Non Netting Agreement

A bottleneck, compensation or contractual subordination is applicable against the parties to the agreement in which it is entered into, against any surety or person who provides security to a party in this agreement and against any creditor of a party that provides security. In addition, anyone who deals with the affairs of a party or an insolvent person must make this provision effective. Transactions and agreements under the Compensation Act Before the introduction of the Compensation Act, the use of derivative contracts by financial institutions was commonplace. However, the final analysis of the United Arab Emirates, which was the basis of these agreements, contained a number of qualifications, which meant that the United Arab Emirates could not be considered a jurisdiction in which the applicability of compensation was certain. There was even a case of basic precision that found derivative contracts to be unenforceable. The compensation law is a positive step towards clarifying and certainty in local and international markets that the fundamental aspects of clearing and derivative contracts are recognized in the United Arab Emirates. This is another positive and dynamic step in the rapid implementation of the UAE`s legal system to promote greater financial activity in the country and strengthen the country`s position as the world`s leading commercial and financial centre. Under the Compensation Act, the concept of compensation includes: (i) termination, liquidation and/or acceleration of payment, obligation to deliver, authorization or obligation to receive or demand payments or deliveries under a qualified financial contract (as explained below) entered into under a compensation contract (as explained below) or for which a compensation contract is applicable; (ii) the calculation of the net balance (based on an index of a closing or termination value or other relevant value) for these terminated, liquidated and/or accelerated liabilities or rights; and (iii) the conversion of this estimated value into a single currency. Within the United Arab Emirates, compensation laws have been adopted and are in effect in the Dubai International Financial Centre (IFLD) and Abu Dhabi Global Market (ADGM) free zones.