the jordanian initiative jordan securities commission elias tarawneh attorney at law
TRANSCRIPT
The Jordanian Initiative The Jordanian Initiative
Jordan Securities CommissionJordan Securities Commission
Elias TarawnehElias TarawnehAttorney at LawAttorney at Law
ADR practices in the Jordanian ADR practices in the Jordanian Capital MarketCapital Market
Amman Stock Exchange "Dispute Amman Stock Exchange "Dispute Resolution" InstructionsResolution" Instructions
Jordan Securities commission Jordan Securities commission
"complaints" procedure"complaints" procedure
Why ADR is an essential needWhy ADR is an essential need The increase in the number of complicated The increase in the number of complicated
disputes between stakeholders in the capital disputes between stakeholders in the capital market, which triggers the inadequacy of the market, which triggers the inadequacy of the current procedures to cater for such complicated current procedures to cater for such complicated disputes disputes
The inability of the ordinary court system The inability of the ordinary court system "litigation" to properly understand and deal with "litigation" to properly understand and deal with the securities disputes in the event of the securities disputes in the event of complicated cases. complicated cases.
The advantages of ADR.The advantages of ADR.
Disputes in the Capital MarketDisputes in the Capital Market
Disputes Disputes between stakeholders in listed between stakeholders in listed companies, which includes dispute companies, which includes dispute involving the listed companies them self involving the listed companies them self as a party to the dispute.as a party to the dispute.
Disputes Disputes between stakeholders in between stakeholders in financial services companies, which financial services companies, which includes dispute involving the financial includes dispute involving the financial services companies them self as a party services companies them self as a party to the dispute.to the dispute.
Disputes between stakeholders in listed Disputes between stakeholders in listed companies including listed companies…companies including listed companies…
Forms of disputes include:-Forms of disputes include:- Disputes between management, Disputes between management, board of board of
directors and shareholders.directors and shareholders. Disputes between shareholders.Disputes between shareholders. Disputes between mangers and board of Disputes between mangers and board of
directors.directors. Disputes between the company and its Disputes between the company and its
debtors or creditors. debtors or creditors. Disputes between the company and its Disputes between the company and its
services providers or suppliers.services providers or suppliers. Disputes between the company and its Disputes between the company and its
employees. employees.
The legislative bases for the The legislative bases for the Board of Directors’ liabilityBoard of Directors’ liability
According to the Jordanian Companies According to the Jordanian Companies Law, board of directors could be held Law, board of directors could be held responsible (severally and jointly) in the responsible (severally and jointly) in the cases of the following:cases of the following:
1.1. Violation of the laws, regulations and the Violation of the laws, regulations and the memorandum of association of the memorandum of association of the company.company.
2.2. Error in the management of the company.Error in the management of the company.3.3. Disclosing confidential nature information.Disclosing confidential nature information.4.4. Default or negligence in the management Default or negligence in the management
of the company.of the company.
JSC’s pilot projectJSC’s pilot project
Introducing ADR as a means of Introducing ADR as a means of settling disputes between a settling disputes between a company’s board of directors and its company’s board of directors and its shareholders as a good corporate shareholders as a good corporate governance practice. governance practice.
The Jordanian code of corporate The Jordanian code of corporate governance (JCCG)governance (JCCG)
The JCCG recognized ADR as an The JCCG recognized ADR as an optionaloptional right shareholders can right shareholders can resort to in order to settle their resort to in order to settle their dispute with their board of directors.dispute with their board of directors.
The code mentioned arbitration and The code mentioned arbitration and mediation as an ADR procedure, yet mediation as an ADR procedure, yet keeping the door open for other ADR keeping the door open for other ADR techniques. techniques.
Some of the questions that still Some of the questions that still need to be consideredneed to be considered
What is the best practice that should be followed by listed What is the best practice that should be followed by listed companies that want to apply ADR in the said disputes?companies that want to apply ADR in the said disputes?
Could the audit committees play a role in such dispute Could the audit committees play a role in such dispute resolution procedures?resolution procedures?
Is it rational to keep the ADR option open for all Is it rational to keep the ADR option open for all shareholders, regardless of the amount of their ownership shareholders, regardless of the amount of their ownership or there period of ownership in the company?or there period of ownership in the company?
If a shareholder gets an ADR award that entails ordering If a shareholder gets an ADR award that entails ordering the board of directors to pay him a certain amount of the board of directors to pay him a certain amount of money as a compensation, what would be the status of the money as a compensation, what would be the status of the other shareholders who suffered or sustained loss for the other shareholders who suffered or sustained loss for the same reason? same reason?
Would regulators’ facilitation or regulation of ADR be a good Would regulators’ facilitation or regulation of ADR be a good corporate governance practice?corporate governance practice?
