Spotlight on corporate legal concerns in the UAE
Kishore Mulani, Managing Partner, Lawgical Group, offers advice on safeguarding businesses
Corporate clients in the UAE face a myriad of legal challenges, from contractual disputes to navigating ever-evolving regulatory landscapes. Many companies have encountered costly litigation due to poorly drafted contracts or the absence of written agreements, particularly when relying on handshake deals. Such informal arrangements often lack sufficient safeguards and can lead to misunderstandings and disputes over non-performance or non-payment.
In the UAE, well-constructed contracts, aligned with civil and commercial laws, can significantly mitigate these risks. We frequently advise clients to ensure that their purchase and supply agreements are robust, and to undertake due diligence on insurances, guarantees, and performance bonds as well as assessing their enforceability to provide adequate financial security.
For corporate entities, in addition to lack of effective contracts, employment matters and compliance with UAE labour laws also present recurring challenges. Failure to adhere to statutory employment standards can expose companies to litigation and regulatory penalties. It is important to have fair employment contracts in place while seeking external legal support for a sound understanding of the evolving employment regulations in the region. Just like employment, in a market like Dubai, we assist clients very frequently on contentious and well as non-contentious tenancy and property matters as well.
Additionally, we frequently come across clients who land in a legal soup due to inadequate or non-existent legal due diligence in complex transactions such as joint ventures, mergers, acquisitions as well as sale and purchase of assets. We often assist clients in navigating such high-value and high-impact deals while advising on due diligence, corporate structuring, and the regulatory nuances essential for seamless transactions. With corporate governance on the rise, the importance of a framework that addresses Anti-Money Laundering (AML), Know Your Customer (KYC) processes, enterprise risks, fraud management, and Environmental, Social and Governance (ESG) reporting, while also ensuring regulatory compliance cannot be stressed enough.
On the business side, interestingly, the lack of awareness surrounding intellectual property (IP) protection is commonplace. Proper registration and enforcement of IP are vital for brand protection in a competitive market. Companies should actively secure their trademarks and other assets, as well as establish rigorous measures for IP enforcement to deter infringement.
Overall, a proactive approach with tailored legal counsel enables companies to minimise liability, standardise procedures, and make informed decisions in a dynamic legal landscape. Standardising contract templates, assessing risk appetites, and staying updated on legislative developments are additional steps businesses can take to foresee and mitigate risks effectively.