UAE: Dubai: DIFC publishes draft Companies Law 2008

The Dubai International Financial Centre has published for consultation a draft of the Companies Law 2008, which will replace the Companies Law 2006. 

The content of the Companies Law 2008 is not that dissimilar from the UK Companies Act (2006) although it is much shorter. Both contain provisions concerning directors' duties and relief for shareholders in respect of unfairly prejudicial conduct. With regard to the former, the draft Companies Law 2008 states in Article 53 that:

A Director or other officer of a Company, in exercising his powers and discharging his duties, shall: 

(a) act honestly, in good faith and lawfully, with a view to the best interests of the Company; and
(b) exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances". 

There is, however, no indication of how "best interests of the Company" is to be interpreted. Moreover, part (b) might be better written to indicate whether it sets only an objective standard. Where a director's skills exceed those of the reasonable person in comparable circumstances, and he fails to exercise those skills, will there be a breach of Article 53?

Note: for further information about the DIFC, which has the authority to legislate in civil and commercial law matters, see here.