UK: Corporate Focus - Recent Updates - July 2011


The Bribery Act (the Act) came into force on 1 July 2011.

Earlier this year The Ministry of Justice published guidance for organisations to follow in order to ensure compliance with the Act. The guidance is intended to help commercial organisations of all sizes and sectors understand what sorts of procedures they should put in place to prevent bribery. The guidance is designed to be of general application and is formulated around six guiding principles which are explained below.

Whereas previously the Act was the subject of much criticism from a broad range of business communities, the latest guidance has been welcomed as a 'common sense' approach. Justice Secretary Kenneth Clarke confirmed that this approach was a result of the feedback that the Government received from the business community. The additional clarity has been particularly welcomed in important areas such as corporate hospitality and the treatment of joint ventures.

Some key points from the guidance

Although commercial organisations with entirely domestic operations may be required to implement bribery prevention procedures, they are likely to face lower risks of bribery being committed on their behalf by associated persons than organisations that operate in foreign markets. Notwithstanding this fact, the procedures put in place to mitigate domestic bribery risks are likely to be similar, if not the same, as those designed to mitigate risks associated with foreign markets.

In the event that an organisation faces prosecution for an alleged breach of the Act the question of whether it had adequate procedures in place to prevent bribery is a matter that can only be resolved by the courts taking into account the particular facts and circumstances of the case. The onus will be on the organisation to prove that it had adequate procedures in place to prevent bribery.

The application of the principles is likely to suggest that different procedures should be followed depending on whether organisations are small, medium sized or large multinationals. Not all procedures will be applicable for all organisations and some will not apply to certain circumstances. In such cases organisations may have alternate procedures in place which will be adequate.

Commercial organisations should adopt a risk-based approach to managing bribery risks. Procedures should be proportionate to the risks faced by an organisation and no policies or procedures are capable of detecting and preventing all bribery.

Corporate Hospitality

The question of corporate hospitality is one that has proven particularly contentious since the conception of the Act. According to the latest guidance the Act does not seek to criminalise bona fide hospitality or promotional or business expenditure which is reasonable and proportionate and is geared towards improving a commercial image or establishing cordial relationships. However it is recognised that in certain situations such corporate hospitality can amount to a bribe, which the Act seeks to address.

Accordingly, in order to amount to a bribe under the Act, there must be an intention for a financial or other advantage to influence the official in his or her official role and thereby secure business or a business advantage. In this regard, it may be that in some circumstances hospitality or promotional expenditure in the form of travel and accommodation costs will not even amount to 'a financial or other advantage' to the relevant official because it is a cost that would otherwise be borne by the relevant foreign Government rather than the official himself.

The six principles:

The Government considers that procedures put in place by commercial organisations wishing to prevent bribery being committed on their behalf should be informed by six principles. These are set out below.

Principle 1 - Proportionate procedures

Organisations should institute proportional procedures to prevent bribery considering the nature and scale of the business. Such procedures should be clear, practical, accessible, effectively implemented and enforced.

Principle 2 - Top-level commitment

Management (directors/owners) should demonstrate a commitment to preventing bribery and foster a culture where bribery is never acceptable.

Principle 3 - Risk Assessment

Organisations should periodically assess the nature and extent of its exposure to potential external and internal risks of bribery.

Principle 4 - Due diligence

Organisations should apply proportionate due diligence procedures on all representatives of the business in order to identify and mitigate risks.

Principle 5 - Communication and training

Organisations should ensure that their bribery prevention procedures are understood throughout the organisation through communication and training.

Principle 6 - Monitoring and review

Organisations should monitor and review their anti bribery procedures and make improvements where necessary.


Although the new guidance has thrown some light on how to implement the Act in practice, the real and practical effectiveness of this controversial piece of legislation will only begin to be revealed with the benefit of time.


On 24 February 2011 Lord Davies of Abersoch published his report 'Women on boards' (the Report). The Report found that women constitute just 12.5% of membership of boards in FTSE 100 Companies despite making up almost 50% of the UK work force. Whilst this is an increase on 2005, the Report informs us that at the current rate of change it will take over 70 years to achieve gender-balanced boardrooms in the UK. In an attempt to redress this imbalance the Report makes several recommendations which have implications for (particularly large and listed) companies throughout the UK, including that FTSE 100 boards aim for a minimum of 25% female representation by 2015.

This is an issue which is also being taken seriously by key players in the UK business world. Earlier this month 150 people attended the inaugural 30% Club 'Actions Beyond Words' seminar, including FTSE Chairmen from organisations such as Deloitte, HSBC and Marks and Spencers. These individuals have committed their voluntary support to the 30% goal - that 30% of UK company boards should consist of women by 2015 - which goes beyond the 25% recommended by the Report.

Report Recommendations

The key recommendations of the Report were:

  • Chairmen of FTSE 350 companies to set out the percentage of women they aim to have on their boards by 2013 and 2015. Chief executives to review the percentage of women they aim to have on their executive committees in 2013 and 2015
  • Quoted companies to disclose annually the proportion of women on their boards, women in senior executive positions and female employees across the organisation
  • The Financial Reporting Council to amend the UK Corporate Governance Code to require listed companies to establish a policy on boardroom diversity
  • Companies to report on the first three recommendations in their 2010 Corporate Governance Statement
  • Chairmen to disclose meaningful information about their company's appointment process and how it addresses diversity in the company's annual report
  • Investors to pay close attention to the first five recommendations when considering company reporting and appointments to the board
  • Companies to advertise non-executive board positions periodically to encourage greater diversity in applications
  • Executive search firms to draw up a voluntary code of conduct addressing gender diversity and best practice
  • appointments to be considered from women outside the corporate mainstream as well as female executives within the corporate sector
  • the steering board set up for the Report to meet every 6 months to consider progress against the above measures

Impact on UK companies

In terms of what this means for UK companies, despite the fact that the recommendations have no legal force, we expect to see an increasing number of UK companies positively discriminating in favour of women to ensure they have greater representation at board level. The main reasons for this are that commercially, there are strong arguments to suggest that it makes business sense, and the increasing feeling that this is the inevitable direction business is heading as illustrated by the fact that:

  • many European countries are ahead of the UK in implementing measures to address the issue;
  • a significant number of FTSE Chairmen have voluntarily committed to bring more women into boardrooms and to support the 30% goal; and
  • if the recommended business-led approach fails to achieve change it is likely that the Government will introduce more prescriptive measures (as is recommended in the Report).

Is there a business case for change?

Research has shown that there is a strong business case for gender-diverse boards as they have been shown to be more effective. A key factor when judging effectiveness is profitability. It has been reported that companies with three or more female board directors achieve returns on equity 45% higher than the average company and that gender-diverse companies (defined as the top quartile companies in terms of the proportion of women on their executive committees) exceed operating results compared to companies with no women on their senior management teams by an average of 56%.

Reasons accredited for such higher performance include the fact that women offer different perspectives, offer different skills and result in companies having greater focus on corporate governance. It has also been argued that if companies fail to promote diversity at senior levels, it can affect their reputation.

How does the UK compare to the rest of Europe?

Across Europe countries are taking steps to redress the imbalance with Germany, Norway, Spain, Iceland, the Netherlands and France each having adopted or being in the process of adopting quota measures for female executive / non-executive directors. Further, Denmark, Finland and Sweden have 'comply or explain' codes requiring that every board should have at least one male and one female director and in Italy the lower house of parliament passed a law in 2010 prescribing a 30% female quota for boards of all listed companies. The law which has been dubbed the 'pink quota' has not yet made it to the Senate.

Prospect of real change?

Whether the recommendations in the Report, or even the more pronounced changes undergone in countries such as France, Spain, Norway and Ireland (where quotas are legal requirements), will succeed in addressing the real issue is as yet unclear. The Report is sceptical of the ability of quotas to resolve the problem, suggesting it may result in tokenism. In order to redress the imbalance the unconscious bias against women in senior positions will need to be broken down, for which there is no quick fix.

Regardless, it is clear that this is an issue which is gaining momentum across Europe. Accordingly changes, whether effective at addressing the root issue or not, seem inevitable. That this is recognised at both corporate and political levels is illustrated by the fact that:

  • it has been reported that companies are increasingly looking to discriminate positively in women's' favour to ensure they have greater representation at top levels;
  • Anthony Arthur, Associate Director of MHP Communications Financial and Investor Practice says head-hunters are increasingly interested in women with the potential to make it to the top; and
  • at EU level a green paper on the subject is expected in 2011 which will impose targeted measures if voluntary action is not taken.

What next?

The steering board behind the Report will keep under review progress following the issue of the recommendations. Further, the UK Financial Reporting Council is due to publish the results of a consultation on 29 July 2011 into whether the Corporate Governance Code should be amended to include a requirement for listed companies to publish their policy on gender diversity on boards.


This article concludes the series following the progression of Farstad Supply A/S v Enviroco Ltd through the courts. The case relates to the definition of subsidiary under section 736 of the 1985 Companies Act (the Act) (now replaced by section 1159 of the Companies Act 2006) and has important implications for corporate group structures, financial transactions and agreements containing Companies Act definitions of subsidiary.

In Farstad Supply A/S v Enviroco Ltd [2011] UKSC 16 the Supreme Court upheld the decision of the Court of Appeal that in the circumstances, where a holding company charged its shares in a subsidiary to a bank and the associated security arrangements required the bank or its nominee to become the registered holder of the shares, the subsidiary would cease to be a subsidiary, notwithstanding the fact that the original holding company continued to exercise control over it in practice.

Facts of the case

On 7 July 2002 Enviroco Ltd (Enviroco) was cleaning the tanks of an oil rig supply vessel chartered by Farstad Supply a/s (Farstad) to Asco UK Ltd (Asco). During the cleaning operations a fire occurred in the engine room causing the death of an Enviroco employee and damage to the vessel. Farstad brought proceedings in Scotland against Enviroco claiming compensation for damage to the vessel which Enviroco sought to defend on the basis that under the charter agreement (the charterparty) between Asco and Farstad, Farstad had agreed to indemnify 'affiliates' of Asco against such claims.

The charterparty stipulated that 'affiliate' would include subsidiaries of a company of which Asco was also a subsidiary and that 'subsidiary' would have the meaning assigned to it in section 736 of the Act. Section 736 set out a number of ways in which the parent-subsidiary relationship could arise, the key characteristics being (i) that the putative parent company exercises control over the putative subsidiary and, for certain of the tests, including that at issue in this case, (ii) membership by the putative parent of the putative subsidiary.

At the point that Asco entered into the charterparty with Farstad, Enviroco would have constituted an affiliate of Asco on the basis that they were both subsidiaries of Asco PLC. However, after that date, Asco PLC pledged its shares in Enviroco to the Bank of Scotland by a Scottish law deed of pledge pursuant to which the bank's nominee became the registered holder of the pledged shares.

The key question under consideration by the courts was whether Asco PLC, having charged its shares as such, ceased to be a 'member' of Enviroco notwithstanding the fact that it continued to exercise control over Enviroco in practice. If so, in the circumstances, the parent-subsidiary relationship would not be established under the Act.


The High Court held that the legal transfer of shares to a nominee did not change the subsidiary relationship, rendering it possible for Enviroco to rely on the indemnity provided by the charterparty. However, on appeal, the Court of Appeal and subsequently the Supreme Court held that Asco PLC could not be considered to be a member of Enviroco unless it appeared in the register of members. Due to the charge to the Bank of Scotland this requirement was not met. Consequently the membership condition for a parent subsidiary relationship within sections 736(1)(b) or (c) of the Act was not fulfilled and Enviroco's reliance on the charterparty indemnity would necessarily fail.

Implications of the decision

The decision should be considered in any transaction which involves shares in a subsidiary being used as security. In such circumstances, the terms of the security agreements should be carefully analysed to ensure that the subsidiary will not lose its status as such as a result of the charge.

The implications will be most pronounced in financial and banking transactions which involve the giving of security in jurisdictions whose laws differ from English law and require the registration of the shares being pledged in the name of the security provider (such as Scotland). This is because a security arrangement of this type is relatively rare when dealing with English companies giving security under English law, where the usual form of security is an equitable charge (in which case the chargor remains a member of the subsidiary).

The decision also has broader implications for any situation whereby shares in a subsidiary are held by a nominee, as the court's decision turned on the fact that another person had been registered in Enviroco's register of members, not on the taking of security.

Furthermore, use of Companies Act definitions of subsidiary in documents should be given careful consideration to ensure that no unintended consequences are triggered (such as a change of control giving a right to terminate) if a subsidiary, by reason of the Enviroco decision, is deemed to detach itself from a parent company.


Prompted by the growing feeling that the balance of power on takeovers is unfairly tilted in favour of bidders, the Code Committee of the Takeover Panel (Panel) issued a public consultation paper on March 2011. They made some important recommendations which may lead to significant changes to the Takeover Code (Code) affecting the way takeovers of public companies are conducted in the UK. The most important changes are summarised below. If the changes are implemented it is expected that target boards will have greater control over the course of the bid, while bidders will encounter increased challenges.

Banning deal protection measures other than in certain circumstances (eg break fees in favour of a 'white knight' or where the target board initiates a public auction)

The Committee are seeking to impose a prohibition on the payment of break fees and certain other offer-related arrangements. This recommendation is prompted by concerns that current deal protection measures deter competing offerors from bidding, or leads them to make a bid on less favourable terms. The recommendation has proven controversial for many bidders who feel that the changes will result in fewer bids being made due to bidders being reluctant to commit to up-front costs (such as due diligence and financing fees) associated with making a bid, knowing that they will not be compensated for these if their bid is unsuccessful. This is a particular concern to private equity firms (who have higher financing costs) and has led critics to argue that it may not be in the best interests of target company shareholders. The prohibition will not apply to break fees in favour of white knights (i.e. competing bids to hostile takeovers) or where the target board has started a formal process to sell the company by way of public auction.

The prohibition also prevents target companies agreeing a range of restrictions relating to their ability to (i) solicit alternative bidders (ii) engage with competing bidders and (iii) recommend alternative bids. It has been noted that this may result in bidders increasingly using stakebuilding to protect themselves from the risk of interlopers. If this happens we may witness an increasing use of contractual takeovers which are more compatible with stake-building than schemes of arrangement.

Naming potential bidders in the announcement that commences the offer period, a 28 day put up or shut up (PUSU) deadline plus the ability for the target board to extend this for some bidders but not for others

These changes are intended to address issues associated with bidders announcing that they are considering making a bid with no commitment to actually do so. The Panel believes that the changes will give targets more timing certainty, reduce the period in which targets are under 'siege' from unsolicited or unwelcome bidders and encourage the avoidance of leaks by a bidder.

The combined impact of the changes on the target will be that target boards will have greater power to influence the course of a bid. However once a PUSU deadline has been triggered it is likely that a board will face additional scrutiny and pressure from institutional investors and shareholders who will want justification for, and may seek to influence, the board's decision whether or not to extend the PUSU period. This may influence to what extent boards take advantage of these increased powers.

In terms of the impact on bidders, it is expected that the changes will significantly affect their strategy, particularly for buyers who are reliant on third-party finance as they will need to get these arrangements in place swiftly following an announcement. The proposal will also encourage potential bidders to maintain secrecy and avoid leaks for fear of triggering a 28 day PUSU deadline.

No limit on factors to be taken into account by boards in giving their Recommendation

The key clarification on this is that target boards need not consider price as the determining factor. As boards are already obliged to consider a bid in conjunction with their fiduciary duties it is unlikely that this proposal will make much real difference, however it does bring the Code in line with current practice.

Disclosure of offer related fees and financing arrangements

The requirement to disclose offer related fees and financing arrangements is intended to help judge whether a bid is likely to enhance of erode shareholder value. It has been noted that the requirement to disclose financing agreements from the time of the firm offer announcement may result in interim financing arrangements being entered into to limit disclosure of sensitive information.

Disclosure of future plans

The proposal that bidders and targets should be bound by any stated future plans for the target and its employees for at least one year after the offer becomes unconditional could make bidders more cautious about what they promise, has the potential to be very restrictive and may result in bidders submitting heavily caveated disclosures in order to ensure head-room for manoeuvre in future.

Improving ability of employee representatives to make their views known

Proposals include clarifying that the Code does not prevent the provision of information in confidence to employee representatives and requiring the target company board to inform employee representatives at the earliest opportunity of their right to circulate an opinion on the effects of the offer on employment. While employees do already have rights to express their views, these have rarely been exercised and it is hoped that the proposals will encourage employee participation. However it will remain to be seen whether employees will utilise these new rights and whether, if they do, it will make any difference to the success of a take-over bid in practice.

What next?

The Committee should by now have received comments on the proposed new rules which it will take into consideration before issuing guidance regarding when, and in what form, the changes are likely to come into force.


The Financial Reporting Council's recently released guidance is intended to assist listed companies further in their application of the principles of the UK Corporate Governance Code (Code). The emphasis of the guidance is not just on the structures and processes that listed companies should put in place in order to operate effectively and to achieve best practice, but also on the way in which boards should behave and the way in which they should carry out their roles in order to comply with the Code.


The guidance follows a review, by the Institute of Chartered Secretaries and Administrators (ICSA), of the Good Practice Suggestions emerging from the Higgs Report which was published by the Financial Reporting Council.

Application and Scope

The guidance is not intended to be prescriptive, but rather to stimulate a board into thinking about how best to carry out its role. Ultimately it states that it is for individual boards to decide on the governance arrangements most appropriate to their circumstances and to interpret the Code accordingly.

The guidance relates primarily to Sections A and B of the Code concerning the leadership and effectiveness of boards. It focuses on issues which have been flagged as requiring further explanation by companies, board members and investors in consultations with the ICSA, and focuses particularly on the following areas:

The varied roles within the board of directors

The guidance clarifies the functions and characteristics which should be demonstrated by key individuals in listed companies. These can be summarised as follows:


The Chairman should provide ethical leadership, demonstrate the highest standards of integrity and probity, and set clear expectations concerning the company's culture.

Senior Independent Director (SID)

The role of the SID should be set out in writing and be clearly understood by boards. In particular it should be made clear to boards at what point the SID should intervene in order to maintain board and company stability.

Executive Directors

The responsibility of Executive Directors should be to the whole of the business rather than to a specific role. The guidance suggests that a director could gain a greater understanding of how to achieve this by taking a position as a Non- Executive Director on another board. Executive Directors should also be receptive and responsive to constructive challenges posed by Non-Executive Directors.


The CEO should set an example to company employees whilst also making the board aware of the views of employee's.


The CFO should deliver high quality information to the board on the company's financial position.

Non-Executive Directors

Non-Executive Directors should offer constructive challenges to the directors and insist on receiving high-quality information sufficiently in advance of board meetings to enable them to participate effectively at board meetings. The guidance suggests that new Non-Executive Directors should be partnered with an Executive Director in order to enhance their understanding of the business at the outset.

Company Secretary

Should report to the Chairman on all board governance matters.

Decision making

The guidance makes it clear that board members raising sufficient challenges to major proposals is a critical requirement for listed companies seeking to make wellinformed decisions. The guidance goes into detail about factors which contribute to listed companies having good decision making capability and, likewise, what will limit effective decision making. Board composition and succession planning

Boards should be sufficiently diverse to ensure that proposals are thoroughly considered and succession planning should be framed accordingly. In order to achieve this the nomination committee should periodically assess and keep under review whether board composition is sufficiently varied and whether succession planning strategies have been implemented effectively.

Audit, risk and remuneration

The guidance instructs that although the board can employ committees to assist in the consideration of audit, risk and remuneration, final decisions and accountability for these are ultimately a board responsibility. Accordingly, boards should ensure they are well apprised of the conduct of committee meetings, the minutes of which should be circulated to all members of the board.

Relations with shareholders

The guidance states the Chairman has an important role to represent the company to existing and potential shareholders, and should report personally in the corporate governance statement to the annual report.

Further information

The guidance and its accompanying press release are available on the FRC website.



The Supreme Court (previously the House of Lords) delivered its judgment in HMRC v Tower MCashback LLP1 and another on 11 May 2011. The case involved a relatively complex tax avoidance scheme and resulted in a 'win' for HMRC. The decision provides some guidance as to the approach that the Courts can be expected to take where tax avoidance schemes are involved.

Throughout the litigation there had been two main issues, one concerning the effect of closure notices and, the other, the efficacy of a tax avoidance scheme. This article considers the impact of the decision on tax saving schemes.


The appeal concerned claims for first year allowances (FYAs) under the Capital Allowances Act 2001 (CAA) in respect of expenditure on software rights. The claims were made by two limited liability partnerships, Tower MCashback 1 LLP and Tower MCashback 2 LLP (LLP2). The judgment centred on the position of LLP2.

The arrangements in which the LLPs took part involved three main participants: MCashback Limited which developed and originally owned the software, Tower Group plc, a financial services company; and the LLP in question. Tower was involved in advising and making arrangements for the transactions between MCashback and the LLPs. In addition two banks, both based in Guernsey were involved.

Capital allowances are available for certain types of expenditure incurred for the purposes of a 'qualifying activity'. Expenditure will generally qualify for allowances if it is capital expenditure on the provision of plant and machinery wholly or partly for the purposes of the qualifying activity carried on by the person incurring the expenditure. It is a requirement that the person incurring the expenditure owns the plant or machinery as a result of incurring the expenditure.

Where capital allowances take the form of FYAs 100% of the expenditure may be deducted in a single tax year rather than being written down over a number of years as is the case with writing-down allowances. FYAs were available in respect of certain expenditure incurred on or before 31 March 2004 on information and communications technology. FYAs are clearly attractive to those who devise tax avoidance schemes where the expenditure is 100% deductible in a period before the trade has generated significant income. Wealthy individual taxpayers participating in the scheme would seek to access the tax losses generated by the FYAs by carrying on a trade in partnership and then claiming 'sideways' loss relief in order to set the losses against other income. (It should be noted that the Finance Act 2007 imposed severe restrictions on sideways loss relief for non-active partners and limited partners.)

The case centred on whether the LLPs were entitled to claim FYAs on the price paid, which was in excess of market value, to acquire rights to certain computer software under licence agreements.

In the case of LLP2, the investor members funded £5 million of the total £27.5 million purchase price from their own resources; the remaining £22.5 million was funded by interest-free, non-recourse loans to the partners of LLP2 from a company in the Tower group. In practice, it was not anticipated that the loans would be repaid in full.

HMRC argued that LLP2 did not qualify for capital allowances in respect of the £22.5 million of expenditure funded by the loans because LLP2 had not 'incurred' that expenditure.

The Decision

The Supreme Court – Lord Walker gave the lead judgment – observed that the scheme was a complex, preordained transaction.

Lord Walker reviewed the authorities in relation to capital allowances and tax avoidance, in particular Ramsay (WT) Limited v Inland Revenue Commissioners, Ensign Tankers (Leasing) Ltd v Stokes and Barclays Mercantile Business Finance Ltd v Mawson. He made particular reference to Ribeiro PJ in Collector of Stamp Duty v Arrowtown Assets Ltd who stated that the ultimate question was "whether the relevant statutory provisions, construed purposively, were intended to apply to the transaction, viewed realistically."

Lord Walker considered the facts and concluded that: "there was not, in any meaningful sense, an incurring of expenditure of the borrowed money in the acquisition of software rights. It went in a loop in order to enable the LLPs to indulge in a tax avoidance scheme."

The Court applied the formulation set out in Arrowtown and decided that on a realistic view of the facts, the composite transactions did not satisfy the requirements of section 11(4) of the CAA, which requires real expenditure for the real purpose of acquiring plant for the use in a trade and directed that only 25% of the FYAs claimed be allowed.


The Arrowtown formulation will inevitably make it more difficult to advise as to the likely success of tax avoidance schemes since, if a court takes the view that a transaction is abusive, it is relatively simple to say that having regards to the particular circumstances the legislation does not result in the desired tax advantage. This is so even though, on a strict literal reading, the terms of the statute appear to be satisfied. In his concluding paragraph Lord Walker acknowledged that commentators would complain that the Court might be said to have abandoned clarity and returned to uncertainty. His riposte, however, was:

"Any uncertainty there may be will arise from the unremitting ingenuity of tax consultants and investment bankers determined to test the limits of the capital allowances legislation."

The position following the decision in Tower MCashback is that when a tax avoidance scheme is put in place the desired tax saving will only be achieved if a court can be persuaded that taking a realistic view of the facts, the legislation, taking a purposive construction, operates to give the result the taxpayer is seeking. There seems to be an element of subjectivity involved and whilst the test is easy to formulate its actual application to a particular set of facts is difficult to predict. Indeed one is left with the sense that the courts are adopting what may best be described as a 'smell' test: if a scheme is considered abusive and unworthy then a court will hold that it has not achieved the desired result.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.