UAE Law and Practice Contributed by: Alex Saleh, Asad Ahmad, Khaled Abu Orabi and Khaled al-Khashab, GLA & Company
government authorities retain considerable discretion to reject a transaction where they have concerns, including those related to national security or public policy. 4.7 Special Consideration for Joint Ventures Joint ventures are not separately dealt with under the UAE Competition Legislation. They are considered like any other transaction in terms of whether the “under - taking” is meeting the jurisdictional threshold and if there are any considerations as to whether it should be a “restrictive agreement” or if there is an abuse of a “dominant position”. Other than evaluating the “economic concentration” aspects, the Competition Department will also consid - er if the joint venture should be considered a “restric - tive agreement” or if it abuses a “dominant position”. 5. Decision: Prohibitions and Remedies 5.1 Authorities’ Ability to Prohibit or Interfere With Transactions Once the Minister has made their decision, the rel - evant competent authorities (including the Ministry) have the power and authority to enforce it. The author - ities have the ability to prohibit or otherwise interfere with a transaction. The clearance or rejection decision is made by the Minister, so it is worth highlighting the powers of the Minister that extend, amongst other things, to the: • commercial transactions; • commercial agency; • consumer protection; • commercial companies, including publicly listed companies; • financial and capital markets; and • intellectual property. The Minister can therefore significantly affect the pro - vision of a product or a service in the UAE and can request the UAE enforcement bodies intervene to sup - port any decision made in this regard.
On a related note, the Competition Law also states that the Ministry will co-ordinate with the competent authorities and sectoral regulatory bodies in the exe - cution of its provisions. Employees of the Competition Department will be designated by a resolution of the UAE Minister of Justice, in agreement with the Minis - ter and the relevant competent authority will have the capacity of judicial officers to prove violations of the UAE Competition Legislation. 5.2 Parties’ Ability to Negotiate Remedies When the Competition Department has concerns about a transaction, the parties may propose rem - edies. For example, they may propose divestitures or structural or behavioural remedies. The Competi - tion Department then has sole discretion to accept or reject these remedies and include them in the recom - mendations it submits to the Minister. The Minister will then consider the remedies and make a final decision. 5.3 Legal Standard There is no specific legal standard that remedies must meet to be considered acceptable. It is therefore up to the parties to agree on the most suitable reme - dies with the Competition Department. The remedies should then be accepted by the Minister. 5.4 Negotiating Remedies With Authorities Remedies can be proposed at any point until the Min - ister makes a final decision. It can be proposed by the relevant “undertaking(s)” making the notification, the Competition Department or even the Minister, who can issue clearance of the “economic concentration” transaction subject to certain remedies being satis - fied. Proposals for remedies are usually communi - cated in writing, but can also be initially discussed verbally for the purpose of submitting the final remedy proposal in writing. 5.5 Conditions and Timing for Divestitures Divestiture (ie, the commitment to sell a business unit) may take the form of a: • horizontal division where the same shareholders own the shares of the new companies; or • vertical division where part of the existing company is carved out and transferred to a newly estab - lished subsidiary owned by the parent company.
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