Current Awareness

20191115- ALC- UAE Economic Substance Regulations

Dr. Ghassan held a seminar at the Middlesex University Dubai

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On 10th and 11th November 2019 Dr. Ghassan held a seminar on the “UAE Economic Substance Regulations” at the Middlesex University’s Institute for Entrepreneurship and Business Excellence (IEBE) in Dubai. Dr. Ghassan gave an insight on the backgrounds of the “UAE Economic Substance Regulations” and the impacts of the “Exchange of Information”.

DIFC Enacts New Employment Law 2019

DIFC Enacts New Employment Law

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The new DIFC Employment Law, Law No. 2 of 2019, which was enacted on 30th May 2019 and will come into force on 28 August 2019, revised its provisions regarding inter alia sick pay, end-of-service gratuity, and settlements in a manner that protects and balances the interests of both employers and employees. Furthermore, it introduces new regulations such as provisions regarding paternity leave and anti-discrimination. Regarding its applicability, where a claim has been initiated on the basis of the old DIFC employment law, any provisions which may apply to such proceedings will be deemed to survive the repeal of the old law, if no equivalent provision exists under the new law. Whereas, any to be commenced legal proceedings must be interpreted under the new DIFC Employment Law. It is important to note that the new law mandates that proceedings must be initiated no later than 6 months following the employee’s termination date.

We have listed some of the key changes of the new DIFC Employment Law in summarized form for you.

Sick pay

The new provisions include a reduction of the statutory sick pay. Now, an employer shall pay sick pay to an employee at 100% of the employee’s daily wage for the first 10 work days of sick leave taken in a 12 month period; 50% of the employee’s daily wage for the next 20 work days of sick leave taken in the same 12 month period. The employee shall not be entitled to receive any wage for any additional sick leave taken in the same 12 month period. In cases where an employee takes more than an aggregate of 60 work days of sick leave in a 12 month period, the employer may terminate the employment contract with immediate effect on written notice to the employee.

Penalties for late payment

The new law also limits the application of late fines for not paying salary or end-of-service settlements on time. Penalties will only be triggered if the amount due and not paid to an employee is held by a Court to be in excess of an employee’s weekly wage. A late payment penalty will be waived entirely by a Court in respect of any period during which a dispute is pending in the Court or in case the employee’s unreasonable conduct is the material cause of the employee failing to receive the amount due from the employer. Moreover, penalties will be capped at 6 months’ daily wage as a result of a new 6 month limitation period for employees to bring claims.

End of service gratuity / pension

Regarding the end of service gratuity, the new law introduced some key changes regarding how and when it will be paid. Under the old law the employee’s basic wage was the basis for calculation of the end of service gratuity. As per the new law the employee’s basic wage for the purpose of the end of service calculation shall not be less than 50% of the employee’s annual remuneration package (including an employee’s allowance but excluding bonuses, grants, commission or other payments which are discretionary, non-recurring expressly agreed not to form part of an employee’s wage or allowance).

One important change is that the end of service gratuity will be payable even in cases where the employee was terminated for cause.

Furthermore, instead of the end of service gratuity, employees may choose to receive pension contributions into a non-UAE retirement fund (or similar scheme) instead of receiving a gratuity payment, provided the contributions made by an employer are not less than the gratuity payment the employee would have been entitled to receive.

Settlement agreements

The requirements of the new DIFC Employment Law are minimum requirements and a provision in an agreement to waive any of those requirements, except where expressly permitted by law, is void in all circumstances. However, an employee may waive any right, remedy, obligation, claim or action under this Law by entering into a written agreement with their employer to terminate their employment or to resolve a dispute with their employer, provided the employee warrants in the written agreement that they were given an opportunity to receive independent legal advice from a legal practitioner as to the terms and effect of the written agreement;

Recruitment costs

As per the new DIFC Employment Law an employer is not permitted to recoup from an employee any costs or expenses that incurred in the course of recruiting the employee, unless the employee terminates their employment contract for any reason other than termination for cause and their termination date falls within a period of 6 months from the employee’s date of commencement of employment (provided such expenses were directly incurred by the employer in the course of recruiting the Employee, are supported by proof, and such provision was included in the employment contract).

Paternity leave

Provisions targeting employees include the introduction of 5 days paid paternity leave provided he was continuously employed by his employer for at least 12 months.

Discrimination

As per the new law a provision or practice which is discriminatory in relation to the employee’s sex, marital status, race, nationality, age, pregnancy, maternity, religion, or mental or physical disability is prohibited. With respect to age an employer does not discriminate against an employee on grounds of age if the employer can show his treatment of the employee to be a proportionate means of achieving a legitimate aim. The DIFC Courts have the discretion to provide employees who file a claim for discrimination or victimization with a remedy, by making a declaration as to the rights of the parties, award the employee compensation (up to an amount equivalent to the employee’s annual wage), make a recommendation that within a specified period the respondent takes specified steps for the purpose of obviating or reducing the adverse effect on the complainant, or do a combination of the aforementioned. If the employer fails to comply with any recommendations set by the DIFC Court and compensation has been awarded, the DIFC Court has the power to grant compensation to the employee up to 2 times the equivalent of the employee’s annual wage.

Expanding/Establishing an e-commerce business in the EU
Be aware of the ‘virtual’ permanent establishment and other fiscal pitfalls

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E-commerce businesses in the EU are often incorporated in a low tax jurisdiction and distribute products in all EU member states. It does not surprise that such a structure is a thorn in the side of high-tax jurisdictions, in particular when these jurisdictions are the core market for the e-commerce business.

This paper will provide a concise overview whether profits of an e-commerce business can be taxed in a state where the e-commerce business is not incorporated. The general rule is that profits of a business are only subject to tax in the state where it is incorporated. A state can only tax the profits of a non-resident business, if the non-resident business has a so called ‘permanent establishment’ in this specific state. In the case of only selling products online to a specific state, the conditions of a ‘permanent establishment’ are normally not fulfilled so that the state to where the products are sold online has no right to tax the profits of such transactions.

1. Permanent Establishment as per Article 5 OECD Model Tax Convention

The tax treatment of cross-border commerce is the subject of bilateral tax treaties, (Agreements for the Avoidance of Double Taxation, ‘DTAs’) which are negotiated versions of the OECD Model Tax Convention.

According to Article 7 of the OECD Model Tax Convention concerning the taxation of business profits, the source country may tax the profits arising from commercial activities carried out within its borders by a foreign entity through a substantial physical presence in the source country.

However, to justify source taxation, such substantial physical presence must reach the level of a permanent establishment as defined in Article 5 of the OECD Model Tax Convention by satisfying the following three prerequisites, namely

  • the existence of a distinct place, such as premises, or in certain instances, machinery or equipment (‘place-of-business’ test),
  • that this place of business must be ‘fixed’, i.e. it must be established with a certain degree of permanence (‘permanence test’),
  • and that the business must be carried on through this fixed place of business. This means usually by personnel of the foreign entity or by personnel who is dependent on the foreign entity (business-activities test).

If the physical presence does not reach the level required by the OECD Model Tax Convention by satisfying these requirements, the source state is not entitled to charge income tax on the profits arising from the international transaction, rather the residence country of the profit making company will have the right to tax the profits of its resident.

An e-commerce business registered in a low tax jurisdiction can normally avoid a ‘permanent establishment’ as defined in Article 5 OECD Model Tax Convention in other countries where it is selling its products.

1.1 The OECD’s approach on the definition of a ‘virtual’ permanent establishment (PE)

The OECD’s Committee on Fiscal Affairs issued a ‘Clarification on the application of the permanent establishment definition in e-commerce: Changes to the Commentary on the model tax convention on Article 5’. In the Clarification it is distinguished between

  • computer equipment, which may be set up at a location so as to constitute a PE under certain circumstances,
  • and the data and software which is used by, or stored on that equipment.

As per the para 42.2 of the Clarification, a website which is a combination of software and electronic data, does not in itself constitute tangible property. Therefore, it does not have a location that can constitute a place of business as there is no ‘facility such as premises or machinery or equipment’.

On the other hand, the server on which the website is stored and through which it is accessible, is a piece of equipment having a physical location and such location may thus constitute a ‘fixed place of business’ of the company that operates that server.

To sum up, as per the OECD definition, the place where the server is located could constitute a PE of the company. Whereas, the presence or availability of a website in a certain state does not constitute a fixed place of business by itself.

1.2 The Spanish tax authorities’ approach to a ‘virtual’ PE (‘Dell-case’)

In the ‘Dell’ case a Spanish commissionaire subsidiary was categorized by the Spanish tax authorities as PE of its Irish holding company. The Spanish tax authorities concluded and Spanish courts affirmed that sales made by the non-resident entity Dell Ireland through a website which targeted the Spanish market and which was maintained by staff of the Spanish affiliate Dell Spain was sufficient for the conclusion of a PE in Spain. The consequence was that all the sales made by the non-resident Irish company in Spain (minus commissions paid to the Spanish affiliate and other related allocable expenses) were attributed to the Spanish affiliate PE.

2. Introduction of a new digital service tax (‘DST’) in the EU

The EU member states are working on an EU-wide solution to tax profits of e-commerce businesses in each member state. At the same time, some member states are working on a taxation right on a national level, notably France and Spain. In both states, however, only draft laws and proposals are circulating.

On 21 March 2018, the European Commission submitted 2 legislative proposals with the aim that digital business activities are taxed EU-wide.

Proposal 1: Common reform of EU’s existent corporate tax rules for digital activities

This proposal would enable member states to tax profits that are generated in their territory, even if a company does not have a physical presence there. A digital platform shall be deemed to have a taxable ‘digital presence’ or a ‘virtual’ permanent establishment in a member state if it fulfils one of the following criteria:

  • it exceeds a threshold of €7 million in annual revenues in a member state;
  • it has more than 100,000 users in a member state in a taxable year;
  • over 3000 business contracts for digital services are created between the company and business users in a taxable year.

The new rules shall also change how profits are allocated to member states in a way which better reflects how companies can create value online: for example, depending on where the user is based at the time of consumption.

Proposal 2: An interim tax on certain revenue from digital activities

Unlike the common EU reform of the underlying tax rules, the tax would apply to revenues created from certain digital activities which escape the current tax framework entirely.

This system would apply only as an interim measure, until the comprehensive reform has been implemented and has inbuilt mechanisms to alleviate the possibility of double taxation.

A tax of 3% would apply to revenues created from activities where users play a major role in value creation and which are the hardest to capture with current tax rules, such as those revenues:

  • created from selling online advertising space;
  • created from digital intermediary activities which allow users to interact with other users and which can facilitate the sale of goods and services between them;
  • created from the sale of data generated from user-provided information.

Tax revenues would be collected by the member states where the users are located, and would only apply to companies with total annual worldwide revenues of €750 million and EU revenues of €50 million or more.

Prospects

The Ministries of Finance of the EU member states are in the phase of reviewing the proposals and debates are ongoing. Whereas Spain is already in the phase of proposing national legislation for taxation of digital services – modelled on the Proposal 2 of the European Commission – and would most probably welcome EU-wide implementation, Germany for example is generally opposed. Therefore, it remains to be seen whether in Spain and/or EU-wide the DST will be introduced.

 

Disclaimer: Azhari Legal Consultancy’s legal & tax articles are made available to give you general information and a general understanding of the law, not to provide legal advice.

Azhari Legal Consultancy’s legal & tax articles is not legal advice. You should not act upon this information without seeking advice from a lawyer/tax expert licensed in your own state or jurisdiction. The articles should not be used as a substitute for competent legal advice from a licensed professional attorney/tax expert in your state or jurisdiction.

Your use of the articles is at your own risk. The materials presented in articles may not reflect the most current legal developments, verdicts or settlements. These materials may be changed, improved, or updated without notice. Azhari Legal Consultancy is not responsible for any errors or omissions in the content of this site or for damages arising from the use or performance of this site under any circumstances.

Can an employee lose his end-of-service gratuity entitlement?

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Generally speaking, an employee cannot lose his right to end-of-service gratuity. This right is mandatory and cannot be excluded in the employment contract or any Addendum hereto.

The only exception is if the employee breaches his employment contract in a manner that allows the employer to terminate the employment for cause. The reasons for a termination for cause are exhaustively provided in Article 120 of the UAE Labour Law.

According to Article 120 UAE Labour Law an employer can terminate an employment contract without notice only if the employee:

  • assumes a false identity or nationality or if he submits forged documents or certificates;
  • is engaged on probation and is dismissed at the end or during the probation period;
  • commits an error causing substantial material loss to the employer provided that the employer advises the labour department of the incident within 48 hours from having knowledge of the same;
  • disobeys instructions on the safety of work provided that such instructions are displayed in writing at conspicuous places or verbally informed to an illiterate employee;
  • fails to perform his basic duties under the employment contract and persists in violating them despite formal investigation with him in this respect and warning him of dismissal if the same is repeated;
  • divulges any secrets of the establishment where he is employed;
  • is finally convicted by a competent court of crime against honour, honesty or public morals;
  • is found drunk or under the influence of prohibited drugs during working hours;
  • in the course of his work, commits an assault on the employer, the manager or any of his colleagues;
  • is absent without lawful excuse for more than 20 intermittent days or for more than 7 successive days during one year.

It has to be emphasized that the employer has to prove the existence of a cause and fulfillment of all requirements provided in Article 120 UAE Labour Law, e.g. notice to the labour department or warning letter. If the employer fails to prove the cause for the termination, the termination will be considered as a ‘normal’ termination with the consequence that the employer has to pay the end-of-service gratuity and the salary for the termination notice period.

 

Some employers, however, send their employees a termination for cause, just to avoid payment of the end-of-service gratuity and to safe the salary for the termination period. In this case, an employee has the following claims against his employer:

 

  • end-of-service gratuity
  • salary for notice period (minimum 1 month)
  • compensation for arbitrary dismissal (depending on the circumstances)

What double taxation agreements mean for UAE residents

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The Emirates has 123 double tax treaties in force or pending, which benefit expatriates and companies.

For a country with very little taxation, the UAE has a large double tax treaty network in place. With agreements in 90 countries – and 33 pending – the Emirates has more double tax treaties than countries such as Ireland, Luxembourg and Singapore.

Being part of an international tax framework provides important protections and benefits for UAE companies and expatriates. Double taxation avoidance agreements allocate taxing rights and ensure individuals and businesses are only taxed once. They clarify how certain types of income, such as dividends, property income and pensions, should be taxed, and lay out rules on non-discrimination to prevent different treatment based on factors such as nationality or residency.

“The agreements can also provide relief from foreign taxation and certain foreign tax compliance obligations in other countries,” says Jochem Rossel, partner and international tax services leader at PwC Middle East.

Representatives from the UAE’s Ministry of Finance, the Organisation for Economic Co-Operation and Development and the private sector, celebrated 30 years of signing such agreements – the first treaty was with France in 1989 – at an event in Dubai. The UAE has also implemented reforms to combat international tax evasion in recent years.

Part of the attraction of being based in the UAE for expatriates and multinationals is having no income tax or corporate tax to pay, with the exception of certain oil companies and foreign banks. The UAE only introduced a value-added tax in January last year.

“Because the UAE doesn’t have many taxes, the UAE companies have a greater benefit [from double tax agreements],” says Shiraz Khan, who leads Al Tamimi law firm’s tax practice in the region. “It may mean that they’re subject to a lower rate of withholding tax, and that’s purely because of the terms of the treaty.”

In addition to providing such benefits to companies, international tax treaties “allow for the exchange of information and co-operation between countries to address tax evasion, and provide a framework to resolve tax-related issues or discrepancies between the contracting states”, says Mr Rossel.

Here is what these agreements mean for the UAE:

UAE-double-tax-agreements-map

Which countries does the UAE have double tax agreements with?

Of the 90 tax agreements in force, there are 42 in Europe, 23 in Asia, 13 in Africa, four in the Middle East, two in South America, two in Central America, two in Oceania, and one each in North America and the Caribbean. The treaty with Russia is a government investment income tax agreement, which means it only applies to the dividend, interest and capital gains income of governments and their financial or investment institutions.

“We have almost covered more than 120 countries and we are still expanding, signing more agreementswith South American countries and also some additional countries in Africa, as well as working with Nordic countries,” Younis Al Khoori, undersecretary at the UAE’s Ministry of Finance, told The National.

There are 21 pending double tax treaties, 12 signed but not yet ratified and nine under negotiation. The UAE signed an agreement with Saudi Arabia in May last year, the first in the GCC. Countries under negotiation include Australia, Peru and Nepal.

The UAE does not have a treaty with the United States, which imposes taxes on the worldwide earnings of its citizens and green card holders.

“The US in particular has a special treatment for the UAE government and for the double taxation,” Mr Al Khoori said. “We have not negotiated anything, but we have been working closely with the US Treasury on the possibilities to start negotiating.”

South Africans in the UAE who have residency in South Africa may also have to pay foreign income tax soon. Under a double tax agreement with the UAE, a provision in the South African tax legislation provides a pre-emptive exemption for foreign employment income tax, also known as the “expat tax”. That means South African residents who spend more than 183 days in employment outside the country, as well as for a continuous period of longer than 60 days during a 12-month period, are not subject to South African taxation. However, an amendment that will go into effect in March next year, will limit that exemption to income of up to 1 million rand (Dh252,950).

What do tax agreements mean for UAE expatriates and companies?

For expatriates, the double taxation agreements come into play when they have a second residency outside the UAE, says Ghassan Azhari, managing partner at Azhari Legal Consultancy in Dubai.

“For example, between Austria and the UAE, there is a provision that your UAE income is exempted from the Austrian income tax,” says Mr Azhari, an expert in international tax law. “The German double taxation agreement says any income tax you pay in the UAE will be deducted from German income tax, so you will pay full income tax in Germany.”

[Source: www.thenational.ae]

 

European Union added UAE to the blacklist of alleged tax havens. What are the consequences for investors?

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From a tax perspective, the last week was quite controversial for the UAE.

On March 11, the Ministry of Finance celebrated the 30th anniversary of the first double taxation agreement to protect and encourage investment. The very next day, on March 12, the European Union finance ministers agreed to add the UAE to a blacklist of alleged tax havens (‘EU Black List’).

 

Consequences for Investors of EU blacklisting

EU member countries can and are to some extent obligated to apply defensive measures against black listed countries.

These measures may include in the tax area administrative measures like:

  • reinforcing transaction monitoring,
  • increasing audit risks for tax payers benefiting from the respective regimes, and
  • increasing audit risks for tax payers using structures or arrangements involving these jurisdictions.

EU countries are obligated to apply at least one of the mentioned measures.

The fact, however, that the UAE has been added to the EU Black List has no impact on existing double taxation agreements or on any national tax law.

In the light of the above, very little has changed. Businesses domiciled in tax havens have always been in the focus of tax audits. Nevertheless, the blacklisting will certainly increase the intensity of tax audits for European entrepreneurs doing business in the UAE.

Consequently, European investors should be even more cautious. Whether and to what extent the corporate structure of a business or the private environment of an Investor contains risks, only a law expert can decide. However, European investors should – inter alia – make sure that:

  • his business in the UAE has a certain substance;
  • the management of his business is residing in the UAE;
  • in case of a mainland company the agreements with the local sponsor (holding 51% of the shares) do not constitute the beneficial ownership of the foreign investor, as this may trigger tax liability in the foreign investor’s home jurisdiction. In most cases foreign investors use ‘simple’ trustee agreements with the local sponsor which constitute the beneficial ownership of the trustor, i.e. the foreign investor;
  • in case a European citizen has a residency in the UAE, he should avoid any arrangements that might indicate another residency in the EU.

The above recommendations are not new. But after the UAE has been added to the EU Black List, it is even more important to comply with the double taxation agreements and the applicable national tax laws of the EU member states.

 

Outlook

The EU Black List should be updated at least once per year. Taking into account that the inclusion of the UAE was a particularly thorny issue, with Italy and Estonia pushing until the last minute to get the UAE off the list, and the announcements of the UAE that it will give its best endeavors to comply with international tax standards, it is to hope that the UAE will be removed from the EU blacklist very soon.

New DIFC Employment Law Expected to Introduce Minimum Limit of 50% of Employee’s Gross Salary as Basis for End of Service Gratuity Calculation

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The new law is expected to be enacted around Q1 of 2019 and to introduce significant changes to the current DIFC Employment Law (DIFC Law No. 4/2005, as amended by DIFC Law No. 3/2012) as per the consultation papers published in early 2018. For instance, it is expected that the current Article regulating the end of service gratuity will be amended by limiting the minimum percentage at 50% of what an employee’s basic salary may be as a proportion of their gross salary for purposes of calculating the gratuity payment.

middlesex-university-dubai-dr-ghassan

Dr. Ghassan gave students of the Institute for Entrepreneurship & Business Excellency an overview of the fiscal pitfalls of e-commerce businesses operating on an international level.

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Middlesex University, Dubai. Dr. Ghassan gave students of Institute for Entrepreneurship & Business Excellency an overview of the fiscal pitfalls of e-commerce businesses operating on an international level.

Certificate-of-Appreciation-2

 

A closer look: Non-competition provisions in the UAE

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In the UAE post-termination restrictions are a common practice and imposed by the employer to prevent that the employee joins a competitor after terminating the employment. Such covenants are lawful, but only to the extent which is necessary for protection of the legitimate interests of the employer.

In order to be considered valid by the UAE courts, the post-termination restriction must be limited in terms of duration, place, and with regard to the business field.

Requirements

Regarding the limit to the length of time, 6 months are generally accepted as being reasonable. However, a restriction of up to 12 months might be acceptable by the courts if there are unique reasons in relation to the employee and his position that require a wider restriction. Secondly, regarding the geographical restriction, the restriction to the Emirate in which the employee has been working is generally accepted as being reasonable (for instance Dubai), unless there are specific reasons that might justify a wider restriction. Lastly, the employee’s business field and position has to be determined, whereby the activity sought to be restricted should be well defined and specific.

As a general observation, the degree of probability that non-competition clauses are considered valid rises the higher the employee’s position has been, considering that senior employees are more likely to have access to business secrets.

In case of an invalid non-competition provision, the courts strike them out in their entirety if considered unreasonable in time, place and/or business sought to be restricted, rather to “blue pencil” such agreements.

Enforceability

In case the non-compete clause is ignored by the employee, the employer may not stop the employee or physically prevent the employee via court order from joining a competitor, since injunctions to stop working with a competitor are not available through the UAE courts (different in the jurisdictions of DIFC and ADGM where interim reliefs are available).

However, in the event of breach of a non-compete clause, the employer may commence a civil claim for damages. The statute of limitations for labour cases is one year from the date of alleged breach of a non-compete clause. The employer would have to prove any damages and substantiate the actual amount of loss incurred as a result of the employee’s breach of non-compete clause.

In case a liquidated damage clause has been included in the agreement the employer who is seeking compensation under the liquidated damage clause would need to prove the fact that loss was incurred, without substantiating the actual amount of loss. It would be up to the employee to challenge the amount agreed upon in the clause. The court then may vary the parties’ agreement and accordingly set aside entirely the liquidated damages in case of the employer suffering no loss or award lesser damages reflecting the actual loss.

Sept 2018- Enforcement of Arbitration Awards in the UAE

Enforcement of Arbitration Awards in the UAE under the new Arbitration Law – As simple as it gets?

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An arbitration case comes to the end with the issuance of an arbitration award to each party. If the losing party does not honour the arbitral award, the enforcement institutions of the state in which the assets of the losing party are located, need to be called.

What the winning party needs to do

In the UAE, the enforcement of an arbitral award requires the submission of request regarding issuance of both – the confirmation of the award and the order to enforce the award (the ‘Enforcement Order’). With the new Arbitration Law, the enforcement proceedings now commence directly before the UAE federal or local Court of Appeal and not before the Courts of First Instance as earlier. With by-passing of the Court of First Instance, the time and cost consuming procedures to challenge the Enforcement Order have been reduced. This is a very positive development.

Said Request for enforcement must be accompanied by the original award or a certified true copy thereof, a copy of the arbitration agreement, a certified Arabic translation of the arbitral award, and a copy of the transcript of filing the judgment with the court.

Within 60 days, the court shall confirm and enforce the arbitral award unless, it finds that one or several reasons for annulment of the arbitral award, as mentioned in Art. 53 of the new Arbitration Law, exist.

The Grievance to challenge the Enforcement Order or the rejection thereof must be filed within 30 days following the date of being notified thereof.

It is important to mention that, besides submitting the request regarding issuance of Enforcement Order, the winning party may and shall seek a freezing order from the civil court to preserve the losing party’s assets until the arbitral award can be enforced.

The losing party’s options

Within 30 days following the notification of the arbitral award, the losing party can file a so called ‘Action for Annulment’ and prove the existence of one or several reasons for annulment as mentioned in Art. 53 of the new Arbitration Law, like the absence of an arbitration agreement, lack of capacity of one of the parties, no proper notice of the appointment of an arbitrator, and/or the violation of the litigation principles, etc.

The judgment rendered by the court upon the Action for Annulment is not subject to appeals. However, the court from which the annulment of arbitral award is sought may – upon request – suspend the annulment proceedings for a period not exceeding 60 days and give the Arbitral Tribunal the opportunity to take any action that may eliminate the causes of annulment without affecting the content of the arbitral award.

Conclusion

We think that the new Arbitration Law achieves a very welcomed shortening of the enforcement procedure. Apart from this, it remains to be seen how the new Arbitration Law will be implemented by concerned enforcement bodies.