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Are there dangers in doing business in UAE?

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The Dubai International Financial Centre (DIFC) in its online advertising claims to offer a world-class, thriving, and stable business environment. It says it provides a supportive ecosystem designed to assist businesses in starting up, growing and achieving success.

One measure of its right to claim such credentials is the fact that other Emirate states, such as Abu Dhabi and Ras Al Khaimah (RAK) have entered into a Memorandum Of Agreement with the DIFC in Dubai where they agree to arbitration and claims to be heard there if its contractual obligation specifies this.

In turn, the DIFC wishes to be known and acknowledged as an internationally safe place to litigate and arbitrate. Many international law firms now have offices there.

In addition to this Emirates has a mutual agreement with HMCS to recognize each other judgements and this by logical extension relates to enforcement.

Many individuals and multinational companies are now only realising the implications of this.

One example is the Azima vs Ras Al Khaima case, which rumbles on not only in the High Courts of London but also in the District Court for the Middle District of North Carolina, in which a private investigator called Nicholas Del Rosso has been accused of hacking American aviation businessman Farhad Azima.

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The High Court in London granted the continuation of a worldwide freezing order against the Ras Al Khaimah Investment Authority (RAKIA), the sovereign wealth fund of Ras Al Khaimah, an Emirate of the UAE.

Azima, through his lawyers in an 180-odd page filing, claims that Del Rosso, a former Metropolitan policeman and private investigator originally out of London,  hacked his emails on behalf of a U.S. law firm called Decherts.

In addition to this, it is alleged that Del Rosso hacked the files of another law firm not directly related to Azima. The claim is an appeal against a ruling restricting access to discovery of Del Rosso’s files.

Del Rosso is indeed an old hacker. He has worked for Kroll in the past and was involved in hacking many years ago in the British Airways – Virgin dispute. According to Brian Basham, a now-retired PR expert, Del Rosso played both sides of the field and could not resist a very good lunch.

Azima is not only rejoicing in the World Wide Freezing Order granted last month but is also pursuing RAK for damages over £20 million pounds in the UK.

For Ras Al Khaima however, the damage may well be greater and ongoing. The Ras Al Khaima Investment Authority welcomes inward investment and has also taken investment positions in some of these, possibly as a shareholder.

Ras Al Khaima’s MOA with Dubai means that it must enforce any litigation including World Wide Freezing Orders, with consequential implications for any other business or individual based in Ras Al Khaima. 

Simply put there may well be a danger of legal action and enforcement by Azima against any entity that engages in a joint enterprise with RAK Investment Authority and has assets that could be seized or litigated.

DIFC has been approached for a comment but has yet to reply.

The author may be contacted at [email protected]

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