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Business Law and Criminal Liability in U.A.E. DMCC Knowledge Series HPL Yamalova & Plewka DMCC
Business Law and Criminal
Liability in U.A.E.
DMCC Knowledge Series
HPL Yamalova & Plewka DMCC
HPL Yamalova & Plewka DMCC Legal Consultants Business Law and Criminal Liability in U.A.E. By:
HPL Yamalova & Plewka DMCC
Legal Consultants
Business Law and Criminal Liability in
U.A.E.
By: Ludmila Yamalova, Attorney/Managing Partner
DMCC – Dubai, U.A.E.
October 28, 2014
HPL Yamalova & Plewka DMCC
Dubai Court of Cassation Decisions ‐ Examples “… whenever the shareholder abuses [corporate] limitation and
Dubai Court of Cassation Decisions ‐ Examples
“… whenever the shareholder abuses [corporate] limitation and uses it as a tool or
a cover to his actions which violate the company MOA resulting in losses to the
other shareholders and the creditors as long as his actions included fraud and
major mistakes. In such situation the limitation of the liability does not apply and
the shareholder will be personally liable (by his personal assets) for his actions. ”
“ An LLC shareholder is [personally] liable [when] he guarantees to the creditors the
satisfaction of the obligations. ”
“… a shareholder embezzling the companies’ monies is punishable whenever he
transacts over such monies, as if he is the owner, despite knowing that he only has
access to these monies although they are not within his ownership. ”
“… an LLC manager is liable to compensate loses, to shareholders and company and
third parties, resulting from his mistakes and negligence and from his fraud and
power abuse and every breach of law or the company’s rules.”
“ Importing, selling or marketing counterfeit products while knowing so is
considered a criminal act. ”
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Business Law and Criminal Liability in U.A.E. – Outline Core Principles of Criminal Liability in
Business Law and Criminal Liability in U.A.E. – Outline
Core Principles of Criminal Liability in Corporate World
Relevant Laws and Regulations
Affected Corporate Roles and Positions
Circumstances Giving Rise to Liability
Court Process
Settlement of Criminal Claims
Case Studies
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Core Principles of Criminal Liability in Corporate World in U.A.E. Corporate actions or inactions can
Core Principles of Criminal Liability in Corporate
World in U.A.E.
Corporate actions or inactions can result in criminal liability
Limitation of company’s liability is not always applicable
Actions of employees could be imputed to the company
Actions of some shareholders could be imputed to other
shareholders/company
Claim of criminal liability limits freedom of movement
Claim of violation of certain laws may presume guilt
Civil liability may result in jail sentence if judgment unpaid
Criminal case judgment may not grant compensation
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Relevant Business and Criminal Liability Laws in the U.A.E. (as Amended) DIRECT CRIMINAL LIABILITY INDIRECT
Relevant Business and Criminal Liability Laws in the
U.A.E. (as Amended)
DIRECT CRIMINAL LIABILITY
INDIRECT CRIMINAL LIABILITY
Penal Code – Law No.3 of 1987
Immigration – Law No. 6/1973 +
Resolution No. 360/1997
Adulteration & Fraud in Commercial
Transactions – Law No. 4/1979
Money Laundering – Law No. 4/2002
Cyber Crimes – Decree No. 5/2012
Media Law – Law No. 15/1980
Intellectual Property Law
Commercial Companies – Law
No. 8/1984
Dubai Rent – Law No. 26/2007
+ Law No. 33/2008
Employment – Law No. 8/1980
Civil Procedure – Law No.
11/1992
Patent, Law 17/2002
Trademark Law, 37 1992
Medical Practice – Law No. 7/1975
Counter Fictitious Commercial
Activities – Law No. 17/2004
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Affected Corporate Roles and Positions General Manager/Managing Director Shareholders “Nominal” Shareholders
Affected Corporate Roles and Positions
General Manager/Managing Director
Shareholders
“Nominal” Shareholders
Silent Shareholder
Finance Manager
Accountant
Fiduciary
Manager
Human Resources
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Circumstances Potentially Giving Rise to or Triggering Criminal Liability Financial challenges Sale of company Sale
Circumstances Potentially Giving Rise to or Triggering
Criminal Liability
Financial challenges
Sale of company
Sale of assets
Corporate restructuring
Accident
Breach of law
Breach of contract
Breach of trust
Claims against company or
employees
Bankruptcy/liquidation
Failure to perform obligations
Bounced cheque
Change of management
Inspection
Transfer of funds from
company’s account
Unsubstantiated monetary
transactions
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Court Process and Penalties Criminal Case Civil Case Police Prosecution Criminal Court Civil Court Judgment
Court Process and Penalties
Criminal Case
Civil Case
Police
Prosecution
Criminal Court
Civil Court
Judgment
Judgment
Deportation
Fine
Other
Jail
Money
Action
Jail
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Settlement of Criminal Claims Examples of matters that can be settled: Bounced cheques Unpaid debt
Settlement of Criminal Claims
Examples of matters that can be settled:
Bounced cheques
Unpaid debt
Private disputes
Examples of matters that cannot be settled:
Violating residency law
Crimes against the state
Theft
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CASE STUDIES HPLHPL YamalovaYamalova && PlewkaPlewka DMCCDMCC 11
CASE STUDIES
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HPL Yamalova & Plewka DMCC Legal Consultants TO CONTACT US: Jumeirah Lakes Towers Reef Tower,
HPL Yamalova & Plewka DMCC
Legal Consultants
TO CONTACT US:
Jumeirah Lakes Towers
Reef Tower, Suite 1806
Cluster O
Dubai, U.A.E.
O: +971 4 427 9812
info@lyhplaw.com
www.lyhplaw.com
HPL Yamalova & Plewka DMCC
Q & A DMCC Knowledge Series HPL Yamalova & Plewka DMCC
Q & A
DMCC Knowledge Series
HPL Yamalova & Plewka DMCC
Thank you DMCC Knowledge Series HPL Yamalova & Plewka DMCC
Thank you
DMCC Knowledge Series
HPL Yamalova & Plewka DMCC