Commission turns up the heat on cartels

On 11 November 2009, the European Commission imposed fines totalling over €173m on companies involved in a cartel in the market for heat stabilisers (Commission decision of 11 November 2009 in case 38.589). This brings the total value of fines imposed by the Commission in 2009 for cartel activity to over €1.6bn. The Commission found that 24 companies from ten corporate groups had been involved in price fixing, allocation of markets and customers, and the exchange of commercially sensitive information. Continue reading “Commission turns up the heat on cartels”

REACH and CLP: chemicals regulation issues for 2010

The REACH (Registration, Evaluation, authorisation and restriction of chemical substances) Chemicals Regulation 1907/2006 (REACH) entered into force across the EU on 1 June 2007. UK enforcement of REACH is led by the Health and Safety Executive (HSE). The main purpose of REACH is to ensure a high level of protection of human health and the environment. It places duties on manufacturers, importers and downstream users of substances, preparations or mixtures and articles, when they are placed on the market. Continue reading “REACH and CLP: chemicals regulation issues for 2010”

Development of PPP legislation in CEE and SEE countries

The current financial crisis has undoubtedly dampened the initial enthusiasm over public-private partnerships (PPP). However, ongoing developments in relevant legislative frameworks, particularly those in central and eastern European (CEE) and south-east European (SEE) countries, suggest that a belief in PPP projects as an alternative to traditional public contracts still exists.

PPP PROJECTS AND THE IMPACTOF THE FINANCIAL CRISIS

PPP projects are joint initiatives between the public and private sectors in which the state chooses a private partner for the implementation of certain projects (usually relating to infrastructure). In most cases, the private partner will have to finance, design, construct and operate the infrastructure for a certain period (usually 20-30 years). Whereas some countries have separate laws for the implementation of PPP projects, the rules for selecting private partners are mainly regulated by concessions or public procurement law. PPP projects have a significant advantage for the state over traditional public works contracts in that the main risks involved with building and operating major infrastructure projects are shifted to a private partner. Most importantly, by placing the onus for funding the project on a private partner, the state reduces financing costs. However, private companies are finding it more and more difficult to raise money during the current financial crisis. Due to an increase in interest margins, project financing costs have risen to an extent that public financing is in many cases the cheaper alternative. Additionally, banks are currently reluctant to provide financing for the formerly standard 20-30 year period and prefer to offer shorter-term loans.

RECENT AMENDMENTS TO PPP AND CONCESSIONS LEGISLATION

It appears that the difficulties caused by the financial crisis are widely regarded as being only temporary and PPP projects are still considered to be the concept of the future. CEE and SEE countries, outside the EU in particular, continue to develop their legal frameworks for the implementation of PPP projects. Aside from financing issues, many smaller non-EU countries lack the requisite expertise to realise major infrastructure projects and therefore require the experience of a private partner such as an international construction company.

Albania

Recent amendments to Albanian concessions law, which came into force on 21 November 2009, have established a new concessions agency in the country. The agency will be responsible for ensuring proper adherence to concessions procedures in Albania and is able to impose fines on non-compliant contracting authorities. The agency will also deal with bidders’ complaints against contracting authorities’ decisions in concessions procedures. In this context, the newly introduced requirement that bidders pay an upfront deposit of 10% of bid security, which is only returned if the complaint is successful, has been criticised as an obstacle to legal protection.

Bosnia and Herzegovina

The legal framework of Bosnia and Herzegovina is highly fragmented and different rules apply on federal and state levels. Republika Srpska approved a new PPP law in May 2009 that differentiates between concessions and contracts financed by public funds (which are effectively traditional public contracts rather than PPP). Detailed regulations on the selection of private partners will be outlined in secondary legislation.

Croatia

Croatia’s legal framework for PPP projects underwent a major revision in 2008/09 with the implementation of new public procurement, concessions and PPP laws. The process of selecting a private partner has been brought further in line with EC legislation and is more stringently regulated. Croatia’s PPP legislation requires that relevant projects are approved by a newly established PPP agency. This agency will assess the project proposal with a view to harmonising PPP goals with the development strategy of affected industries, and will analyse the project value, structure and risk balance. The PPP agency will also approve relevant tender documents and concessions contracts.

Montenegro

Montenegro’s new concessions law came into force on 12 February 2009 and allows for the selection of private partners for large infrastructure projects without conducting a public tender where the project is of strategic importance to the country. Like Montenegro, many non-EU countries in the region have created legislation that allows for concessions and PPP projects to be awarded without the prior conduct of a public tender. Such initiatives often take the form of ‘unsolicited proposals’ in which a bidder is awarded a contract on the basis of its own proposal. Such procedures directly contradict EC laws requiring an open, transparent and competitive process, and countries seeking accession to the EU will have to adjust their legal framework in this respect.

Middle East Construction in 2009: an annus horribilis

Based in Dubai, Habib Al Mulla & Company has witnessed first hand the worst effects of the 2009 financial crisis. The Dubai construction market has suffered more than most and the number of construction cases through the Dubai International Arbitration Centre (DIAC) has tripled over the course of 2009. The launch of the DIFC LCIA Arbitration Centre (DIFC LCIA) could not have come at a better time although, inevitably, the take up of cases has been slow at the new centre. Continue reading “Middle East Construction in 2009: an annus horribilis”

Sale and leaseback: is it a giveaway?

Sales and leasebacks of real estate remain an often used mechanism to raise capital, improve operational cash flow, and, all being well, returns on investment. They range from a simply structured transaction involving a straight sale and leaseback, often through auctions, to the most complex structures involving large multimillion-pound portfolios with complex arrangements for the substitution and re-purchase of the property by the original seller company, backed up by bond issues. Continue reading “Sale and leaseback: is it a giveaway?”

Supervision and enforcement in the Netherlands

The Netherlands has many different supervisory authorities, including the General Inspection Service, the Health and Safety Inspectorate, the Netherlands Authority for the Financial Markets, the Netherlands Consumer Authority, De Nederlandsche Bank (the Dutch central bank), the Health Care Inspectorate, the Netherlands Competition Authority, and the Inspection Department of the Ministry of Housing, Spatial Planning and the Environment. Continue reading “Supervision and enforcement in the Netherlands”

Divorce and the media: the courts, the pay-outs and the speculation

The rising divorce rate and some well-publicised settlements running into tens of millions of pounds have focused attention on a growing issue in divorce cases: just how far can spouses go to obtain information about their partner’s financial affairs?

Uncertainty about legal outcomes adds to the temptation for well-heeled spouses to disregard their obligation to provide full and frank disclosure in divorce and ancillary proceedings. Meanwhile, the ease of copying electronic data from a partner’s laptop or accessing online bank accounts is prompting some spouses to actively hunt evidence that their estranged partner has the wherewithal to fund a sizeable settlement. Continue reading “Divorce and the media: the courts, the pay-outs and the speculation”

New opportunities under Ontario’s Green Energy Act 2009

The Ontario government recently announced several new regulations and programs to give effect to some of the major components of the Green Energy and Green Economy Act 2009 (the 2009 Act). The 2009 Act is designed to provide a legal framework for the establishment of an attractive investment climate for green power developers, generate certainty in the market, and make Ontario a leader in renewable energy and energy conservation in North America. As of 24 September 2009, the following key features of the 2009 Act have been implemented:

  • Canada’s first feed-in electricity tariff program began accepting applications as of 1 October 2009;
  • the new Renewable Energy Approval (REA) required for renewable energy projects is now available;
  • the province has announced several incentive programs to help with the costs relating to developing a renewable energy project in Ontario;
  • the Renewable Energy Facilitation Office (REFO) has been established; and
  • a C$2.3bn program for major upgrades to Ontario’s electricity transmission grid is underway.

Continue reading “New opportunities under Ontario’s Green Energy Act 2009”

Dispute resolution clauses in IT contracts

Given the relatively frequent occurrence of disputes over contracts for the supply of software and IT services, dispute resolution provisions are an important feature. In the recent case of Ericsson AB v Eads Defence and Security Systems Ltd [2009], the High Court had an opportunity to consider such provisions and their relationship with rights of termination and remedies under the contract.

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High Court finds that ‘subject to contract’ banner does not necessarily prevent parties being bound by agreement

IN JIREHOUSE CAPITAL & ORS v BELLER & anor [2009] the parties were conducting settlement negotiations and although they had not expressly lifted the ‘subject to contract’ banner (in fact both sides used it fastidiously through their various exchanges) the High Court found that, on the facts, the parties’ negotiations could only be understood to have been conducted on that basis (ie not intending that any formalisation was required for the parties to be bound). As such, the banner having been lifted, the parties were bound by the terms agreed despite the absence of any more formal contractual agreement.

Continue reading “High Court finds that ‘subject to contract’ banner does not necessarily prevent parties being bound by agreement”