The Gazette 1976

GAZETTE

March 1976

Ltd. v. British Soda Co. — (1972) Ch.D., the defen- dants, though not acting maliciously, were held liable, when they liquified the solid support beneath plaintiff's land, and then drew out the resulting liquid so as to cause subsidence. The great advantage of this new edition is that each chapter is written separately by an expert, mostly by one of the six editors. This ensures that each separate topic, such as Negligence or Defamation, is treated expertly. A tort, which has relatively recently sprung into prominence, namely procuring a breach of con- tract, which leads to intimidation, is fully treated, as is that of negligence relating to foreseeability. There are even chapters at the end relating to franchises, copyright and patents. The authority of Clerk & Lindsell on any aspect of the law of Torts, already assured, has been heightened by the excellence of this edition. The publishers are to be congratulated on the lay-out, and, in the circumstances now prevailing, the high price is inevitable. An Introduction to Business Law in the Middle East. Edited by Brian Russell, Oyez Publishing, 1975; v d + l 18, £5.00. This little collection of essays with a grand title and a price to match it (the latter being a reflection of the times, as indeed the title also is) comprises brief dis- cussions of areas of law and practice ranging from Islamic law through tax considerations and the legal environment for negotiatng contracts, to the role of governments in such matters. Each essay in a tran- script of a lecture, followed by questions raised when the original lecture was given, and the answers. The introductory essay (by David Suratgar, a direc- tor of Morgan Grenfell Ltd.) is devoted to the nature of Islamic law and the impact of the civil law on it. It could well serve as an introduction to a larger work on the subject. The theme running through the whole collection of lectures is pointed by the first question which follows. In the questioner's experience, Arab governments "do breach their contracts". The question was, "Is there an Islamic religious excuse for this?" The answer boils down to, "there is a considerable body of Islamic law on the subject of the binding nature of contracts". The next essay deals with practical considerations of doing business in Arab countries, by Dr. Jamal Nasir, a former Minister of Justice of Jordan. The keynote of his lecture is set by his statement that they "are going to be dealing with people who are more or less their equals", and that Arab businessmen a f e "shrewd, know exactly what they want and pre- cisely how much they would like to get out of the party who is going to do business with them!" Later, discussing finance, Dr. Nasir repeats, "the Arabs are shrewd". Commercial representatives are exhorted to "avoid at all times the temptation to meddle or take an active interest in political discussion". Indeed, in a later lecture we learn that persons in charge of foreign investment projects in Saudi Arabia are actually prohibited from concerning themselves in any way with the religious or political affairs of that country. The reader is told that "in almost all cases, the law of the country concerned would require that any contract with a foreign company should be governed by local law. This is a question of prestige". While

Dr. Nasir favours the inclusion of arbitration clauses, the previous writer, when referring to the Saudi Arabia/Aramco arbitral award (which was against Saudi Arabia), said that there "has been an increas- ing reluctance on the part of the Saudi Arabians to submit disputes to international arbitration again". Dr. Nasir makes the important statement that a con- tract should be prepared ah initio both in English and an agreed Arab text. The latter governs the contract. Touching on the subject of agency, it appears that the law in some Arab states protects agents to a much greater extent than in Western systems; so that the contract of agency can be determined, usually, only at considerable loss to the principal. There is little elaboration of this topic. The following lecture, on tax, mentions a most interesting and advanced aspect in Egypt — the requirement to distribute 25% of profits to employees. The contributor, Mr. Julian Lee, draws the important distinction between doing business in a Middle Eastern country (which gives rise to local taxation) and doing business with such a country (which does not). Take for example an EEEC company contracting to deliver and instal equipment in Jordan. The fact that it is installing the equipment (doing business in the country) renders the company liable to Jordanian tax. There are numerous incentives for labour-intensive, export-orientated business in the tax area. However, Mr. Lee (an accountant who specialises in inter- national taxation) concludes on the dispiriting note that, on the one hand few of the tax laws are really inviolable, and on the other "no foreigner can be really aware of the detailed provisions in these countries". A peculiarity of Saudi company law is worth men- tioning. Article 127 of its Companies Act states that the proportion of net profit to be distributed is to be stated in the Articles. Therefore, a company in Saudi Arabia does not declare a dividend, but decides whether to distribute or not. The only way of varying the amount of distribution is by amending the Articles. This is an esoteric development which must give rise to problems in practice, but it could also be envisaged as being a protection against oppression of a minority, and against defrauding creditors. A novel role suggested by Nigel Spinks, solicitor and consultant in international trade, is that of the foreign lawyer being a commercial public relations figure. He ought to be responsible for the "cosmetic" preparation of plans and proposals to licensing authorities and planning boards of government authorities. This will not come as a surprise to prac- titioners who have dealt with semi-state agencies or departments of the EEC. Mr. Samil El-Falahi's contibution (on the legal environment of the Middle East) commences by stating that attention must be paid to the "historical development of the area as a whole". Mr. El-Falahi was asked for information concerning the "Ar ab boy- cott rule". The answer given is simply that lists of companies boycotted are available. No mention is made anywhere of the regulation requiring a baptismal certificate as a prerequise for a non-Mohammedan to obtain a visa to enter almost all the Arab countries. Were it not for the total omission of Israel one could say that this little book is a first step towards gaining an understanding of the legal environment in general in the Middle East. G. M. Golding. 45