Legal Analaysis

What is Intellectual Property Due Diligence in Media Mergers & Acquisitions

In today's dynamic media landscape, mergers and acquisitions (M&A) are common strategies employed by companies to expand market presence, acquire new technologies and capitalise on emerging opportunities.

However, given the critical role of intellectual property (IP) in the media industry, conducting thorough due diligence is essential to mitigate risks and ensure the success of M&A transactions.

This study provides a detailed analysis of the due diligence process concerning intellectual property rights (IPR) in media mergers and acquisitions.

Intellectual property assets, including copyrights, trademarks, patents, trade secrets and proprietary technologies, are invaluable assets in the media sector.

They underpin content creation, distribution, licensing, and revenue generation. Therefore, understanding and safeguarding these assets are paramount in M&A transactions to preserve value and mitigate legal and financial risks.

What are the Objectives of IP Due Diligence?

  • Identify and assess all intellectual property assets owned or utilised by the target company.
  • Verify ownership rights, validity, and enforceability of intellectual property rights.
  • Evaluate the strength, value, and marketability of the intellectual property portfolio.
  • Identify potential risks, liabilities, and compliance issues related to intellectual property.
  • Develop strategies for protecting and maximising the value of intellectual property post-acquisition.

What ate the Key Components of IP Due Diligence?

1. Identification of Intellectual Property Assets: Conduct a comprehensive inventory of all IP assets, including content, brands, technologies, and patents.

2. Ownership and Title Verification: Verify ownership rights, chain of title, and validity of registrations for each IP asset.

3. Assessment of Rights and Licenses: Review agreements, licenses, and contracts to ascertain the scope of rights granted and any restrictions or obligations.

4. Evaluation of IP Portfolio: Assess the strength, uniqueness, and marketability of each IP asset in relation to the target company's business objectives.

5. Risk Analysis and Compliance: Identify legal, regulatory, and infringement risks associated with IP assets and assess compliance with applicable laws and standards.

6. Litigation and Enforcement History: Review past and pending litigation, disputes, or enforcement actions related to IP rights and evaluate potential liabilities.

7. Technology and Innovation: Evaluate the target company's R&D activities, innovation pipeline, and proprietary technologies to assess the value of IP assets.

8. Complexities of Digital Rights Management: With the proliferation of digital content, managing rights and licensing agreements becomes increasingly complex.

9. Globalisation and Cross-Border Issues: M&A transactions involving media companies often involve international IP rights, requiring careful consideration of cross-border regulations and jurisdictional issues.

10. Rapid Technological Advancements: Emerging technologies such as artificial intelligence, virtual reality, and blockchain pose new challenges and opportunities in IP due diligence.

11. Cultural and Creative Considerations: Media content often involves cultural sensitivities and creative nuances that must be addressed in IP due diligence.

Intellectual property due diligence is a critical aspect of M&A transactions in the media industry, ensuring that buyers understand the value, risks, and opportunities associated with IP assets.

By conducting thorough due diligence, companies can mitigate risks, protect their investments, and position themselves for long-term success in the competitive media landscape.

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Legal Framework and Regulations Governing Property Mortgages in UAE

The real estate market in the UAE has experienced significant growth, attracting investors globally. An important aspect of property ownership in the UAE is having a thorough understanding of the legal framework governing property mortgages.

It is essential for property owners, investors and lenders involved in real estate dealings in the UAE to have a solid grasp of UAE property mortgage laws.

By familiarising themselves with the fundamental concepts, processes and legal considerations highlighted in this article, stakeholders can effectively navigate mortgage transactions and safeguard their interests in the ever-evolving UAE property sector.

Key Concepts of UAE Property Mortgage Law

Definition: A mortgage is a legal contract where a property owner (mortgagor) pledges their property as collateral to secure a loan from a lender (mortgagee). The lender maintains a lien on the property until the loan, including principal and interest, is fully repaid.

Mortgage Registration: All property mortgages in the UAE must be registered with the respective emirate's land department to be legally binding. This process involves submitting the mortgage agreement and necessary documents to the land department and paying the required registration fees.

Mortgage Priority: The priority of a mortgage determines its position concerning other creditors' claims on the property. Typically, mortgages are ranked based on their registration date and time with the land department, with earlier registrations holding higher priority.

Rights and Obligations: Property mortgages in the UAE grant specific rights and responsibilities to both the mortgagor and mortgagee. While the mortgagor retains property ownership and possession, the mortgagee has the authority to enforce the mortgage in case of default by the mortgagor.

Procedures for Property Mortgage Transactions

Negotiation and Agreement: The process commences with negotiations between the mortgagor and mortgagee to establish the terms and conditions of the mortgage, such as loan amount, interest rate, repayment schedule, and other relevant terms.

Execution of Mortgage Agreement: Upon reaching a mutual understanding, the parties proceed to execute a mortgage agreement that outlines the terms of the mortgage. This agreement must adhere to the legal requirements set forth by UAE law and must be signed by all parties involved.

Registration Process with Land Department: Following the execution of the mortgage agreement, along with the submission of necessary documentation, the agreement is presented to the land department of the relevant emirate for registration. Once registered, the mortgage is officially documented in the land registry, serving as notice to third parties regarding the mortgagee's stake in the property.

Funds Disbursement: Upon successful registration, the mortgagee releases the loan funds to the mortgagor in accordance with the agreed-upon terms. The mortgagor can utilise these funds for property acquisition, development, or other purposes, as outlined in the mortgage agreement.

Legal Considerations for Property Stakeholders

Conducting Due Diligence: Prior to finalising a mortgage agreement, property owners and investors should conduct thorough due diligence on the property, lender and mortgage terms to mitigate risks and ensure compliance with legal regulations.

Sharia Compliance: In instances where Islamic financing structures like Murabaha or Ijara are utilised, all parties must ensure adherence to Sharia principles governing financial and property transactions.

Default and Foreclosure Awareness: Property owners should understand the implications of defaulting on mortgage payments, which could lead to foreclosure proceedings initiated by the mortgagee to recover the outstanding debt by selling the mortgaged property.

(The writer is a legal associate at Dubai-based NYK Law Firm)

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Firms can be held responsible for Crimes Committed by their Representatives

In cases where a company fails to meet its obligations, such as paying government taxes, complying with laws, or adhering to the provisions of its Articles of Association and Memorandum of Association, the issue of liability arises.

The question then arises: can those decision-makers responsible for running the business be held accountable under the law?

Corporate criminal liability is a looming concern in the modern business landscape, especially within the legal framework of the United Arab Emirates (UAE).

The scope of potential crimes for which companies can be held accountable is broad and encompasses a variety of offenses outlined in the Federal Penal Code.

Article 21 of Federal Decree-Law No. 32 of 2021, known as the Companies Law, came into effect on January 2, 2022, replacing Federal Law No. 2 of 2015. Concurrently, Article 66 of the Penal Code delineates the framework for corporate criminal liability in the UAE.

Article 66 of the Penal Code establishes that a company can be held accountable for any offense outlined in the Penal Code committed by one of its representatives acting in its favour or on its behalf.

However, the Dubai Court of Cassation has ruled that a company cannot be criminally liable for the actions of its employees if the employee in question acted negligently, without intent, or without representing the company.

Corporate Liability

The new Companies Law stipulates that a company obtains "legal personality" upon its incorporation, establishing a corporate veil between the company and its shareholders and managers, although exceptions exist where this veil can be pierced.

Regarding corporate criminal liability in the UAE, Article 66 of the Penal Code outlines that legal entities, excluding government agencies and official departments, can be held criminally accountable for crimes committed by their representatives, directors, or agents acting on their behalf.

However, the Dubai Court of Cassation clarified that a company may not face criminal responsibility for the actions of its employees if the employee was negligent, acted unintentionally, or was not acting on behalf of the company.

Managers of a company are typically obligated to exercise due care, and failure to do so may result in personal liability. For instance, managers can be held liable if their actions cause harm, breach obligations, or constitute gross misconduct or negligence, including fraudulent activities.

Previously, managers were held personally accountable for issuing bounced cheques due to insufficient funds, which was deemed a crime under Article 401 of Federal Law No. 3 of 1987.

However, the new Penal Code decriminaliSed this act, except for specific exceptions. Despite this, beneficiaries of bounced cheques retain the right to pursue civil claims, including seizing assets owned by the issuer.

Enforcement Authorities

Prosecuting cases related to Corporate Criminal Liability in the UAE involves three authorities:

Police Department: Responsible for safeguarding the public, collecting initial statements, arresting suspects, conducting investigations and executing orders from the Public Prosecution to aid in the investigative process.
Public Prosecution’s Office: Initiates criminal cases on behalf of society members, overseeing the entire process from investigation to indictment or case dismissal. The Public Prosecution holds exclusive jurisdiction to initiate and prosecute criminal proceedings until a final judgment is rendered.
Criminal Courts: Handle criminal cases initiated by federal or local prosecution in each emirate. These courts include courts of first instance, courts of appeal and a supreme court, such as the Court of Cassation in Abu Dhabi.

Damages and Compensation

Victims of crimes have the option to request that a compensation claim be attached to the criminal charges and considered by the Criminal Court, as stipulated in Article 23 of the Criminal Procedural Law. This compensation is determined upon the establishment of criminal liability.

In practice, once a conviction and sentence are issued, the Criminal Court transfers the civil claim to the Civil Court per Article 27 of the Criminal Procedural Law. The Civil Court then assesses the extent of damages, as the conviction implies liability.

While the UAE does not have a class action system, multiple victims can collectively present their compensation claims to the Criminal Court.

Additionally, victims of white-collar offenses can seek compensation for losses through the Civil Courts, where a claim for harm (similar to tort) must demonstrate the act, sustained damage and the causal relationship between the act and the damage.

Procedure for Prosecuting a Company

The procedure for prosecuting a company for a white-collar criminal offense in the UAE is regulated by the Criminal Procedural Law, similar to other criminal prosecutions in the country. Article 9 of the Criminal Procedural Law grants exclusive jurisdiction to the Public Prosecutor to initiate and oversee criminal proceedings. The process unfolds as follows:

Filing a Complaint: A complaint can be lodged either with the Public Prosecution directly or with a Judicial Police Officer as per Article 12 of the law. Alternatively, the Public Prosecutor may initiate criminal proceedings independently.
Police Investigation: If a complaint is filed with the police, they investigate the alleged offense. This includes interviewing the complainant, the accused, and other witnesses and compiling all evidence into a case file.
Referral to Public Prosecutor: The case file is then forwarded to the Public Prosecutor, who may conduct further investigation with the assistance of Judicial Police or investigating officers, especially for more serious offenses. The Public Prosecutor evaluates the evidence and decides whether to proceed with the case or dismiss the complaint.
Decision by Public Prosecutor: Based on the evidence gathered, the Public Prosecutor determines whether to issue an indictment against the accused and refer the matter to court or dismiss the complaint.
Collection of Evidence by Judicial Police: The Judicial Police are empowered to collect necessary information and evidence for the investigation and indictment of criminal offenses. This includes interviewing complainants, victims and accused individuals, taking statements and engaging expert assistance.
Specialist Departments: Specialised departments within the police and Public Prosecutor’s office handle specific types of crimes, such as financial crimes (e.g., bribery, money laundering, abuse of power, embezzlement and misuse of funds) and cybercrimes. These departments are equipped to deal with the complexities of such offenses effectively.

Case Law

In November 2022, the Dubai Financial Services Authority (DFSA) levied a fine of $1.12 million against the DIFC branch of Bank of Singapore Limited for multiple violations of DFSA regulations, notably related to deficient anti-money laundering measures.

Additionally, the DFSA imposed its most substantial fine to date on an individual, Arif Naqvi, the former CEO and founder of Abraaj Group.

Naqvi was fined approximately $135 million, a penalty upheld by the Financial Markets Tribunal. This significant fine followed the DFSA's determination that Naqvi was complicit in misleading and defrauding investors concerning the misuse of their funds.

As a consequence, Naqvi was also subjected to restrictions preventing him from performing any functions within or from the DIFC.

As eloquently stated by Martin Luther King Jr., "The moral arc of the universe is long, but it bends towards justice." Therefore, in cases where a company or its members commit civil or criminal offenses, they can indeed be held accountable under the law.

This principle is crucial in a jurisdiction like the UAE, which hosts several major entities and thus recognises the importance of holding companies and their members accountable for breaches of rules, regulations, or laws.

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Is Mediation Act of 2023 the Future of the Indian Legal System?

India, with its dense population, sees numerous disputes, whether civil or commercial, which remain backlogged in the already burdened judiciary system.

Timely justice delivery is hindered, as evidenced by the District Judiciary alone shouldering approximately 44.79 million pending cases in January 2024, while the High Courts had a backlog of 6.2 million cases during the same period.

The Supreme Court of India, not immune to this dilemma, had 69,766 cases pending as of July 1, 2023. This dire situation emphasises the urgent need for alternative dispute resolution (ADR) methods that are quicker, less costly and more flexible than the traditional adversarial system.

The Mediation Act 2023 represents a significant evolution in India's approach to dispute resolution, further leveraging technology to enhance access to justice.

India's journey towards recognising mediation in its legal framework dates back to the Industrial Disputes Act of 1947, which introduced the concept of conciliators to resolve industrial disputes.

Subsequent legal reforms, such as the Legal Services Authorities Act of 1987 and the Arbitration and Conciliation Act of 1996, further strengthened the recognition of mediation. However, the Mediation Bill of 2021 laid the foundation for the comprehensive Mediation Act 2023.

The Bill aimed to introduce a thoughtfully curated institutional dispute-resolution mechanism backed by collaborative problem-solving and the preservation of relationships.

It mandated that all civil and commercial disputes undergo mediation before entering the court arena, underscoring the significance of exhausting alternative remedies before resorting to litigation. This made the standing committee question the consent and voluntary nature of mediation.

Bringing strategic amendments to the bill, at its core, the Mediation Act 2023 aims to induce a culture of amicable settlement while alleviating the burden on the overburdened judicial system.

It provides a more structured framework for mediation, both offline and online, allowing disputing parties to resolve their issues with the assistance of a neutral third party, the mediator.

Key provisions of the Act include mandating mediation as a prerequisite for civil and commercial disputes before resorting to litigation; setting clear guidelines for mediator qualifications, procedural norms and confidentiality aspects, including online mediation to leverage technology and bridge geographical barriers and establishing a regulatory body for mediator registration and oversight.

The Mediation Act 2023 thus stands in the continuum of revolutionising India's dispute resolution landscape. By promoting the use of mediation, the Act will expedite the resolution process and empower disputants to shape their outcomes collaboratively.

The Act’s additional feature of online mediation further addresses logistical barriers and improves access to justice, especially in remote regions.

Moreover, the Act's focus on quality assurance through mediator accreditation and oversight cements the integrity of the mediation process.

By validating mediation as a credible and effective mechanism, the Act instills confidence in stakeholders and encourages greater adoption of alternative dispute resolution methods.

Lastly, the Mediation Act 2023 heralds a new dawn of dispute resolution in India, characterised by efficiency, accessibility and fairness. By accepting mediation and leveraging technology, India is on the brink of overcoming the daunting challenges that have long obstructed its judicial system.

As The Mediation Act 2023 comes into effect and its provisions are implemented, it signifies a transformative reform towards invoking harmony and equality in society.

In the journey towards justice, the Mediation Act 2023 will play a crucial role in guiding India towards a future where disputes are resolved amicably, efficiently and impartially.

(Roopa Shetty is the Founder of Bangalore-headquartered law firm Lex Situs)

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Want to be Someone’s Hero? Organ Donation Laws in the UAE Illuminate Paths of Lifesaving Bravery

Have you ever pondered the profound impact of organ donation, envisioning the potential to save lives and instill hope in others? Well, prepare yourselves, for the UAE has well-structured provisions in place to regulate organ donation and transplantation. This legislative framework is not merely a matter of bureaucratic procedure; it is a testament to the nation's commitment to fostering ethical practices and ensuring the welfare of both donors and recipients.

Do you wish to be someone's hero? Well, hold onto your hats because current laws on organ donation and transplantation in the UAE might just turn that dream into reality!

Let's dive into what these laws mean for everyday heroes!

What You Need to Know

Organ donation and transplantation are critical medical procedures that can save lives and improve the quality of life for individuals suffering from organ failure. In the UAE, there are specific legal provisions in place to regulate organ donation and transplantation. In this article, we'll explore the legal framework surrounding organ donation and transplant in the country, including the key regulations, processes, and considerations for individuals and healthcare professionals involved.

Understanding the Legal Framework

The UAE has established a comprehensive legal framework to govern organ donation and transplantation, primarily outlined in Federal Law No. 5 of 2016 Concerning Human Organs and tissue transplantation. This law sets forth the regulations and guidelines for the donation, retrieval, preservation, and transplantation of human organs and tissues within the country.

Key Provisions and Regulations

1.     Consent and Authorisation

According to UAE law, organ donation is strictly voluntary and requires the explicit consent of the donor or their legal representative. Donors must provide informed consent for the donation of their organs or tissues, and this consent cannot be coerced or obtained under duress.

2.     Allocation and Distribution

The law establishes mechanisms for the fair and transparent allocation and distribution of organs and tissues among eligible recipients. This includes criteria for determining priority based on medical need, compatibility, and other relevant factors.

3.     Transplantation Procedures

Organ transplantation procedures must be performed by qualified healthcare professionals in authorized medical facilities licensed to conduct such procedures. Strict protocols are in place to ensure the safety and efficacy of transplantation procedures, including pre-transplant evaluations, surgical protocols, and post-operative care.

4.     Prohibition of Commercialisation

The law explicitly prohibits the commercialization of organ donation and transplantation, including the sale, purchase, or exchange of organs and tissues for financial gain. This measure aims to prevent exploitation and unethical practices in the organ transplantation process.

5.     Confidentiality and Privacy

Organ donation and transplantation involve sensitive medical information, and strict confidentiality measures are in place to protect the privacy of donors, recipients, and their families. Medical records and personal information related to organ donation and transplantation are treated with the utmost confidentiality.

Oversight and Regulation

Regulatory authorities in the UAE oversee and regulate all aspects of organ donation and transplantation to ensure compliance with legal requirements and ethical standards. These authorities monitor transplantation centers, establish protocols for organ procurement and transplantation, and enforce penalties for violations of the law.

Considerations for Donors and Recipients

For individuals considering organ donation or in need of a transplant, it's essential to understand the legal provisions and requirements in the UAE. Here are some key considerations:

Informed Consent: Donors must provide informed consent for organ donation, understanding the risks, benefits, and implications of their decision.

Medical Evaluation: Recipients undergo comprehensive medical evaluations to assess their eligibility for transplantation and ensure compatibility with donor organs.

Legal Representation: Individuals unable to provide consent for organ donation due to incapacitation or legal incapacity may designate a legal representative to make decisions on their behalf.

Organ donation and transplantation play a vital role in saving lives and improving health outcomes for individuals in need. In the UAE, a robust legal framework governs organ donation and transplantation, ensuring ethical practices, protecting the rights of donors and recipients, and promoting transparency and accountability in the process.

By understanding the legal provisions and requirements, individuals and healthcare professionals can navigate the organ donation and transplant landscape with confidence, contributing to the advancement of healthcare and the well-being of society as a whole.

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Terror Suspects Plotted Violence, Attack on UAE Territory, State Security Court Hears

Individuals affiliated with the banned Muslim Brotherhood clandestinely formed a terrorist group with the aim of carrying out an attack on UAE territory, an Abu Dhabi court heard.

Prosecutors asserted that the 84 defendants facing terrorism charges in the case played significant roles within the group known as the "Justice and Dignity Committee." This organisation aimed to provoke public unrest by coordinating protests and demonstrations against the state, often resulting in violent confrontations with security forces, they said.

The defendants are being tried at the Abu Dhabi Federal Court of Appeal, or the State Security Court.Abu Dhabi Federal Court of Appeal convened to address a significant case involving 84 defendants accused of establishing a clandestine terrorist organisation known as the "Committee for Justice and Dignity."

Prosecutors alleged that the defendants, predominantly associated with the outlawed Muslim Brotherhood, conspired to incite violence and unrest within the UAE. The prosecution presented extensive evidence during the session, including technical reports, audiovisual materials, and written documents, highlighting the defendants' purported involvement in orchestrating acts of terrorism on UAE soil.

The court heard detailed accounts of the defendants' alleged activities, which purportedly aimed to sow public dissent through organised protests and violent clashes with security forces.

According to the prosecution, the defendants utilized the "Justice and Dignity Committee" as a front to mobilise support for their extremist agenda, seeking to undermine state authority and stability.

The prosecution emphasised the gravity of the charges, asserting that the defendants were not merely engaged in dissent but actively pursued acts of violence and terrorism against the UAE government. Confessions obtained from the accused were cited as corroborating evidence, consistent with the findings of state authorities' investigations.
It was clarified during the proceedings that this case was entirely separate from a previous legal matter in 2012, with no relation to any retrial. The prosecution reiterated the distinct nature of the charges and underscored the seriousness of the defendants' alleged offenses.

Throughout the session, defense lawyers representing the accused were present, alongside family members of the defendants. The court scheduled the next hearing for February 15, allowing the prosecution to continue presenting its case against the defendants.

Dr Hamad Saif Al Shamsi, the UAE's Attorney-General, played a pivotal role in the proceedings, having referred the defendants, primarily comprising members of the Muslim Brotherhood, to trial for their purported roles in establishing a clandestine organisation aimed at committing acts of violence and terrorism within the UAE.

The case has drawn significant attention, reflecting the UAE government's commitment to combating terrorism and preserving national security. As the trial progresses, it remains a focal point in the ongoing efforts to uphold law and order within the country.

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