Forming a government committee to look into the disputes of the “agency parties” before litigation
A draft law approved by the National Bank: The business of commercial agencies is limited to citizens
The draft law regulating commercial agencies aims to enhance transparency.
Emirates today
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A draft federal law regarding the regulation of commercial agencies, approved by the Federal National Council, the day before yesterday, in its closing session of the current session, concluded that the business of a commercial agency within the state is limited to citizens.
He stressed that commercial agency contracts expire at the end of the contract term, unless the term is renewed by the "contractors' agreement."
The draft law created the establishment of a governmental committee called the “Commercial Agencies Committee”, to consider the dispute that arises between the parties to the commercial agency registered with the Ministry, and the lawsuit is not accepted before the judiciary in this regard before being presented to the committee.
In detail, the closing session of the current session witnessed the adoption of a federal draft law regulating commercial agencies, aimed at encouraging local investment, attracting foreign investment, enhancing transparency, and balancing the relationship between the agent and the principal.
The Minister of Economy, Abdullah bin Touq Al-Marri, stressed during the session that the law regulating commercial agencies currently in force in the country includes many problems, the most prominent of which is its inclusion of excessive and unjustified protection for the agent that caused the reluctance of new companies and suppliers to sign exclusive commercial agency contracts, and damage In the interest of the national commercial agent, if he wishes to terminate the commercial agency contract before its term, what may expose him to a claim for compensation from the principal.
The most prominent articles of the federal draft law regarding the regulation of commercial agencies included an article on “Practicing commercial agency business,” which stated that “the practice of commercial agency business in the state is limited to individual citizens, companies and institutions that are wholly owned by any of the following: a natural person, a citizen, a person A public legal person, a private legal person owned by public legal persons, a private legal person wholly owned by natural citizens.
The same article also stipulated that “With due regard to Clause (1) of this Article, the Council of Ministers, upon the recommendation of the Minister, may allow any international company, even if it is not owned by citizens, to conduct commercial agency business for its owned products, under the conditions and within the limits determined by it in this The matter and when the following conditions are met: The commercial agency shall not have a commercial agent within the state, The commercial agency shall be new and not previously registered in the state.
Taking into account the text of clause (4) of this article, public shareholding companies incorporated in the state are excluded from the provisions of clause (1), where the percentage of the state’s citizens’ contribution to its capital is not less than 51%.
According to the draft law, the Council of Ministers, upon the recommendation of the Minister, issues a decision regarding the procedures, controls and conditions necessary for companies to carry out commercial agency business in the country, explaining that “it is not permissible to conduct commercial agency business in the country, except for those who are registered in the commercial agencies register in the ministry, and no Any commercial agency that is not registered in the Register shall be considered valid.
He stated that for the validity of the commercial agency, the agent must be linked to the original principal by a written and notarized contract, and that the commercial agency be registered in the commercial agencies registry.
The article of the commercial agency contract states that “the commercial agency contract is considered in the interest of the joint contractors, and the provisions of this law apply to it, and any agreement to the contrary shall not be considered.
State courts are competent to consider disputes that arise in connection with the commercial agency contract.
With regard to the termination and expiry of the agency, “the commercial agency contract shall terminate in any of the following cases: Expiry of the contract term unless that term is renewed by agreement of the contracting parties, by the will of either the principal or the agent based on the terms and conditions of the commercial agency contract, and by agreement of the contracting parties before the end of the contract term and the issuance of a court ruling to terminate the commercial agency, and in any other case mentioned in the law.
Regarding the “devolution of assets,” the draft law indicated that upon the realization of any of the cases set forth in Clause (1), and unless the two parties agree otherwise, the assets of the old agent shall devolve to the new principal or agent at fair value when the following conditions are met: (Goods, merchandise, materials, spare parts, machines, etc.) related to the commercial agency contract, and to be agreed upon, and in the possession of the old agent at the time of the end of the commercial agency contract, and there is no restriction on the transfer of ownership to the new agent.
The Council introduced an article entitled “Controls and provisions regarding the termination or non-renewal of the commercial agency contract,” which indicated that “in the event that the commercial agency contract is terminated, the party wishing to terminate the contract, based on the terms and conditions of the commercial agency contract, shall send a notification to the other party of its desire for early termination of the contract. Commercial agency, provided that the notification period is not less than one year, or before the expiry of half the period (whichever is less).
Either party may submit a detailed report prepared by a specialized professional body regarding settlement of receivables, guarantees of non-interruption of after-sales services from the state’s markets, assessment of assets, expected damages and other details.
The party who did not consent to the termination of the commercial agency contract, based on the terms and provisions of the contract, has the right to resort to the Commercial Agencies Committee to challenge the request for termination of the contract.
The two parties may provide the committee with the report of the specialized professional body, provided that the committee decides on the request within 120 days from the date of its registration.
The expiry of this period without the issuance of a decision shall be considered as a rejection of the appeal, and the commercial agency contract shall continue to be valid until the expiry of the notification period or the resolution of the dispute by the committee, whichever is achieved later.
With regard to the non-renewal of the commercial agency contract, the draft law stipulates that “the party who wishes not to renew the commercial agency contract must give a notification to the other party of non-renewal one year before the end of the agency contract term, or before the expiry of half of the term, whichever is less.” .
With regard to the change or amendment in commercial agencies, the agent or his legal representative, or his heirs in the event of his death, must submit a request to the Ministry regarding any change or amendment to the entry and include it in the commercial agencies register within 60 days from the date of its knowledge, and the Ministry shall notify the federal authorities And the local authorities concerned with customs affairs, the competent authorities and the relevant authorities, with the amendments and changes.
The article “Cancellation of the registration from the commercial agencies register” stipulates that “the agent or whoever legally represents him, if one of the conditions stipulated in this law is removed from him, or if the commercial agency expires and is not renewed, must submit to the Ministry a request to write off the commercial agency registration from Register the commercial agencies within 60 days at most from the date of realization of the reason for cancellation.
The Ministry shall cancel the entry from the register, and it may cancel the entry on its own when it verifies that any of the conditions stipulated in the law has been removed after 10 working days from notifying the concerned parties.
The Ministry shall notify the federal and local authorities concerned with customs affairs, the competent authority and the relevant authorities of the cancellation decision.
The “Prohibitions” article also stipulated that “it is not permissible to bring in goods, products, manufactures, materials or other funds subject to any commercial agency registered in the Ministry with the intention of trading without the agent, and the customs departments should not release these imports received without The agent shall only with the approval of the ministry or the agent, and the customs departments shall notify the ministry of that if the approval is from the agent, and the customs departments, the concerned authorities and the competent authorities shall seize those imports at the agent’s request and deposit them in the port warehouses or the importer’s warehouses until the dispute is settled, and the ministry may enter the goods Goods and provision of services are subject to the commercial agency contract on a temporary basis.
The article “Final Provisions” stipulated that “the provisions of the termination of the commercial agency stipulated in items (a) and (b) of Article (9/1) of the law do not apply to commercial agency contracts in force at the time of the issuance of the law, except after the lapse of two years from the date of the issuance of the law. Enforcement of the law, and as an exception to the previous clause, the provisions of the termination of the commercial agency stipulated in clauses (a) and (b) of Article (9/1) of this law do not apply to commercial agency contracts in force at the time of the issuance of this law except after the lapse of 10 years from the date of the law’s entry into force. It is effective for commercial agencies that have been registered by the same agent for more than 10 years, or for commercial agencies in which the agent’s investment exceeds 100 million dirhams, and the volume of the agent’s investments is evaluated in accordance with the standards and controls issued by the Minister
Exclusive Resources
The federal draft law on the regulation of commercial agencies defines a mechanism for introducing goods and services into the state during the conflict period between the agent and the client (if it occurs), as it authorized, with the approval of the Ministry, and for a temporary period, the entry of goods or services into the state from exclusive sources, provided that the client is responsible for the duration That period is vis-à-vis the old agent for the compensation that may be awarded by the competent courts by a final judgment, while the ministry, by a ministerial decision, undertakes the regulation of the terms and conditions for admission for the temporary period referred to in order to achieve limiting the flow of services and goods during the duration of the dispute.
Subject to Clause (2) of this Article, and for the purposes of estimating the value of assets, either the principal or the agent may file a lawsuit before the court in whose jurisdiction the commercial agency’s main office is located to oblige the other party to the value of the assets or the amount of the commission as estimated by the court.
Committee for "Commercial Agencies"
The draft federal law regarding the regulation of commercial agencies established a committee called the “Commercial Agencies Committee”, whose formation, system of work, remunerations of its members, and fees for handling disputes before it are issued by a decision of the Council of Ministers, so that it is competent to consider the dispute that arises between the parties of the commercial agency registered with the Ministry, nor The case is accepted before the judiciary in this regard before being presented to the committee.
The committee must begin examining the dispute within 22 working days from the date of submitting the request for consideration of the dispute to it in the event that the request is complete, or from the date of completing the required documents.
The committee may seek the assistance of whomever it deems appropriate to perform its duties, and in all cases it must decide on the dispute within 120 days from the date of submitting the request, otherwise any party may resort to the judiciary within a day from the date of expiry of the deadline.
According to the draft law, the committee’s decision is not accepted for appeal and the dispute is submitted to the judiciary after 60 days from the date of notification of the committee’s decision, and the committee’s decision in this case has the force of an executive document.
Any commercial agency that is not registered in the Commercial Agencies Register shall not be considered legally valid.
Commercial agency contracts expire at the end of their term, unless they are renewed by agreement of the contracting parties.
The council introduced an article “Controls and Provisions Regarding Termination or Non-renewal of Agency Contract”.
Those wishing not to renew the commercial agency contract shall inform the other party one year before the expiry of the contract term.
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