IRAQ Law and Practice Contributed by: Ahmed Al-Janabi, MENA Associates in association with Amereller
9. Defensive Measures 9.1 Hostile Tender Offers
10.2 Stage of Deal While litigation in M&A deals is rare in Iraq, when disputes do arise they typically occur at one of two stages. • Payment of consideration – litigation may occur if there are issues in fulfilling the payment obligations outlined in the transaction. • Non-fulfilment of seller duties – disputes may also be brought when the seller fails to meet the agreed obligations, which can impact the completion of the transaction. 10.3 “Broken-Deal” Disputes Lessons from Pending Transactions in Early 2020 and Related Trends Iraq did not experience any pending transactions that were directly disrupted by COVID-19 in early 2020. Although lockdown measures caused delays across all transactions, these affected all parties equally, and no deals were broken. Consequently, no significant disputes arose, and there are no major lessons to be learned from that period. Likewise, no identifiable trends emerged regarding material adverse effect or material adverse change clauses. Shareholder activism is not a significant force in Iraq. There is very little focus on such activism, and it does not play a substantial role in influencing corporate decisions. 11.2 Aims of Activists Activist efforts aimed at encouraging companies to enter into M&A transactions, spin-offs or major dives - titures are virtually non-existent in Iraq. There is little to no organised shareholder activism in this area, and such activities do not influence corporate decision- making in the jurisdiction. 11.3 Interference With Completion In Iraq, there are virtually no activists focused on M&A, and as such, interference with the completion of announced transactions is not a concern. 11. Activism 11.1 Shareholder Activism
Hostile tender offers are not regulated in Iraq as the share transfer process does not depend on a ten - der approach. Transactions are typically conducted through a direct share transfer process, with an offer and acceptance model, rather than via a tender offer. 9.2 Directors’ Use of Defensive Measures Under Iraqi law, defensive measures used by directors are not regulated. This means there is no statutory framework that specifically permits or restricts such measures. 9.3 Common Defensive Measures Under Iraqi law, defensive measures are not regulated. Consequently, there is no statutory framework outlin- ing common defensive measures for directors in busi - ness combinations. 9.4 Directors’ Duties Iraqi law does not regulate the duties directors owe when enacting defensive measures. Consequently, there are no specific statutory guidelines or obliga - tions imposed on directors in this context. 9.5 Directors’ Ability to “Just Say No” Directors do not have the authority to unilaterally pre - vent a business combination. The power to approve or reject a share transfer lies exclusively with the share - holders, meaning that directors cannot simply “just say no” to block the transaction.
10. Litigation 10.1 Frequency of Litigation
Litigation in connection with M&A is very rare in Iraq. The share transfer process is direct and straightfor - ward, which generally prevents disputes from escalat - ing to court-level litigation.
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