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Omar Al Heloo discusses the developments in UAE competition
law.
In brief:
The GCC States are still widely considered to be attractive
environments for investment.
The GCC States have carried out many initiatives to protect and
promote competition in the market.
A major beneficiary of any competition legislation will be the
legal sector.
This field requires cooperation between international firms and
local firms.
Competition rules are now taken very seriously and this trend
can be expected to emerge and spread within the GCC.
In the past twenty years, the six States of the Gulf Cooperation
Council (GCC), namely Saudi Arabia, Oman, UAE, Qatar, Kuwait and
Bahrain, have witnessed economic growth, together with development
in technology and investment opportunities in many sectors.
Currently, despite the cautious attitude of many investors due to
instability highlighted by the Arab Spring and amplified by the
world financial crisis, the GCC States are still widely considered
to be attractive environments for investment. This arises for many
reasons including the relatively stable political environment of
the GCC, together with the significant government support of many
sectors. Nevertheless, the GCC States face challenges in conforming
to the requirements of the World Trade Organization (WTO), for
instance in promoting the most fundamental doctrine of the free
market – competition.
With the objective of complying with WTO requirements and the
needs of adopting modern economic notions, the GCC States have
carried out many initiatives to protect and promote competition.
The Kingdom of Saudi Arabia was the first GCC State to introduce
competition law by virtue of the Royal Resolution No. (M/25) dated
22 June 2004, which came into force on 31 December 2004. This was
followed by Qatar, by Law No.19/2006 concerning protection of
competition and prevention of the monopolistic practices, and then
Kuwait by Law No.10/2007 concerning protection of the
competition.
The UAE, Bahrain and Oman are currently in the process of
establishing specific laws to protect competition and prevent
monopolistic practices. It should be noted, however, that these
countries already have laws in place that address some aspects of
the issues. Moreover, with the aim of establishing a Gulf common
Market, the Supreme Council of the GCC has established a
specialised committee to discuss and prepare the draft of a unified
competition law for the GCC.
One of the major beneficiaries of any such legislation will be
the legal sector. As the concept of anti-trust becomes more
enshrined in legal systems of GCC States, corporations and
investors will turn to law firms specialising in this field.
Accordingly, lawyers will need to be involved in forming and
determining the direction to be adopted by the bodies and
committees for protection of competition in the GCC.
Moreover, this field may lead to further cooperation between
international firms with experience in dealing with competition
cases and local firms who have experience in domestic laws,
traditions and culture. Furthermore, experienced anti-trust lawyers
and legal firms, in accordance with their social responsibilities
as well as their personal interests, will contribute to training
and developing young local lawyers who seek to specialize in
competition law.
Accordingly, the introduction of competition legislation will
help establish a new and expanded practice area for law firms and
lawyers to deliver in the GCC States especially given that
competition rules are now taken very seriously in the region. For
example, in Saudi Arabia the General of the Competition Protection
Council has recently filed five separate claims against eight
companies operating in the field of medical gases in the Kingdom.
This is just one of many examples of how the Kingdom of Saudi
Arabia is enforcing its newly enacted laws. This trend can be
expected to emerge and spread within the GCC.
On the other extreme, local traders in the GCC in recent decades
have established important and highly lucrative agency
relationships with foreign manufacturers. Often these relationships
are exclusive and difficult to modify or terminate under prevailing
laws. This is one example of an area of law where WTO obligations,
competitive practices and legislation will give rise to interesting
debate and developments in the GCC.
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.
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