IRAQ Law and Practice Contributed by: Ahmed Al-Janabi, MENA Associates in association with AMERELLER
8.2 Special or Ad Hoc Committees Under Iraqi law, there is no requirement or regu - lation mandating the establishment of special or ad hoc committees in business combinations. 8.3 Business Judgement Rule Court Deference to the Board of Directors in Takeover Situations In Iraq, courts strictly adhere to statutory pro - visions when evaluating takeover situations. Unlike the business judgement rule in the United States, which affords significant deference to the board’s decisions, Iraqi courts do not automati - cally defer to the board’s judgement. The focus remains on the legal requirements as set out in the applicable laws, and the board’s decision does not influence the court’s interpretation or application of those laws. 8.4 Independent Outside Advice Due Diligence Oversight Reputable local attorneys, who are admitted and well-versed in Iraqi law, typically conduct and oversee the due diligence process. Primary Independent Advice This due diligence review is the most common form of independent outside advice provided to directors, ensuring that all legal, financial and regulatory matters are thoroughly assessed. 8.5 Conflicts of Interest Judicial and Regulatory Scrutiny of Conflicts of Interest in Iraq Iraqi laws regulate conflicts of interest for direc - tors, managers, shareholders and advisers. However, in practice, such conflicts are not monitored to a high extent. Conflict of interest provisions are included in relevant corporate and commercial legislation.
Enforcement and oversight of these provisions tend to be limited compared with other jurisdic - tions.
9. Defensive Measures 9.1 Hostile Tender Offers
Hostile tender offers are not regulated in Iraq as the share transfer process does not depend on a tender approach. Transactions are typically con - ducted 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 outlining common defensive meas - ures for directors in business combinations. 9.4 Directors’ Duties Iraqi law does not regulate the duties directors owe when enacting defensive measures. Con - sequently, there are no specific statutory guide - lines or obligations imposed on directors in this context. 9.5 Directors’ Ability to “Just Say No” Directors do not have the authority to unilaterally prevent a business combination. The power to approve or reject a share transfer lies exclusively with the shareholders, meaning that directors cannot simply “just say no” to block the trans - action.
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