UAE Law and Practice Contributed by: Alain Zahlan de Cayetti and Anna Sedova, De Cayetti Law
Their role is to assist sports federations in organis - ing and managing their sport. • Sporting leagues – not established as independent commercial companies, but as entities affiliated with or established by national sports federations. For instance, the UAE Pro League operates as an independent professional league organisation responsible for managing the country’s football competitions, and works closely with the UAE Football Association. A hybrid structure allows a sound separation between regulatory and commer - cial development roles. • Sports clubs – have a legal personality and inde - pendence. Their role is to enable the practice of one or more sports. Sports clubs can, in particular, sponsor and prepare talented athletes, spread sports culture and ethics and provide the right to practise physical and sports activities for all mem - bers without discrimination (Article 30 of the UAE Sports Law). Sports clubs have a board of direc - tors and are members of the relevant sports feder - ation. Professional sports clubs (in particular, in the football sector) can operate through commercial corporate entities, allowing sponsorships, broad - casting rights, merchandising and ticket sales, and facilitating external investment, structured financial management and transparent accounting. • Other sports institutions – registered and approved sports entities with the role of implementing the goals and objectives mentioned in their by-laws, whilst refraining from any religious or political activity. Sports institutions can be hybrid, involving both a public sport entity and a private commercial company. 4.2 Corporate Governance Codes Corporate governance in the UAE sports sector is primarily governed by the UAE Sports Law, which introduced the above-mentioned modern regulatory framework for sports governance and administration. Such rules apply to national sports federations, pro - fessional and amateur sports clubs, leagues and com - petitions, sports entities and organisations, including their board members, senior executives and admin - istrators. The consequences of non-compliance with govern - ance rules may result in administrative or disciplinary
sanctions (eg, suspension, financial penalties, restric - tion on competitions, or withdrawal of accreditations and licences). In certain cases, as previously men - tioned, sanctions can be of a criminal or civil nature. The UAE does not have a national fit and proper per - son test similar to those used in European sports leagues. However, the rules applicable in the UAE require owners and directors to demonstrate financial integrity, absence of criminal record and ethical back - ground. Officers and directors of sports organisations are subject to corporate governance duties similar to those applicable to company directors under the UAE law. These include, namely and in particular, the fol - lowing duties: • care and diligence; • to act in the entity’s best interest; and • to avoid (and disclose) conflict of interest. General corporate and insolvency laws applicable in the UAE provide for the possibility of imposing finan - cial sanctions (fines) on insolvent entities. As far as sports are concerned, in the event a club fails to com - ply with its financial obligations or licensing require - ments, the relevant league will apply sanctions includ - ing, in particular: • transfer restrictions or exclusion from competitions; • relegations of clubs; or Sport in the UAE receives substantial funding from the government, at the federal level under the supervision of the Ministry of Sports as well as at the Emirate lev - el, mainly through sports councils (where applicable). Furthermore, sports organisations generate revenue through the commercial sources mentioned above (sponsorship, broadcasting rights, ticketing and hos - pitality, etc). Private sports clubs benefit from public and private investments. In general, sports funding in the UAE is distributed in a cascade fashion (ie, national, clubs, community sports initiatives, youth programmes, school sports partnerships). • points deductions. 4.3 Sport Funding
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