls to be decided.
Unlike the Without Prejudice concept, the confidentiality of documents and correspondences can be relied on in the UAE. Confidential communications cannot be disclosed without the party’s consent and the party receiving the communications may be under a fiduciary duty in relation to the information. The scope of confidentiality is however vague, especially if it is to be applied outside the concept of the attorney/client relationship. What has been established under the UAE’s advocacy laws and a number of cases in the UAE is the existence of a confidential obligation and liability between the client and the attorney. However, it is not clear under the UAE’s laws and in most Middle Eastern countries whether responsibility for confidentiality exists between attorney and attorney or between the parties in any correspondence or dealing.
There is no law in the UAE which upholds that it is a duty to respect confidentiality especially when a document is marked confidential or to hold a person responsible for using documents in court or arbitration or to even rely upon anything that is marked confidential.
There are however, two exceptions as follows:
1. If the documents were obtained fraudulently or stolen
In such cases the other party may rely on the fact that the documents were stolen or fraudulently obtained and stop the person relying on the document’s confidentiality. However, the offence is not that they have used confidential documents but that the documents were obtained illegally.
2. In the event one of the parties was entrusted with confidential information because of his/her profession or position
Article 379 of the UAE Penal Code may apply in this case. The article states the following:
“[A person shall] be sentenced to detention for a minimum period of one year and/or to a minimum fine of twenty thousand Dirhams, whoever by virtue of his profession, craft, position or art is entrusted with a secret and divulge it in cases other than those allowed by law or if used for his own personal interest or for the interest of another person, unless authorized by the confiding person to disclose or use it.
The penalty shall be imprisonment for a term not exceeding five years where the perpetrator is a public servant or a person in charge of a public service who was confided the secret because or on the occasion of discharging his duties or performing his service.”
The Dubai Court of Cassation in Criminal Appeal No. 262/2009 dated 12 July 2009 ruled that there are four elements for disclosing confidential information that must be satisfied in order for the act to be considered a crime under Article 379:
If a person wishes to rely on confidential document during a confidential process (such as mediation or arbitration) it would be advisable to make reference to Article 379 of the UAE’s Criminal Law when doing so. This will ensure that the recipient is aware that it would likely be a crime under the UAE Criminal Law for the recipient to disclose the document to others.
It also advisable for a party to seek legal advice when engaging in settlement negotiations to ensure that statements are not made which may later prejudice any court case.
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