UNITED ARAB EMIRATES Law and Practice Contributed by: Stuart Paterson, Janine Mallis and Tania Forichon, Herbert Smith Freehills
ance with the Law on Damages and Rem - edies; and • account to their principal for any benefit they have acquired as a consequence of the breach. Further, under the DIFC Companies Law, a direc - tor has the following duties: • to act honestly, in good faith and lawfully with a view to the interests of the company; • to act with the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances; • to avoid conflicts of interest; • not to use the company’s property, informa - tion or opportunities for their own benefit unless approved by the company; and • confidentiality – to only use information obtained in confidence from the company for the benefit of the company and not for their own or anyone else’s advantage. Further, under Article 149 of the DIFC Compa - nies Law, a shareholder can seek a court order requiring the company take or refrain from taking action. Under Article 149(1)(c), this includes an order authorising proceedings to be brought in the name of and on behalf of the company by such person or persons and on such terms as the court may direct (derivative claims). In the ADGM, a director has a duty: • to act within their allocated powers; • to promote the success of the company; and • to exercise independent judgement. The ADGM Companies Regulations of 2020 pro - vide for derivative claims which allow a member of the company to seek relief on behalf of the company and where such claims are in relation
to a cause of action arising from an actual or proposed act or omission involving default, neg - ligence, breach of trust or breach of duty by a director of the company. This right is restricted to those eligible members holding 5% of the share capital. 4. Overseas Parties in Fraud Claims 4.1 Joining Overseas Parties to Fraud The rules for facilitating the joinder of overseas parties are provided for in Article 21 of the New Penal Code, which provides for joinder in limited circumstances, such as: • crimes committed against the internal or external security of the state, or against its constitutional regime or its stocks and bonds issued under legal licence, or in connection with its stamps, or crimes of falsification or counterfeiting of its official documents or seals; • crimes of falsifications, counterfeiting or forgery of money belonging to the state, no matter whether such acts are committed in or out of the state; Claims Criminal • crimes of falsification, counterfeiting or forgery of coined or paper money which is legally in circulation in the state, or crimes of putting such money into circulation in the state or the possession thereof with the inten - tion of putting it into circulation; and • deliberate murder committed against a UAE citizen. The New Penal Code’s provisions relating to bribery, embezzlement, and damage to public
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