Question: I have availed a bank loan and used to pay the instalments monthly without any due. Last month my contract with my company ended and my services were terminated. Now the bank has filed a case against me stating that my cheque has bounced. I issued a blank cheque as a security and guarantee for the loan and it was agreed that the cheque shall not be presented but will be kept as guarantee. Now the bank has taken action and presented the cheque after filling in the details. I didn’t write any amount in the cheque. Can I deem it as guarantee cheque?
DG, Doha
Answer: The case may be defended on jurisdiction issues that these transactions should be considered as civil transactions that are subject to the rules of civil prosecution. If successful, the criminal court may quash the case. Taking (post-dated cheques (PDCs) for loan repayments is a common practice of banks. The offence of issuing a bounced cheque occurs when a cheque is written with knowledge that there are insufficient funds.
The general presumption while disposing the matter is that the court will assume that the cheque owner who signed the blank cheque has authorised its holder to write all its required information, including the date and the amount. Unless otherwise established, the objection on the basis that the cheque was issued as guarantee is not accepted by law.
Violation of trademark
Q: We have a registered trade mark/logo in our company name. The name was registered by the former owners but they all transferred shares and no more continue as partners in the company. Now, one of the former partners started a new company in a similar name and trade name is the logo. We have contacted trademark agents and they advise us to go to the police. What is the maximum punishment if we approach the criminal court for such violation?
BM, Doha
A: Article 388 of the Qatar Penal Laws, without prejudice to any more severe penalty stipulated herein or under any other law, any person who breaches a third party’s ownership of intellectual property and rights as protected by the law or an international agreement to which the State of Qatar is a signatory, shall be punished with imprisonment for a term not exceeding three years and/or a fine not exceeding QR20,000. All the materials produced in breach of any of these rights shall be confiscated.
Rules governing leave salary
Q: I am planning to avail my annual leave. One of my colleagues informed me that my company will not provide the leave salary before vacation due to bad economic conditions. Is this legally valid? Can the company terminate me from service while I am on vacation? I suspect a mass termination at the company. Please advise.PK, Doha
A: According to Article 68 of the Labour Law, a worker is entitled for leave wages prior to leaving for vacation. The employer shall pay to the worker before the worker takes his annual leave the wages to which the worker is entitled for the work he has performed up to the date of taking the leave in addition to the leave wages to which the worker is entitled. Termination during annual leave is illegal. According to Article 85 of Labour Laws, the employer shall not terminate the service contract or notify the worker of the termination thereof during any of his periods of leave. Any notification of the termination of the contract is also prohibited if the notice period expires during any of such periods of leave.
Starting a new company
Q: I have been working since 2008 in Qatar and now my company has terminated me from service as they are in deep crisis. I am planning to start a new company with my friends, but they are afraid of the liability or risk that is involved in starting a company. What liability is there for a shareholder in a limited liability company? They are concerned about their personal property. We decide to invest QR300,000 as capital. Please advise.
AD, Doha
A: The shareholders will generally not be held personally liable for the debts of, nor for claims against their business. Basically, this means that if company was sued and ordered to pay a judgment, shareholders will not be obliged to pay those debts from personal assets. If the business accrues debts, shareholders shall be liable for any capital that shareholders may have in the business. However, shareholders should also realise that their liability is not always guaranteed, because there are situations, such as if a shareholder signs a personal guarantee in order to get a business loan, that member can then be liable for that business debt.
- Please send your questions by e-mail to: [email protected] (Mobile:55813105)
LEGAL SYSTEM IN QATAR
According to Article 729, if the bankruptcy has terminated through union and conciliation has been made with one or more of the partners, the company properties may not be allocated to fulfil the terms of such conciliation or to guarantee its enforcement. The partner who has obtained the conciliation shall be discharged of the joint liability. If the conciliation with the company has been made, and the bankruptcies of the partners terminate by union, the conciliation shall not apply to the bankruptcies of the partners unless its subject matter is relinquishment of the company property.
If the bankruptcy of the company and the bankruptcies of the partners terminate in conciliation, each conciliation shall be considered independent from the other, and its conditions shall not apply except to the creditors of the relevant bankruptcy. The bankruptcy of a company may not terminate in conciliation if the company is in the process of liquidation. If a company which is not in the process of liquidation applies for conciliation, the proposals for such conciliation shall be determined with the approval of majority of partners who owns more than half in the jointly liable partnerships and limited partnerships and with the approval of an extraordinary general assembly or meeting of partners in other companies. The legal representative of the company shall submit the proposals for conciliation to the body of creditors.
As per Article 731, if a petition for bankruptcy of a company is submitted, in addition to declaring the bankruptcy of the company, the court may declare the bankruptcy of each person who has carried out, under cover of company, commercial activities for his own account and has disposed of the company’s property as his own.
If it is established that the assets of the company are insufficient to cover at least 20% of its debts, the court, at the request of the receiver, may order all the members of the board of directors or directors or some of them, jointly or severally to pay all or some of the debts of the company, unless they establish that they have exercised necessary care in the management of the company.
According to Article 733, after preparing the final list of debts, the court may, at the request of the bankrupt, terminate the bankruptcy if it is established that the bankrupt has paid all the creditors who registered their debt in the bankruptcy, or has deposited with the receiver the amount necessary to settle the said debts, including the principal amount and expenses.
As per Article 735, the adjudicator shall order the court registry to summon, by means of registered letters with acknowledgement of receipt, the creditors whose claims have been finally or provisionally accepted to attend the negotiations for the conciliation. In the absence of any dispute in respect of the debts, this summons shall be made within seven days of the date on which the ?nal list of debts has been drawn up. If any dispute arises, the summons shall be made within ?fteen days of the date on which the time allowed for an appeal against the last decision of adjudicator with regard to the acceptance or rejection of debts. The receiver shall, within the above mentioned period, publish the summons to attend the negotiations for the conciliation in two daily newspapers.