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Deal by Design
Welcome to this edition of Law Update, focusing on the evolving M&A landscape across the MENA region. With deal activity and value continuing to grow, the region is seeing increased investor interest alongside a changing regulatory environment.
This edition explores key legal and market developments affecting M&A transactions, including regulatory reforms, foreign investment, governance, due diligence and deal structuring across the region.
Federal Law No. 3 OF 2022 Regulating Commercial Agencies (the “Commercial Agencies Law”), which came into effect on 15th June 2023 (the “Effective Date”), ushered in a period of change surrounding the termination and de-registration of registered commercial agencies in the UAE.
Pursuant to Article 9(1)(a) and (b) of the Commercial Agencies Law, a commercial agency, that has been registered with the UAE Ministry of Economy, will terminate (a) upon expiry and non-renewal of the term of the commercial agency agreement or (b) if either party elects to terminate the commercial agency agreement based on agreed terms of the underlying agency agreement.
However, the enforceability of Article 9(1)(a) and (b) of the Commercial Agencies Law, regarding the expiry/non-renewal and unilateral termination of commercial agency agreements, was expressly suspended, under Article 30 of the same law, for a period of two (2) years (the “Suspension Period”) in respect of registered commercial agencies that meet certain relevant criteria (each an “Affected Agency”).
Since the Effective Date fell on 15th June 2023, the Suspension Period expired on 15th June 2025.
In practical terms and as from 15th June 2025, parties under an Affected Agency will be able to freely deal with one another, under the provisions of Article 9(1)(a) and (b) of the Commercial Agencies Law, with the effect that each such Affected Agency may be terminated based on expiry/non-renewal or unilateral termination in accordance with the terms of the underlying agency agreement.
Given the expiry of the Suspension Period, we encourage all clients that are involved in registered commercial agencies in the UAE to evaluate their positions, promptly, in order to: (a) verify whether their agency can be classified as an Affected Agency and (b) assess their relative positions under such agencies with particular regard to Article 9(1)(a) and (b) of the Commercial Agencies Law.
Why This Matters
How can we help?
Our team of experienced commercial and disputes lawyers are ready to assist you in:
• Assessing Registered Agencies: We can assist in assessing whether any particular registered agency can be classified as an Affected Agency.
• Strategic Advisory: We can provide strategic advice and tactical guidance on the impact of the expiry of the Suspension Period on: (a) any Affected Agency and (b) the relative positions of the parties, in respect to each other, under such an agency.
To learn more about our services and get the latest legal insights from across the Middle East and North Africa region, click on the link below.