Risk minimisation is the ultimate goal of insurance. Its purpose is to buy peace of mind and to soften the financial blow should the worst case scenario occur. Insurance is a major part of everyday life, and an even more integral part of business. Insuring your business is ensuring the protection of your biggest asset; your livelihood and future. Insurance law is therefore equally as important, covering all regulatory aspects of insurance, covering the regulation of insurance businesses, the content of insurance policies, especially with regard to consumer policies, and the regulation of the handling of claims.

Talking to Lawyer Monthly on the complexities of the insurance and reinsurance sector is Nicolò Juvara, Partner at the global law firm Norton Rose Fulbright, and head of the Italian practice and the corporate and M&A team there. Nicolò describes the extent of change the Italian insurance sector has undergone in recent years, the industries that are strong in the Italian insurance market, and talks about the potential to be found in upcoming EU directives in the insurance sector.

The insurance sector in Italy has undergone significant changes over the past two decades. I received my first significant mandate from an insurance client back in 1998, when I advised an Italian insurance company on the listing of its shares on the Italian stock exchange. In the context of that matter, I had to quickly become familiar with the peculiarities of the insurance industry. At that time, Italy was considered an under-insured country. It had a large number of small insurers and the market was dominated by motor insurance, for which tariffs were regulated.

Motor insurance is still at the core of the Italian insurance industry, but the market has been liberalised and, as a consequence, has become more profitable. The arrival of aggregators increased competition and enlarged the offer of different and innovative types of insurance products and coverage options. The industry has also consolidated; many small companies and operators have integrated into larger groups or simply disappeared.

Moreover, intermediaries, while still representing the dominant distribution channel, have become more specialized and, unlike in the past, face strong competition from alternative channels, like banks and financial service companies, as well as the Internet.

Looking ahead, insurance companies, intermediaries, and other players in the insurance market in Italy know that in order to survive the next decade, they will have to be more efficient and creative in meeting the changing needs of clients. At the top of the agenda of any insurer operating in Italy today, as in many other countries in Europe and around the world, is regulation, including first and foremost, the new Solvency II rules, and rules regarding consumer protection.

New rules and regulations inevitably have an impact on business processes, from product governance and design to distribution and claims management. The ability of a company to swiftly make the necessary changes in processes to comply with new rules and regulations, is key to getting new products to the market, and, in the long run, to the productivity and profitability of the insurers. On the other hand, lack of strategy and a slow, reactive, approach to new rules and regulations are two of the most common mistakes that insurers make.

In light of certain common trends arising from the EU legislation, new rules and regulations can and must be anticipated; they should be regarded as an opportunity to adopt a more modern approach towards the market. Italian and foreign insurers alike cannot afford to cling to antiquated business models and traditional products. Innovation and flexibility will be key characteristics of the business models of the next generation of successful leaders in the Italian insurance market.

Besides Solvency II, Italy’s insurance sector regulator, IVASS, has proposed new legislation which will further simplify the contractual documentation of insurance policies and communications to insured parties. This is designed to help insurers be more efficient and technologically advanced, to help them reduce administrative costs and, most importantly, reach the millenniums, the younger part of the potential client base in Italy, without compromising on consumer protection.

As a member of a highly respected law firm with a strong international insurance practice, we are often called upon to assist in consultation procedures relating to insurance legislation. In my view, one of our greatest contributions to these proceedings, as lawyers specialising in the industry sector with years of experience across jurisdictions, is to be able to explain and demonstrate how, sometimes, an overly formalistic approach to rules and regulations can damage not only the business of the insurers, but also the best interest of the consumers.

Touching on the topic of international trade this month is Dr. Bijan Kasraie, a founding member of Kasraie & Fodor, LLC. He talks to Lawyer Monthly about the biggest milestones in international trade over the past 30 years, in particular the UNDROIT initiative and the establishment of the WTO.

In the over 30 years you have been in business and practicing law, how have you seen the international trade scene evolve?

There are several major changes that have been helping international trade to take place more smoothly:

● The UNDROIT initiative is probably one the most important developments in international trade. It started with efforts to unify trade law and create unified international commercial laws and customs. It pivots around the right of people to enter into contract. It further established rules that parties could refer to in their contract. I can spend hours elaborating on the importance and the impact of UNIDROIT, but not today.

● Unifying the units and terms: For years the US and effectively the rest of the world were using different units of measurements, different business and financial terminologies, and different forms of international trade payments. Such differences frequently have been the cause of many business conflicts. However, during the past decades, efforts have been made to eliminate these differences and create unified terminologies and standards.

● Expansion of ADR (Alternative dispute resolutions) facilities. Litigation has and still takes a great deal of time and money, and the results are frequently hard to enforce. On the other hand, ADR centers were few and not convenient. Therefore, the expansion of ADR centers makes them more readily available to just about everyone.

● The World Trade Organization (WTO) has been probably the most important development to improve and facilitate the international trade. It took eight years to finally get established in January, 1995. As of 2016, 164 nations have been admitted to it. It deals with rules of trade between the member nations and is a forum for trade negotiation and dispute resolution. In short, it ensures the free flow of trade between nations. Unfortunately, I cannot spend enough time to further elaborate the role and importance of WTO.

How would you describe the current international trade landscape and what are the hottest talking points today?

Anti-dumping and politically related tariffs are hot talking points. It is very difficult for importers/exporters to know in advance of their shipment, and what costs they may incur at the disembarkation. Frequently, customs arbitrarily and capriciously impose charges that are nearly impossible to fight. Presently many nations use the flow of commerce to impose pressure on other nations in light of political conflicts.

As the founding member of Kasraie & Fodor, LLC, how do you push your teams to further explore the legal landscape of international trade and cover all details in their work?

I encourage the drafting of contracts that would be fair to both sides, which consequently leads to fewer conflicts. And I advise them to choose practical forums and finally make sure their contracts are enforceable.

As head counsel in numerous crossborder transactions, how do you push for the most commercially rewarding deals in your corporate work and what are the challenges you commonly encounter in relation to crossjurisdiction deals?

One of the common challenges is in educating our clients to be aware of the nuances of international trade in their negotiation with counterparts. Helping our clients to understand other cultures’ business acumen is also often a challenge.

You have also been the Financial and Economic Advisor to City Governments in the People's Republic of China since 1998; how does this help you push the boundaries of your work in international trade law?

It helps me further understand Chinese contract laws, business transactions, mode of payment, and how their legal system work, which is critical for anyone who wants to do business with or in China.

How does trading with developed, developing and under-developed countries differ?

In my book Understanding International Commercial Contracts (published by Thomson Reuters), I have elaborated in detail about the differences between doing business with different countries in different stages of development.

In short, it is critical for the international traders to know the economic development of the country they intend to do business with. Such knowledge helps one to know what type of commercial contract, insurance requirement, and banking facilities needed, to mention a few.

On the matter of company restructuring, from the latest regulation updates, to the biggest challneges this legal segment faces, our next thought leader details his thought leadership in the Cayman Islands‘ restructuring arena.

What are the biggest difficulties faced today surrounding company restructuring and how do you help resolve these on a daily basis?

There are a myriad of difficulties to deal with in any restructuring, but the key issues are always devising a solution which (i) should ensure the company’s medium to long term survival, (ii) is realistically capable of being adequately funded, (iii) will have the requisite support of the key stakeholders, and (iv) will be effective in compromising creditors’ claims and protecting the company’s assets in all relevant jurisdictions. When a Cayman company is involved it is typically as the holding company of an onshore / international group, and the Cayman legal issues which we assist with will be critical in ensuring a successful global restructuring.

What are the typical errors you see committed by companies involved in restructuring?

The most common error is leaving it too late to retain legal and financial advisers to work with the management on a restructuring solution, and failing to engage with the key creditors sufficiently far in advance of their debt maturing. This can often lead to increased restructuring costs, dealing with issues which might otherwise have been avoided, and more fundamentally it can jeopardize the company’s survival prospects.

Have there been any legal developments pertaining to restructuring in the Cayman Islands recently?

The most significant development in the last few years has been the Grand Court’s decision in Re China Shanshui Cement Limited (unreported, Mangatal J, 25 November 2015). China Cement concerned the question of whether and in what circumstances directors of Cayman Islands’ companies are authorised to seek to commence court supervised restructuring proceedings (which provide the protection of a moratorium on unsecured creditor action) by presenting a winding-up petition and applying for the appointment of provisional liquidators.

Prior to China Cement, the position pursuant to Re China Milk Products Limited [2011 (2) CILR 61] had been that if the company was insolvent (on a cash flow basis), the directors had the requisite authority to commence the process without needing either an express power in the articles of association or authorisation by a shareholders’ resolution.

In China Cement, Mangatal J concluded that China Milk had been wrongly decided. The learned Judge dismissed the insolvent company’s application for the appointment of restructuring provisional liquidators on the grounds that the directors had not been authorised to make the application.

Although there are conflicting decisions on the issue, applying the court’s reasoning in China Cement the position is now as follows. Irrespective of whether a Cayman company is solvent or insolvent, its directors are only able to instigate a court supervised restructuring process if they are authorised to do so by a shareholders’ resolution or (if the company was incorporated after the 1st March 2009) by an express power in the company’s articles.

In practice this issue has typically not been addressed expressly in the articles of Cayman companies, and so the ability to obtain a shareholders’ resolution is likely to be critical. This can create timing difficulties for insolvent companies which are in or approaching a financial crisis, particularly when (as is frequently the case) the Cayman company’s shares are publicly listed on a foreign exchange.

More fundamentally, it can give undue leverage to shareholders who may no longer have an economic interest in the insolvent company. It can also leave the directors (whose duty at that stage is to have regard to the interests of the company’s creditors) in a very difficult position where they are unable to instigate a court supervised restructuring process which they regard as being in the interests of the creditors as a whole.

As a thought leader, how have you worked towards adapting and moulding the restructuring law sphere in the Cayman Islands over the past decade?

Most recently I have been closely involved in working with several other leading practitioners on statutory reform to address the problems arising from the China Cement decision. It is hoped that a statutory solution addressing those issues and incorporating various other enhancements to the Cayman Islands restructuring regime will be ready to be considered by the legislature by the end of 2016.

For what is arguably the financial capital of the world, Switzerland is renowned for its jurisdiction’s financial benefits, but this doesn’t mean businesses encounter less risk. Here, Daniel Hayek, Partner at Prager Dreifuss, gives Lawyer Monthly an update on the Swiss insolvency & restructuring landscape, revealing the most recent matters the firm has been involved with, progress in legislation surrounding foreign bankruptcy decrees, and what in his opinion is still to be introduced to Swiss legislation in this regard.

Has the insolvency and restructuring sector evolved significantly since we last spoke three years back?

There have been various developments in the insolvency & restructuring sector over the past years.

On the one hand, several amendments to the Federal Statute on Debt Enforcement and Bankruptcy entered into force on the 1st January 2014. They were enacted to encourage restructuring rather than liquidation of a company in distress by facilitating the application and approval of a moratorium on debt restructuring. Other incentives for restructuring include changes to employment law in relation to the takeover of businesses and more debtor-friendly rules on dealing with long-term contracts allowing a company in distress to free itself from long-term commitments that obstruct its financial recovery.

On the other hand, new case law of the Federal Supreme Court has clarified the situation with regard to the recognition of foreign bankruptcy decrees. Under Swiss law, liquidators of foreign estates must apply for recognition of the foreign bankruptcy decree and the opening of ancillary bankruptcy proceedings in Switzerland before claims can be filed or any action taken in Switzerland. Once the application has been approved, the local bankruptcy office can file claims on behalf of the ancillary bankruptcy estate.

One of the requirements for recognition is that the foreign jurisdiction grants reciprocity. Previously, it had been unclear whether the Netherlands granted reciprocity. A judgment rendered by the Federal Supreme Court within the Petroplus liquidation has now laid down what qualifies as reciprocity, thus clarifying the legal situation and enabling recognition of bankruptcy decrees from the Netherlands.

What are the most recent legal matters you have been involved with and what have been the professional challenges therein?

Recently we have been involved in the insolvencies of Petroplus, Lehman Brothers and Swissair.

From an economic perspective, the current negative interest rate environment poses a major challenge in such large insolvencies. Since distributions on claims tend to be made rather towards the end than the beginning of a liquidation, creditors are naturally interested in the swift conclusion of insolvency proceedings. Currently, assets collected by the liquidator during the course of the insolvency proceedings and deposited with a bank are charged with negative interest. Liquidators are obliged to deposit collected assets with a designated bank and therefore cannot circumvent negative interest rates. This situation puts lawyers and liquidators under even more pressure to accelerate insolvency proceedings. One of the Petroplus liquidators challenged the negative interest rates in court, but the Federal Supreme Court recently ruled that there is no statutory obligation to apply a positive interest rate on mandatory deposit accounts. Thus, an insolvency lawyer needs to be very Daniel Hayek, Partner at Prager Dreifuss pro-active and anticipate creditors’ expectations in order to be able to act in his client’s best interest.

From a legal perspective a major challenge in a recent insolvency has been settling a key legal issue not yet decided by case law. For example, the question of subordination of intercompany loan agreements in favour of the bondholders in the Petroplus liquidation where we negotiated a settlement agreement involving not only the insolvent Swiss entity, but also the holding company and various foreign subsidiaries. As representatives of the Indenture Trustee and the Security Agent of bondholders we ensured that claims of our clients in the amount of CHF 1.9 billion, as well as claims of group companies amounting to several hundred million francs, were accepted. Successful conclusion of the settlement required a team effort and close cooperation between the liquidators and lawyers involved. Acceptance of the deal also depended heavily on clients’ and bondholders’ confidence in the negotiated solution which they approved after execution.

Are there any current changes to Swiss legislation in the insolvency sphere?

The Swiss Federal Council is planning to amend the provisions of the Federal Act on Private Law in order to facilitate the recognition of foreign bankruptcy decrees. It has been recognised that the current procedure to have foreign bankruptcy decrees recognised and ancillary bankruptcy proceedings opened in Switzerland is burdensome and costly. Examples like the recent ruling of the Federal Supreme Court on the recognition of Dutch bankruptcy decrees are a testimony to the obstacles foreign liquidators currently face. The planned amendments will have a great impact on any future crossborder insolvencies involving corporate groups and we are monitoring these developments closely.

Is there any further legislation you believe necessary to be introduced in Switzerland at this point in time?

In the aftermath of the financial crisis, insolvency litigation in Switzerland has become more finance based. While there exist specialised commercial courts to deal with finance based litigation, almost all insolvency related litigation is dealt with by the court for debt enforcement and insolvency actions on a mandatory basis. Where insolvency litigation is heavily finance based, for example because the underlying contracts are based on ISDA Master Agreements, the debt enforcement and insolvency court may not dispose of the same level of expertise as the commercial court.

Further, in certain parts of Switzerland the debt enforcement and insolvency court will be composed of a single judge. In complex cross-border insolvencies where the legal issues relate to foreign law and require expert opinions the court might be stretched for resources. As a consequence, cases take longer to be adjudicated than they should, a very frustrating situation for the client and all parties involved in the insolvency proceedings. In such cases it would be beneficial if the parties were able to choose the court where they want to bring their action rather than ascribing mandatory jurisdiction to the debt enforcement and insolvency court. This would ensure that the competent court disposes of the appropriate level of expertise and personal resources to deal with the case in an efficient and timely manner.

As a thought leader, what key considerations would you advise potential future insolvency & restructuring lawyers to always raise with their clients?

Where lawyers advise the board of a company it is important to advise on statutory obligations when the company is in distress. Otherwise, board members can be held personally liable if the company becomes insolvent at a later stage. Here, events of default under a revolving credit facility in particular, can prove to be fatal for the company and its directors. Where the company’s liabilities exceed the assets and lenders demand payment, or refuse to agree on an enforcement standstill period, the board has to notify the debt enforcement and insolvency court within four to six weeks. If the board fails to do so and the company later becomes insolvent, the directors may be liable towards the company, its shareholders and the company’s creditors.

In complex cross-border insolvency cases lawyers might also be advising foreign liquidators of affiliated or subsidiary companies. In such cases insolvency lawyers need to advise the foreign liquidator on the particularities of the lawyers’ domestic insolvency regime. For example, many foreign liquidators are not aware that they need to apply for recognition of the foreign bankruptcy decree and for the opening of ancillary bankruptcy proceedings in Switzerland.

Finally, where a lawyer is representing a creditor vis-à-vis an insolvent company, he needs to ensure that the client’s claim is properly substantiated within the required timeframe, as otherwise the claim will be rejected. Especially where the underlying legal issues are governed by foreign law, the lawyer needs to ensure that his client obtains legal advice on the respective foreign law as soon as possible.

Even in the highlands, business finds a way of falling into crisis. To this end, Alan Meek works hard with his clients in finding the fastest solutions, the most efficient methods and the best results. Below Alan tells Lawyer Monthly about the crucial and significant differences between the UK and Scotland’s restructuring law, the impact of social and political scenarios on businesses in Scotland, and about the solution he provides his clients with on a daily basis.

As a specialist advising on all aspects of corporate insolvency and restructuring – which sectors would you say are currently experiencing distress/insolvency and restructuring more than others in Scotland?

Currently we are seeing considerable strain on businesses associated with the North Sea and renewables but other sectors such as care homes and property are also stressed. As with other parts of the UK the causes are a mix of global, European and local political and social issues. It would be fair to say that the Scottish economy is dependent upon the public sector to a greater extent than is the case for many regions south of the border and that brings its own challenges at all times but particularly in times of austerity.

What would you say are the most common restructuring and insolvency mechanisms for distressed corporations in Scotland. Is Scotland different in this regard from the rest of the UK?

There are a considerable number Alan Meek, Partner at MacRoberts LLP of differences between Scottish insolvency law and practice and the law and practice in the rest of the UK. The basic regimes and processes are the same – administration, liquidation, receiverships and CVAs but there are significant differences. We don’t have LPA receivers for example and our fixed and floating securities are different. In Scotland a landlord has a form of security for unpaid rent that ranks ahead of the floating charge. Our court system is completely different of course and it’s worth knowing that Scottish limited partnerships have their own legal personality so they can, themselves, go into formal insolvency. When they do, they go into sequestration (Scottish bankruptcy). We don’t have the Official Receiver and we have our own set of Insolvency Rules. We also seem to make more appointments of provisional liquidators north of the border. In Scotland we have historically made proportionately less use of CVAs for restructuring than in England and Wales. There are a number of reasons for this – practitioner unfamiliarity and perceived cost compared to other processes being the two main ones. The risk of running a CVA without an administration wrapper is also a large disincentive; having said that, CVA usage has increased recently. Administration (with a prepack or other business sale) is by far the most common process used in business restructuring in Scotland.

So, in summary, corporate recovery is practised a bit differently here in Scotland although the broad outlines would be recognisable to other UK practitioners.

Politically, liquidation, sequestration, and receivership are devolved issues. Administration and CVAs are not. That is confusing and unwieldy and hardly conducive to flexible and responsive policy-making and social engineering.

What can make an insolvency turn contentious? Why do businesses need to consider seeking specialist advice at the earliest sign of difficulty?

Insolvencies/restructurings turn contentious principally when the competing claims and requirements of stakeholders cannot be accommodated. That may be lenders vs management or differing groups of landlords being treated differently. The trick (if there is a trick) is ensuring that as much fairness as possible can be meted out to the different interests (within the strictures of the Insolvency Act of course) at the same time as delivering an effectively restructured business.

At what point can a reorganisation plan be proposed it?

Really, the earlier the better. The further down the decline curve a business goes, the fewer are options it has. If the plan involves some pain for all, and needs to be consensual to any degree, it is better to ensure that the business still has breathing space and options on the other side if Plan A cannot be satisfactorily implemented. It is important to identify stakeholders and involve them as early as possible.

How challenging is assisting with the restructuring of a corporation?

It is challenging. But I think the professionals involved sometimes forget that it is actually the management team who bear the brunt of what has to happen. They are the ones who have to implement a turnaround plan within the business (an insolvency process is really only the framework mechanism that allows the opportunity for a business to recover). The workforce has to live with the emotional and commercial upheaval and uncertainty associated with business distress. It is necessary to appreciate that there are individuals involved and not just corporate entities. There can be a bit of a social work or counsellor role in some cases. For the advisors, it is challenging – but it can be very rewarding too.

What can you bring to the table to assist when your clients face distress or insolvency?

Sometimes insolvency just cannot be avoided. Sometimes economic factors conspire against a business to such an extent that it renders their business model unsustainable. Catastrophic falls in property prices or changes to Government funding arrangements would be examples. If that is the case, the management are obliged to ensure that the impact on creditors is minimised as far as possible. That will often require professional advice to affect the best outcome and, if insolvency can be avoided, professional advice will maximise the chances of that occurring.

Is there anything else you would like to add?

We are obviously living through an unprecedented time of change in the political landscape. Brexit, a change of Prime Minister and ongoing considerations of Scottish independence mean that there is great uncertainty for businesses now and in the foreseeable future. UK and European banks appear to be under stress to an extent not seen since just before the 2008 crash. Inevitably this will put additional strain on our clients’ businesses. Some will find ways to weather these storms, others will not. As advisors, our role will be to help those businesses deal with the challenges they will face. It won’t be easy – but then again, if it were easy, no one would pay us to do it. We are certainly living in challenging times and it is often said that what businesses and investors crave most is stability. The uncertainty attaching to Brexit and Scotland’s place in the UK means that investment decisions are being deferred or indeed cancelled. If a business has a model that is largely dependent upon EU sales, what should it be doing now to prepare for the next few years given that no one can tell it whether or not it will be able to export in the manner that it has done hitherto? As the curse goes, “may you always live in interesting times.” We are certainly living in interesting times but I suspect many businesses yearn for the dull days to return.

According to Deloitte’s 2016 banking industry outlook, several aspects of the global banking sector have been experiencing, and are set to experience, serious existential threats. As change is spurred across the globe, uncertainty surrounding the future of the banking sector is rife, and questions are arising about the next decade of banking.

Here to give Lawyer Monthly her perspective on banking & finance landscape in Morocco, is Nadia Kettani of the Kettani Law Firm. Nadia discusses the daily operations of the firm, the latest legislative changes in the Moroccan banking sector, and talks about the challenged involved in fiancning projects in the North African region.

Kettani Law Firm (KLF) is a major Moroccan business law firm founded in 1971 by Professor Azzedine Kettani who was admitted to practice as a lawyer in 1968 and is approved by the High Court of Justice of the Kingdom of Morocco. He was joined in 1992 – after internships in France and the United States – by Nadia Kettani, who is the Head of the International Consulting Department while supervising some areas of the Litigation Department; and Rita Kettani in 1993, who is the Head of the Commercial Department, the Litigation Department and the Labour Law Department. The firm acts for banks and other financial institutions, international businesses, major public and private companies and government departments.

Who are the clients you regularly deal with on banking matters and what kind of challenges do they bring to the firm?

KLF assists both multinational and large local companies whether they are banks of private entities. With respect to international clients, one of the main challenges is that the clients are familiar mostly with common law and do not necessarily fully understand the environment of civil/continental law. Therefore, international clients wish to apply foreign law, which is not always accepted or understood in Morocco, although both private entities and public ones are more and more open to the idea. In addition, multinationals systematically want to apply international arbitration as a dispute resolution clause, which is not always accepted, although more accepted in Morocco.

Over the past 30 years, what would you say have been the most impacting banking directives/regulations to change the Moroccan financial landscape?

Over the past 30 years, all banking laws and regulations in Morocco have been updated and upgraded. The banking Law itself has been amended in order to become investor friendly and open to new types of products, such as the Islamic finance for instance. With respect to capital markets, laws and directives have been upgraded to International standards and supported by a complete reform of the General Instruction of the ‘Office des Changes’ (IGODC), which also became investor friendly. Multinationals can buy local debt as much as local clients can buy international debt, both without the prior authorization of the exchange control office. Consequently, Moroccan banks and multinational companies are able to offer investment in a standardized and efficient legal context. The recognition by Morocco of tools such as ISDA’s master agreement templates allows Moroccan actors to use international legal instruments, and international players to offer those a safe legal environment.

Please tell me about the regulatory developments that have affected financial services in Morocco most recently.

Several laws have affected financial services in the past years. Most recently Moroccan authorities passed a Law relating to debt securitisation, a Law relating to the real estate collective investment scheme (OPCI) (passed but not yet applicable), and Islamic financial products.

What trends have you noticed with consultancy clients over the last year?

What challenges have they raised and how have you navigated these? Over the last year, consultancy clients have continued to approach Morocco, as it is the safest country in the region, but act carefully. Indeed, most of them investigate prior to their investment and eventually invest in stages. The challenges are the same as the ones raised on a regular basis, i.e. applicability of foreign law as governing law; enforcement and implementation of contracts as well as the enforcement of arbitration awards or foreign judgments.

As a thought leader, how are you and your firm helping towards the successful expansion of project financing in Morocco?

Kettani Law Firm has participated in most project finance deals in Morocco, whether in the energy sector or others. It has developed a legal know-how as it has had the opportunity to act for sponsors, lenders or EPC contractors.

All legal aspects are therefore covered and mastered by KLF, with the most salient ones being in energy projects; for instance the quiet enjoyment, the access right or the surface right concept. Other more specific aspects usually relate to the enforcement by a foreign investor of the limitation of liability and the liquidated damage clause or the nature of security package that can benefit to a foreign player.

How do you believe Morocco’s infrastructure development, and other projects, could make the nation more appealing to FDI?

Morocco cumulates a finetuned legal system (notably in the field of renewable energy and public-private partnership with recent laws that have been passed) and a dynamic governmental strategy. To cite a few examples, the Moroccan government adopted the Green Plan strategy (‘Maroc Vert’) relating to the agriculture sector for the years to come. The Green Morocco Plan’s strategy concerns a sector which contributes 19% of the GNP, with 15% from agriculture and 4% from agro-industries.

The Government also adopted a solar plan (‘Plan Solaire’), launched in 2009. This project is part of Morocco’s energy strategy, which focuses on the development of renewable energy and sustainable development. These long-term governmental strategies aim at encouraging investments in expanding sectors.

The modern corporate world is pitted with potential legal traps. It takes a skilled and experienced legal professional to guide companies through the challenges involved, challenges which vary from country to country.

This month Lawyer Monthly looks at the issues surrounding the corporate world in North America by speaking to Jose Ramon Gonzalez, Chief Legal Officer and Corporate Secretary for QBE North America.

Jose talks about the career path that led him to boast the title of thought leader in the corporate world, and excel in his role at QBE. He also discusses the rewards and challenges surrounding the corporate affairs he and his legal team are involved in daily.

What has been your overall career trajectory and what is it in particular that keeps you going?

My career trajectory has been very interesting and the evolving nature of my role is what keeps me going. The life as an attorney in today’s corporate legal climate is challenging and in constant change. To succeed you need to be dynamic and on top of your game. The challenge is what energises and enables me to pursue my work with enthusiasm and vigour every day.

I began practicing law in 1995 as a corporate associate at the law firm of Weil, Gotshal and Manges working in the firm’s London and New York offices. After a number of years of rigorous training in highly complex global transactions, I joined the in-house team at American International Group, Inc. (AIG). Representing one of the world’s largest financial services organisations in acquisitions, joint ventures and investments for their insurance and asset management businesses was an incredible opportunity. It allowed me to apply all of the “hard” legal skills I learned at Weil in a business context, and it provided the opportunity for me to spend a considerable amount of time in Asia and Latin America, where I was able to hone my skills as a global lawyer.

All of this experience was put to practice in my next role. Torus was launched in 2008 with 20 people in Bermuda and London, and grew to over 600 employees in 13 offices worldwide. When I joined as Global General Counsel in 2011, Torus was in the mist of its expansion and needed senior leaders who could serve more than one role. Given my background, I immediately jumped into the transactional work, playing a key role in negotiating the acquisition of a Lloyd’s managing agency and Torus’ network of European offices, as well as trying to start an insurance operation in Brazil.

From Torus, I joined QBE, which presented a particularly interesting challenge. At the time, QBE was undergoing a massive transformation involving the entire company. This literally required a re-engineering of the legal function to assure we were supporting the transformation, as well as providing ongoing legal services to the company.

What corporate law matters do you deal with on a regular basis at QBE?

At QBE, over the last two years, I have focussed primarily on corporate governance and mergers and acquisitions.

Assuring that appropriate corporate governance is maintained in our North American companies continues to be one of my most important functions. As an area of increasing importance over the last decade, boards are looking to their legal team to provide them with the tools they require to effectively discharge their duties and responsibilities. As Corporate Secretary to our US companies, we regularly review our governance environment and make sure we are applying best practices. We also keep abreast of developments outside the US to give us possible indications of future developments. In the UK for instance, we have recently followed implementation of the Senior Insurance Managers Regime and possible implementation of Solvency II remuneration requirements.

M&A has been another area of focus. When I joined QBE, as part of our transformation QBE was disposing of various divisions that did not fit within our current strategy. These deals bring me back to my origins. I truly enjoy the art of the deal and negotiating the best outcome for my client. I immediately became involved in these transactions. After many months of hard work, I am happy to the say that the legal team played a successful part in the implementation of that part of our strategy.

What kind of challenges did these matters entail professionally?

The matters presented many diverse challenges. As the transformation at QBE North America proceeded, it was imperative to keep our North American Board of Directors up to date on how our initiatives were developing in order to assure they were able to exercise their oversight function. Our non-executive directors in particular relied on me to serve as a vital link between themselves and our senior executive team.

M&A work similarly presents a huge number of challenges. The logistical challenges of getting ready for sale, preparing and negotiating deal terms and executing the transaction are always great. Time was of the essence. Given the transformational process occurring at QBE North America, we needed to complete these deals quickly, efficiently and accurately so that we could begin to focus on growing our business. Our committed legal team was instrumental in achieving this corporate goal.

You work with a large team of lawyers; how do you keep all eyes on the ball from day to day?

As Chief Legal Officer, by definition my job is to keep my eye on many balls. I must identify emerging issues, prioritise rigorously, bring all relevant company stakeholders to the table, and make sure the CEO and other senior leaders are kept up to date on important matters. This is no easy task, but this is what makes my role so interesting and why I’m so fully engaged every day.

Strong relationships with your team, along with superior support staff, is also essential to staying on top of it all. At QBE, we divide our legal department into five areas: Corporate, Litigation, Regulatory, Compliance, and Business Unit Support. Despite our size, we have a strong culture of communication in our legal team. I spend the day connecting with members of our legal team, both formally and informally. Building strong relationships facilitates communication, and gives everyone in the department the confidence to raise issues, no matter how difficult. In short, it encourages a culture of collaboration at all levels, which enables me to effectively oversee a large global legal team.

What would you say are the difficulties you encounter with your team, and how do you apply thought leadership in navigating these successfully?

Living through a transformational process as thorough as the one recently completed at QBE North America was not easy. Rapid change is unsettling for people, but ongoing, open communications and team engagement is key to effectively leading through the changes. Things are much better now that we are on the other side of our transformation. However, there are always challenges on the horizon, as we now focus on consolidating our legal team, engaging our business partners, and embedding the legal function into our business processes. Keeping the legal team focused on our goal of creating a legal, regulatory and compliance function that is aligned to our corporate business goals has been the most difficult aspect of my role.

What legislative change has most impacted your work in the last decade?

For organisations operating in the US, the Dodd Frank act signed by President Obama in the wake of the 2008 financial crisis continues to strongly impact our industry. Among other things, the law established the Federal Insurance Office, adding a level of Federal oversight to an area that has been regulated historically at the state level. In addition, some of our larger competitors have been classified as ‘systemically important financial institutions’ (SIFIs) by the Federal Stability Oversight Council, an arm of the US Treasury established to monitor excessive risk in the US financial system. While not something that affects us directly, we need to keep an eye on these developments in order to understand how that may impact QBE in the future.

As a corporate attorney in a highly regulated financial services company, could you provide LM with some insight on how you ensure the satisfaction of your regulators?

When overseeing regulatory and compliance matters for a company in the highly regulated financial services industry, it is imperative that you maintain excellent relations with your regulatory stakeholders. This assures that your regulators understand your ability, as well as your commitment, to uphold the highest standards in corporate governance and regulatory compliance.

One of my biggest challenges is to make sure that my team and I are reconciling applicable corporate governance requirements in the face of increasing regulatory oversight. This involves ongoing communication with regulators, our board and other internal stakeholders.

Having studied all over Europe, and taken in the width and depth of what commercial law can offer, this thought leader has authored over 50 scientific publications and written five books!

With experience in the Supreme Court, what would you say is the most common commercial matter disputed in Italy and why do you think this is?

In my experience I can say that the most common commercial matter disputed in Italy is the responsibility of directors and it may concern budget appeals, actions of responsibility of the directors or shareholders and board resolutions of appeals, proceedings under Article 2409 Italian Civil Code for administrative irregularities, malpractice liability actions for management, and coordination pursuant to article 2497 of Italian Civil Code.

What are the biggest benefits of resolving commercial disputes via arbitration and how popular is this DR method in Italy?

In my opinion the biggest benefits of arbitration solution are the following:

• quick decision-making;

• content costs;

• technical competence and independence of referees.

In Italy you can make use of arbitration for the resolution of disputes if it has previously been a written clause in the contract, which delegates resolution to the dispute. In the absence of the arbitration clause, you may have recourse to arbitration through the conclusion of a written agreement - the act of compromise. The important thing is that the award has the value of a judgment given by the judicial, and constitutes an enforceable title.

In dealing with international cases, what challenges do crossjurisdiction proceedings entail? In each commercial relation I always suggest to give importance in negotiating the “jurisdiction clause” and the “applicable law clause” in order to avoid problems in case of dispute. In addition it is important to verify the possibility of recognition of judgments in the countries of both contracting. In my opinion the difficulty lies in the interpretation of the rule and in the different system of standards between countries.

As a thought leader in Italian commercial law segment, what improvements or reforms would you like to see benefit the sector?

• Simplification and cost reduction for the establishment of companies;

• More detailed regulations for the right of shareholders to information with respect to the activity carried out by the directors of a limited liability company;

• Tax breaks and reforms for the protection of intangible assets.

You are also a professor teaching on EU & Labour law; as a thought leader how does this help you expand your boundaries and goals in the legal profession?

Teaching Urban Planning Law and European Union Law at the University of Catania is a huge help because it allows me to put into practice the matter studied. Learning about the new reforms, the analysis made by the doctrine, and the recent developments in case law, allows me to achieve better results in less time.

Founder and Chairman of the Qatar based Al-Sulaiti Law Firm, Mubarak Al-Sulaiti here reveals the passion and grit behind a fairly new law firm, intent on ‘Bridging Legal Traditions’. He tells Lawyer Monthly about the growth of the firm through its commercial law practice, and through its thought leadership in supporting the Qatari National Vision 2030.

‘Bridging Legal Traditions’

Al Sulaiti law firm is a full service law firm, providing cutting edge legal services and solutions to local, National and International clients. Al Sulaiti law firm’s main specialty is Middle East and North African laws; it is operating through its qualified lawyers from different legal systems to ensure that it provides clients with the most sufficient legal service not only in the State of Qatar but also across the MENA region. We have professional bonds with law firms in Italy, France, USA, Kuwait, Lebanon, Egypt, South Africa and India our global outreach enables us to provide the finest legal services to our clients.

We specialize in sectors that include Civil & Criminal Litigation, Alternative Dispute Resolution, Corporate/ Commercial Law, Mergers and Acquisitions, Private Equity, Real Estate and Construction, Sports Law, Environmental Law, International Trade Law, Intellectual Property, Financial Fraud and Taxation.

At Al Sulaiti Law firm we believe in the power of teamwork, of being ‘One firm’, collegiality, communication and solidarity. Being focused on having an amicable relationship with our clients is an integral part of our performance; this permits us to build a strong bond with the client enabling us to perform at better and higher standards. Flexibility and creativity are essential characteristics and having the desire and drive to embrace new experiences and challenges that is why it’s a fundamental principle to require everyone in our team to put the interests of our clients and the Firm as a priority.

We are always committed to delivering the best quality of service to all of our respected clients. We have a strict policy on following all the laws and regulations of the State of Qatar. This includes clients, associates and employees. We believe in hard work and unlimited efforts.

We are always developing new strategies to better our practice and our performances. The level of ethical behavior required of a lawyer is something that sets them apart from the general public. A few examples of our Ethical standards are:

• Avoiding biased and superciliousness toward, and treat fairly with respect, all witnesses, lawyers, court employees, and other persons involved in the legal process.

• Always maintain high standards of the professional conduct

• Obedience to law exemplifies our respect for the law

• To assure the maintenance of high morals and educational standards of the legal profession

• The attorney client relationship is personal and unique and should not be established as a result of pressures and deceptions.

What have been the most recent developments businesses should be aware of in Qatar?

In actual fact, talking about the matters concerning the latest business developments in Qatar requires reference to the importance and the implementation of the Qatar National Vision 2030. The vision-as it is known-is based on economic, social, environmental and humanitarian development. The vision is the economic hub which is characterized as the spark that will ignite the rest of the other cores, so the promotion of this vision will promote investment and support the economic sector, which will lead to many investment opportunities for major companies and the global economic entities in their expansion of innovative or existing activities in Qatar.

The Qatar National Vision aims to promote effective economic development; one of the ways the Ministry of Economy and Commerce has contributed to this was by scrapping the compulsory 200,000QAR [minimum capital] in credit business owners [limited liability companies] needed to register a company. This change has opened up channels for new opportunities to benefit entrepreneurs and investors in the State of Qatar. The Ministries are working exceptionally hard to improve secure and promote a modern state with modern legislations and essential developments to promote economic development and give rise to new business opportunities, which benefits the country’s economy.

The publication of the International Institute for Management Development report (IMD), explains the province of the State of Qatar on its global competitiveness, where Qatar has achieved 13th place in the ranking of 61 countries. It should be noted here that the evaluation (IMD) is based on a set of statistical data and indicators, and the views of corporate executives and businessmen of the respondents of the report on the survey.

The introduction and the implementation of the Wage Protection System [WPS] as per Law 14 of 2004 [amendment of article 66] is also one of the important regulatory changes made to ensure that equal opportunities are granted and that every employee and employer secures his/her rights in the work place; salary payments. The wage protection system ensures that all employees receive their salaries on time in a valid Qatari bank account and guarantees the employer and his business security from being blocked. This change maintains the promotion of effective change and support of the national vision, securing the country from unequal and unfair activities is a must in order to promote successful economic growth. The government is penalizing all the corporations that do not follow the new changes, any company that is found ignoring the rules of the WPS entails itself to being penalized by the Ministry of Economy and Commerce, the Company Registration will be blocked by the ministry meaning that the company cannot generate any business until it follows the laws and regulations of the state of Qatar. The law will come in to force from the 14th of December 2016. Much is being done in Qatar to improve business and achieve the National visions and goals set for 2030.

How is Al Sulaiti law Firm contributing towards the success of the Qatari National Vision 2030?

Being one of the leading Qatari Law firms it is our duty to support the nation’s vision by implementing it in to our corporate responsibility policy objectives. We take our legal duties towards clients and our community very seriously; we are more than just lawyers, our legal responsibilities are no doubt very important to us but part of this responsibility encourages us to take our corporate responsibility [CR] policy and objectives seriously. Forming and maintaining effective change is a core part of our CR, we concentrate on education, the environment and our community, which includes the importance of Pro Bono services. Putting an emphasis on the importance of corporate responsibilities and achieving as much as we can by working towards the success of the national vision 2030 is part of our contribution. We are strengthening our CR by performing ‘in depth’, starting from our offices and branching out. We are forming analytical criticisms to improve our strategies ‘in depth’, to improve the work place, the environment, our community, education and humanitarian developments.

How has the firm’s engagement in commercial law helped it achieve its status since its inception in 2002?

There is no doubt that the idea of legal specialization in itself has had an enchanted effect in the excellence of our practice and put it in the major ranks of legal institutions currently in place. We are a full serviced law firm, specializing in several branches of the law including commercial law. When Mr. Mubarak Al Sulaiti first opened the practice he set a ten year plan for the firm. One of the plans was to be one of the renowned firms in the state of Qatar, starting off mainly a commercial firm and then successfully branching the services and sectors within the practice. Al Sulaiti law firm has marked its print in the legal field in Qatar and our excellent unlimited commercial and corporate services and team have enabled us to deal with the most reputable local organizations, international institutions and governmental corporations.

Our work, mission and legal ethics have enabled us to deliver the best services starting from a limited number of clients in the commercial field, and now being one of the leading commercial firms in Qatar. We continuously try to improve our practice and our methods at delivering the best legal services customized differently for every client depending on their needs. We have worked hard to establish and maintain a good reputation for Al Sulaiti law firm, bringing the practice more clients through referrals due to our client satisfaction rates. We strive to deliver the best services, not just promising to deliver but we set our clients expectations and do our ultimate best to exceed them. With one of the largest teams of lawyers in private practice we are pride ourselves in expanding delivering the highest level of legal advice to current and potential clients.

The policies of internal management in our organization met all the declared targets last year, which yielded results that exceeded expectations desired for us and for our clients. We are also following our ‘in depth’ movement to internally discuss developments and annual plans by the end of each judicial year with the participation of our teams and a detailed client survey to assure higher satisfaction and successful changes and developments within the practice.

You were involved in the digitalization of Qatari and Egyptian laws and judgments for students to reference; what impact has this had?

Bridging Legal Traditions; as a legal institution that provides mechanisms for practical legal profession, our organizations first experience is unique in terms of the legal use of the means of information technology. This program was created to combine laws from the MENA region in order to promote student awareness to the differences in reform and legal strategies and regulations used. Being familiar with laws and regulations of other states in the region is very important as part of legal education, we do not want our future lawyers to only be limited to the laws of the state of Qatar but for them to be well aware and familiar with laws and regulations of our neighboring countries in the MENA region. It has had a great impact here in Qatar and we plan to broaden this idea in the near future.

The launch of the program demanded that those who will use it be familiar with it, that is why we first managed the training of members of the firm so that they are able to guide others, especially students, on how to benefit from the advantages offered by this program for their legal education. It is worth mentioning that our firm currently holds training for a number of young lawyers on the program encompassing all of these laws, as well as training on legal excellence and creativity, through rebounds directly from the most efficient advisors. All the legal institutions need to take care of and pay detailed attention to our youth, specifically those in the legal field, because young people are the backbone of the future, and the issue of interest by educating them and training them is one of the first national tasks to be worked on and improved in the coming period. In conclusion we believe that the digitalization of these laws has been successful and in the legal education field. We are striving to do our very best to promote the digitalization of the laws for all of the neighboring countries in the MENA region.

As a thought leader in Qatari commercial law, what improvements or reforms would you like to see benefit the sector?

It is acknowledged that the commercial sector’s interest lies with the recovery and accuracy of the level of contractual disputes, which requires us beginning to realize the nature of this sector. We see that the most beneficial factor for this sector would be to inform and educate companies and investment entities about the legal implications of the contracts entered into, so as far as what needs to be amended, detailed knowledge and accuracy when drafting contracts or entering in to new commercial contract. Entities must be aware of the recent regulatory changes and they must try to incorporate arbitration in to their business contracts.

Arbitration will increase the effectiveness and frequency of prompt settlement of disputes, through these pillars there will be a noticeable change in the commercial sector, including eventually expanding the investment opportunities of the State by encouraging businesses to develop and protect themselves from within. Incorporating new regulations and changes in to their contracts as well as using arbitration clauses, the corporation will be successfully managing to reduce the percentage of disputes in litigation.

How are you working towards implementing the further integration of arbitration in commercial law proceedings in Qatar?

The proliferation of arbitration in our society depends largely on educating lawyers on all the advantages provided recourse to arbitration, which, among those advantages ; secrecy and speed of adjudicating disputes are exceeding expectations, in addition to the excellence of arbitratorswith expertise and skills that will enable them to adjudicate the dispute with all ease. We try to incorporate litigation as the last resort in our firm, subject to the client’s wishes of course and depending on the type and contents within the contracts involved in the disputes; however, we are trying to use forms of arbitration and settlements to resolve disputes that may be resolved by incorporating these methods.

While recognizing that there are many seminars and courses on arbitration held recently regarding the deployment of the arbitration culture, Qatar Chamber is actually hosting the Second world conference on International Arbitration being held in the state of Qatar on the 18th and 19th of October 2016. In comparison to prior periods, we can say that a greater effort is being executed in the remarkable development of the field of arbitration, we must still acknowledge the wide spread of commercial disputes that are increasing as a result of large entry of economic institutions in the thousands of investment projects taking place in an ever evolving landscape.

We would like to invite all of our colleagues in the field of law in Qatar and the MENA region to assure the incorporation of arbitration clauses in contracts and advise their clients that there are other methods to achieve the results that are desired. In the event of a conflict the clients or the other party may resort to arbitration based on the contractual agreement between them instead of heading towards the process of litigation. This may be the most practical attempt to speed up the process and help businesses avoid the troubles and costs involved in litigation and court procedures.

When drafting or negotiating contracts, there are numerous considerations and key factors businesses and consumers should take into account. These range from conducting thorough due diligence to ensuring the contract includes a dispute resolution mechanism, in case the contract is breached or difficulties arise.

On this matter, Lawyer Monthly hears from our next thought leader regarding the complexity of contract litigation, drafting, and the pitfalls therein, under the jurisdiction of Zimbabwean law.

As an expert in litigation – what would you say are the unique regulatory challenges involved in litigation proceedings in Zimbabwe, given the complex nature of this area of law?

Under Zimbabwean law, parties are generally free to contract in the various guises of the concept of freedom of contract, denoting freedom to choose terms of the contract and freedom of choice of contracting partner. However, this freedom is not absolute, and inroads on contractual autonomy are found from a regulatory standpoint, mainly statutory in nature, and also from the common law. These at times pose serious challenges especially to external contracting parties who may not be familiar with the various laws and customs which regulate Zimbabwean contracts and ultimately affect the process of contractual litigation in our jurisdiction.

While parties may freely choose with whom they contract, this freedom is curtailed under the Indigenisation and Economic Empowerment Act which reserves certain percentages of shareholding in any venture for locals. It is consequently vital for foreigners intending to invest in Zimbabwe to obtain appropriate advice regarding their investment and the allowable thresholds under the indigenisation law. This is especially so given that the law itself appears to be applied on a selective basis, with evidence from recent trends suggesting the relaxed government stance on the otherwise strict requirements of the law. A foreign investor must be alert as to the extent of control held in an enterprise as this may be problematic in the event of litigation related to the contract or investment.

There is also regulation as to terms of the contract where one or more of the parties to a contract are foreign. The Reserve Bank of Zimbabwe possesses regulatory powers in this regard in ensuring that every investment into the country is approved under exchange control regulations. Further to this, under the Zimbabwe Investment Authority Act, an organ called the Zimbabwe Investment Authority is mandated to approve ventures in which foreign nationals or corporates are involved.

When drafting a contract, are there common themes that must be considered, regardless of the type of contract?

When drafting contracts, regardless of the type or subject matter thereof, there are general themes which must be addressed to ensure compliance with the law and general protection of clients’ interests. The first is to ensure that the parties to the contract are competent under both common law (in respect of age or mental capacity, among others) and statute, which mainly relates to the indigenisation component discussed above and any specific qualifications which may be required by a party.

The terms of a contract must also be lawful and this includes the subject matter and nature of performance of the contract. This also speaks to the enforceability of the contract which must be clear and beyond speculation. It is important to consider statutory or self-imposed formalities when drafting contracts. In our jurisdiction, there is generally no requirement to have a written memorandum as a prerequisite for contractual validity. However, there are certain types of contract which are invalid if not made in writing; for instance a contract for the instalment sale of land.

It is important to consider the definition and consequences of breach, and under our law, certain types of contract require statutory notice periods for rectification of breach before one may avail themselves to the ordinary remedies attendant to breach. One must also consider an appropriate dispute resolution mechanism to suite the type of contract, the appropriate jurisdiction and applicable law which will vary depending on the requirements of each agreement.

Given the important role contracts play in ensuring businesses can properly function – when drafting a contract, which processes do you undertake to close any potential loopholes?

When drafting contracts we generally advise that a due diligence process is conducted to ensure that the client is protected as best as possible in the intended venture. Where this is not possible, or is not desired by the parties, it is very important to ensure that all stages of negotiations are recorded and documented in case of disputes in future. We also consider together with the above factors, the general application of boilerplate clauses, which come as standard for our contracts. The process of closing potential conflict points is one that requires -the utmost diligence and teamwork to ensure that every aspect of the draft adequately covers the client