SOME KEY PROVISIONS OF THE AMENDED DRAFT LAW

▮ The business of commercial agencies will be exclusive to UAE nationals only, and the law will come into force on June 16 this year.

▮ Public joint-stock companies with at least 51 per cent of national capital contribution will be allowed to act as commercial agents.

▮ The law is based on the principle of autonomy/ will, and the contract is pacta sunt servanda (agreements must be kept) protecting all parties.

▮ Any international company, under certain conditions and with the approval of the UAE Cabinet, will be allowed to act as a commercial agent for its products as long there was/ is no commercial agent.

▮ It introduces a new mechanism to settle disputes between the agent and client by resorting to arbitration upon agreement.

▮ The new law addresses the disruption of goods and services in the UAE markets in the case of a dispute between the two parties. It grants the Ministry of Economy the authority to specify exclusive resources vis-a-vis entering products and services for a short term with extended indemnities to the commercial to hold the principle accountable against any liability defined by the irrevocable court verdict.

▮ The termination provisions of the concurrent agency contract will not apply imminently regarding non-renewal or early termination for convenience. However, the law provides either two years or 10 years for existing agencies who have been with the same agent for more than 10 years or where the size of the agent’s investment exceeds Dh100 million.

▮ The law prohibits the practice of commercial agencies in the country unless registered in the commercial agency’s records in the Ministry of Economy. Any non-registered agency is not counted.

▮ A commercial agency committee will be formed as per the decision of the UAE Cabinet. The committee will specialise in resolving the dispute between the registered agency parties.

▮ The law creates additional opportunities and fields for family businesses owning commercial agencies and supports their transformation into public joint-stock companies.

▮ The law ensures that top products and commodities are offered to consumers, fulfilling their ambitions to access competitive prices and high-level services.

▮ As per the recommendation of the Minister of Economy and in coordination with the specialised entities, the law allows the Cabinet to release any activities or materials from the agencies following the specific regulations.