Compulsory Liquidation of Commercial Companies in The State of Qatar.

Compulsory Liquidation of Commercial Companies in The State of Qatar.

 

Author: “Mohammad Mufid” Ratib Qurashi.

 

What is Liquidation?

Liquidation is the process of shutting down a company and distributing its assets to claimants. It usually occurs when a company is insolvent or is unable to pay its debts. When a company's operations halt, its leftover assets are used to pay creditors and shareholders in a certain order that is identified in multiples Laws and Regulations. Liquidation can be both compulsory and voluntary; Compulsory liquidation happens when a court orders the company's liquidation due to negligence or non-compliance to certain commitments. Whilst the voluntary Liquidation takes place when the shareholders of a company decide to terminate operations due to lack of profitable business or due to the failure of the company to complete its projects or to achieve the objectives of its establishment. However, this article will focus on compulsory liquidation of commercial companies, a topic that was regulated in the Qatari Commercial Companies Law number (11) of the year 2015.

 

The Law:

Liquidation and Dissolution of companies are regulated in Chapter (11) of the Law number (11) of the year 2015; the first section of this chapter discusses dissolution whilst the second section discusses the provisions of liquidation.

It is stipulated that companies shall immediately enter liquidation upon dissolution. It shall keep its legal identity to the extent essential for the liquidation during the liquidation phase. The phrase "under liquidation" should be clearly displayed next to the company's name throughout this phase. Generally, the Liquidation shall be done according to the regulations previously sat in the company’s article of association. However, if the articles of association did not include such provisions, this section of the Law shall apply on any liquidation process. According to the Law, when a business dissolves, its managers and directors’ must hand over control to the liquidator. The liquidation procedure should be specified by the competent Court, and one or more liquidators must be appointed. In addition, the liquidator's mission will continue even if the partners of the company die, declare bankruptcy, become insolvent. Fees of the liquidator must be determined by the competent court. If more than one liquidator is appointed, they must operate jointly unless it is indicated otherwise. Liquidators are equally and severally liable for damages caused by their actions or inactions to the firm, its partners, and third parties.


The law obliges the liquidators to commence all the work necessary to complete the liquidation process. However, the following is mentioned explicitly in article (310):

·        Representing the firm in court and resorting to mediation and arbitration.

·        Meeting the company's obligations, and the fulfilment of all necessary processes to maintain the company's assets and interests.

·        Attempting to sell the firm's assets at the greatest price feasible and collecting debts owing to the company from third parties.

 

The liquidator can’t engage in new work unless it is necessary to finish pre-existing work. If the liquidator exceeds the scope of the liquidation, he is personally liable for it. With regards to the company’s debts’, all due dates for the company's debts will be void upon dissolution. All creditors must be notified by registered letters that the liquidation procedure has begun and they must be invited to submit their claims. The liquidator shall comply with the following order stipulated by the Law during the liquidation process:

 

1.     liquidation costs, including the liquidator's fees.

2.     The wages and salaries of the company's employees.

3.     The amounts owed to the State.

4.     The rent that the company owes to the landlord for any rented premises.

5.     Other sums due in accordance with applicable laws.

 

Without the approval of a competent court or the Minister, the company's liquidation duration should not exceed three (3) years.

 

For further information don’t hesitate to contact any of our professionals at Alhababi Law firm. 


Divorce for Lack of Sustenance

Divorce for Lack of Sustenance


Author: Islam Al-Bayed

 

Allah says ((Men are in charge of women by [right of] what Allah has given one over the other and what they spend [for maintenance] from their wealth.)).

 

The objective of the divine legislation is to immunize the spouses within the Shariah regulations which came in our Holy Qur’an, the most important of which is to keep the wife financially sustained and to prevent the harm inflicted on the wife if the husband refrains from spending. The Qatari family law has confirmed this principle by enabling a woman to demand divorce from her husband for reasons specifically stipulated in the law.

 

I would in the beginning like to define sustenance in Fiqh (Islamic jurisprudence) which is what is required of money to secure the necessities for survival.

 

It was narrated by Prophet Mohammed, may God’s prayers and peace be upon him that he said in his farewell sermon: “Fear God with regard to women, for you have taken them with the trust of God and made their private parts permitted (been made Halal) by the word of God, and they have upon you their sustenance and their clothing in a reasonable manner.”

 

The text of Article 137 of Family Law No. (22) of the year 2006:

“If the wife requests divorce for lack of sustenance from her present husband who has no apparent money, and he refused to spend, and does not plead insolvency, and insists on not spending, it is decided to separate them immediately.”

 

The evidence between the Qur’an, Sunnah, Fiqh and the law is one, and that is the unanimity that the wife’s sustenance is an obligation to her by her husband. If the husband refused to spend for his wife who has given herself to him, and his refusal is without legal (Shariah) justification, he is unjust to her and the judge obligates him to pay it, if he is affluent and is obstinately refusing, then the wife may ask for a divorce for lack of sustenance.

But if his insolvency is not proven, the judge gives him a period of no more than three months. If he refused and the three months have passed without paying the sustenance and he has not spent, the judge will divorce him.

 

This is confirmed by the text of Article 138:

“If the wife requests separation (divorce) for lack of sustenance from her present husband who has no apparent money, and he refused to spend, and he claims and proves insolvency, the judge shall give him a period not exceeding three months, and if he does not spend, he separates them.”

 

We will not neglect to talk about the husband who claimed inability. In this case, proof is required. If he proves his inability, his ruling is the ruling on insolvency, and if he does not prove it, he is ordered to spend or divorce, pointing to the text of Article 139:

“If the wife requests separation, for lack of sustenance, from her present husband who has no apparent money, and he refused to spend, and claims insolvency, and does not prove it, the judge shall set a deadline not exceeding one month for him to spend, otherwise he separates them after the term.”

 

The text of Article 141:

If the wife requests separation, for lack of sustenance, from her absent husband in an unknown place, and he has no apparent money, and he did not leave her money from which she can spend, the judge separates them.

 

The text of Article 142:

Taking into account what is stipulated in the two previous articles, the judge does not separate (divorce) the spouses until after the case is proven, and the wife has taken the judiciary oath that there is lack of sustenance.

 

For further information about Divorce, Don’t Hesitate to contact any of our professionals at Alhababi Law Firm!

 

 


Qatar Free Zones

Qatar Free Zones

 

Author: ”Mohammed Mufid“ Ratib Qurashi

 

 

Introduction:

Attracting foreign investments is a goal that each and every state in the world is vigorously working hard to achieve. Consequently, and since Qatar is one of the fastest Developing states in the region, the strategy of attracting investments has been adopted by the state which led to bold decisions, measures and procedures.

 

Qatar Free Zones Authority (QFZA):

Qatar Free Zones Authority (QFZA) was founded in 2018 to develop and manage Qatar's new free zones. The Authority was constituted by Legislative Decree Number (21) of 2017, as amended by Law Number (34) of 2005. It was established as an autonomous agency in 2018 with the mission of fostering economic growth and establishing a cluster of world-class free zones in Qatar.

 

Why QFZ?

Companies established in the QFZ have the following advantages:

·       No customs charge

·       No corporation taxes

·       100 percent foreign ownership

·        No individual income taxes.

·       Renewable 20-year tax holiday.

 

Moreover, the QFZA has approved a broad range of activities that entities wishing to establish in the Free Zone may engage in, including logistics and warehousing, industrial products and services, food and beverages and consumer goods, information technology services, leisure and hospitality, professional and business services, and marine activities and services.

 

 

For further information in regards with QFZ, our professionals at Alhababi Law Firm are always willing to help and assist.


Rejecting a photocopy of an original document in the scope of Qatari Legislations.

Rejecting a photocopy of an original document in the scope of Qatari Legislations.


Author: Mohamed Zied Boussetta


Contributor: "Mohammad Mufid" Ratib Qurashi

 

The Qatari legislator mentioned the term “rejection” in article (374-Repeated-subarticle (1)) from the civil and commercial procedure law -2019 amendments, while the legislator mentioned the word explicitly, a definition of the word “rejection” was not illustrated, referring to various dictionaries, the word rejection means the act of not accepting, believing or considering something.

 

It has always been the case where parties submit a photocopy of an original document to the court, upon that, the party the document is submitted against has the right to reject the photocopy in order to weaken its opponents position by questioning the authenticity of the aforementioned document, furthermore , the party could ask the court to oblige the party submitting the photocopy to submit the original document in order for the court to consider it valid and authentic and in such scenario, if the party submitting the photocopy couldn’t manage to submit the original document, the court must not consider the photocopy as an effective document nor could rely on it in any decision related to the case.

Such acts by courts are consistent and approved by the highest degree court in the country, the court of cassation and in many precedents have established the legitimacy of such act whereby we mention some of them as follows:

 

·        Judgement number (257/2015)-commercial and civil circuit:

 

“If the photocopy submitter claims that the original document is attached to another case or is filed with one of the official authorities, the court must enable him to obtain it or an identical copy whenever his opponent rejects the photocopy “.

 

 

 

 

·        Judgement number (441/2017)-commercial and civil circuit:

 

“If the document is submitted as a scanned image of automatic data messages or E-mails, it gains the authenticity of proof that is equal to documents that are transcribed and affixed to a written signature and the documents remains resistant to the opponent’s rejection and the request of submitting the original document cannot be made, as long as it has been proven that the document contains nothing but a transcript of what the

 E-mail or Electronic medium in question contains.”

 

·        Judgement umber (275/2016)-commercial and civil circuit:

 

The customary document is considered to have been issued by the person who signed it unless he explicitly denies what is attributed to him in terms of handwriting, signature, stamp or fingerprint, meaning that the signature, the stamp imprint or the fingerprint is the only legal source to give authenticity to the customary paper, meaning that if the issuer denied the existence of his signature, stamp or fingerprint then the photocopy can’t be used for further proof, but the second sub-article of article 200 of the civil and commercial procedural law states that if a the court discussed a the subject matter of a customary document, then none of the parties can question the authenticity of the photocopy by denying the signature, stamp or fingerprint, this article can be justified as the court doesn’t discuss any document unless the case parties have reviewed it and took their full right of objecting on any document submitted, in other words parties have implicitly agreed on the authenticity of the documents submitted, while in this stage of litigation, this denial is only used to adjourn the hearings and decisions, in other words wining time, and this was confronted by the legislator in the aforementioned article.

 

Last but not least, the burden of proof relies upon who denies the signature, stamp or fingerprint according to article 236 of the civil and commercial procedural law.






Voluntary Liquidation of Commercial Companies in the State of Qatar.

Voluntary Liquidation of Commercial Companies in the State of Qatar.


Author: “Mohammad Mufid” Ratib  Qurashi

 

Introduction:

After discussing the provisions of Compulsory Liquidation stipulated in the Qatari Commercial Companies Law (CCL) in our former article, it is of a great importance to introduce the reader to the concept of Voluntary Liquidation of Commercial Companies. Going through the Qatari (CCL), a brief overview of the Voluntary Liquidation process provisions will be delivered in this article.

 

What is Voluntary Liquidation?

Liquidation is the process of shutting down a company and distributing its assets to claimants. It usually occurs when a company is insolvent or is unable to pay its debts. When a company's operations halt, its leftover assets are used to pay creditors and shareholders in a certain order stipulated by the governing laws. Voluntary liquidation takes place when the shareholders of a firm decide to terminate operations due to lack of profitable business or due to the failure of the company to complete its projects or achieve the objectives of its establishment.

 

Article (291/5) of the CCL states that a company will be dissolved for the following reasons: “5) The partners unanimously agree to dissolve the company before the end of its term, unless the Company’s Contract states its dissolution by a certain majority”. The legislator explicitly provided the right of Company’s shareholders to dissolve the company, which leads to the process of voluntary liquidation as article (304) of the CCL states that: “The company shall enter liquidation as soon as it is dissolved.”.

 

The Law:

During the Liquidation process, the company shall keep its legal identity to the extent essential for the liquidation during the liquidation phase. The phrase "under liquidation" shall be clearly displayed next to the company's name throughout this phase. Although the Law stipulates that managers lose their authority after the dissolution of the company, they shall remain in charge and be considered as liquidators before third parties until a liquidator is appointed. The provisions mentioned in articles (307-321) of the CCL shall apply on the liquidation process unless it was mentioned otherwise in the company's memorandum of association, or upon the shareholders’ agreement upon dissolution. The appointment of liquidator/liquidators shall be upon a decision by the partners or a general assembly ordinary majority. It is important to note that the liquidator's job does not end with the death, bankruptcy, or insolvency of the shareholders, even if appointed by them.

 The liquidator shall be dismissed in the same method as he was assigned. Dismissal of the liquidator should involve the appointment of a successor liquidator. The liquidator's dismissal must be declared in writing and will take effect solely against third parties from the date of the declaration.

 

The Liquidator is obliged to submit the following to the shareholders/general assembly of the company:

·       During three months after starting his work, the liquidator must reply to the shareholders/general assembly enquiries (clarifications) regarding the liquidation process.

·       If the liquidation process takes more than one year, the liquidator must provide the shareholders/general assembly with a balance sheet, a profit and loss account summary and a report of the liquidation works.

·       The liquidator shall provide a final statement to the shareholders/general assembly at the stage of completing the liquidation procedure.

 

The period of the company's liquidation shall not exceed three (3) years unless approved by the competent court or the Minister.

 

We will always be glad to provide you with further information and details relevant to Liquidation Processes and developments in the State of Qatar at Alhababi Law Firm!

 


Qatar’s Ministry of Transport and Communication

Qatar’s Ministry of Transport and Communication latest Regulations on the Protection of Personal Data Privacy.

 

Author: “Mohammad Mufid” Ratib Qurashi.

 

Introduction:

 

Following the issuance of Law number 13 of 2016 on the Protection of Personal Data Privacy (PDPP Law), the Ministry of Transport and Communications (MOTC) released regulatory recommendations on Personal Data Privacy in January 2021. In addition to clarifications, it provides a collection of guidelines, controls, and checklists to ensure users compliance with the Law. Furthermore, it also includes guidance for individuals to become more aware of their rights and responsibilities. After discussing the (PDPP) Law in our previous article, the key features of the 2020 regulations will be reviewed briefly in this article.


·    What personal data processing do these guidelines apply to?

The guidelines apply to any personal data processed electronically, via a combination of electronic and non-electronic techniques, or via non-electronic means in advance of electronic processing. They apply to every entity that handles personally identifiable data.

·      How shall the Regulated Entities apply these standards?

The regulations highlight that any data controller shall comply with the law and the regulations if the information collected is not personal nor related to family or household purposes. A risk-based approach based on the key privacy principles mentioned in the regulations shall be adopted by controllers that need to comply. Regulated entities must evaluate how they process personal data and accept accountability for their actions.

 A Personal Data Management System (PDMS) for the user’s data and privacy protection might be needed in some scenarios as per the regulations. However, the guidelines didn’t limit or determine any certain measures that regulated businesses should take. The strategy adopted by the regulated businesses and the strategy’s execution shall be determined by the business itself.

·       How will individuals benefit and commit to the guidelines?

The PDPP Law outlines people's rights and regulated entities' obligations in regards with personal data. Individuals have the right to have their data protected and processed legitimately. Moreover, individuals can expect their personal data to be treated in compliance with the PDPP Law, and if they think their data is not protected or used lawfully, they can submit a complain to the CDP and controllers must enable them to complain about it directly to the controller. The guidelines assist individuals in understanding when and how to exercise their rights, how to file complaints to controllers and CDP, and how CDP may investigate them.

·       What topics do the guidelines cover?


¨     Controllers and Processors.

¨     Data Privacy by Design and by Default.

¨     Data Privacy Impact Assessment (DPIA).

¨     Electronic Communications for Direct Marketing.

¨     Exemptions applicable to Data Controllers.

¨     Individual complaints and rights.

¨     Personal Data breach notifications.

¨     Personal Data Management System (PDMS).

¨     Principles of Data Privacy.

¨     Privacy Notice.

¨     Record of Processing activities.

¨     Special nature processing.


Regulated Entities should check the regulations’ updates constantly to ensure they are up to date with the newest guidelines.

For further information in regards with the PDPP Law and CDP regulations, Don’t Hesitate to contact us at Alhababi Law Firm.



Bankruptcy Provisions in The Qatari Legislations

Bankruptcy Provisions in The Qatari Legislations.


Author: ‘Mohammad Mufid’ Ratib Qurashi


Introduction:

Bankruptcy is a legal process that is initiated when an individual or corporation is unable to repay their existing obligations. The bankruptcy procedure begins with a petition filed either by the debtor or on behalf of creditors. All of the debtor's assets are valued and assessed, and the assets may be utilized to repay a portion of the debt. Bankruptcy allows an individual or business to restart by waiving unpayable debts and enabling creditors to seek repayment based on liquidated assets. In the State of Qatar, Bankruptcy provisions are regulated in both Law No. 27 of 2006 Promulgating the Trading Regulation Law and Law No. 11 of 2015 Promulgating the Commercial Companies Law. Articles relevant to bankruptcy in both Laws will be introduced and explained briefly in this article.

 

Bankruptcy in the Trade Law (Law No. 27 of 2006 Promulgating the Trading Regulation Law):

Bankruptcy is regulated in the 6th and last part of the Trade Law starting from article (606) and until the last article of the Law – article (846) –, it is divided into six chapters as follows:

●      Chapter One: Declaration of Bankruptcy and its Effects (606-675)

●      Chapter Two: Administration of Bankruptcy (676-732)

●      Chapter Three: End of Bankruptcy (733-779)

●      Chapter Four: Rehabilitation of the Bankrupt (780-791)

●      Chapter Five: Preventive Composition (792-833)

●      Chapter Six: Bankruptcy Offences (834-846)

 

To start with, there are certain conditions identified by the law for individuals to be eligible for the declaration of bankruptcy; an individual must be considered as a “Merchant” as per the provisions of this Law, stopped and are unable to pay their debts and whose financial affairs are unstable and consisting a threat to their creditors’ rights. Bankruptcy may only be declared by a court decision. However, there are no bankruptcy courts that are exclusively dedicated to this purpose. The procedure can be started by a variety of parties, including the merchant, a creditor, or the court. The merchant willing to be declared bankrupt must submit an application to the designated court. The application must contain documents that clarifies the merchant’s financial status and his debts amounts and creditors, documents relevant to the aforementioned application are explicitly stated in the Law.

Bankruptcy effects the individuals declared bankrupt in many aspects, examples of these effects are:

●      They are banned from voting, holding office in the Shura Council, Central Municipal Councils and the Chamber of Commerce.

●      They cannot be managers, directors, or members of any company's management board.

●      They are restricted from business operations.

●      Debtor transactions undertaken after payments terminated but before bankruptcy was declared may be disallowed or clawed back.

 

 

For Further Information about Bankruptcy in Qatar, don’t hesitate to contact any of our professionals at Alhababi Law Firm!


Regulations of Cheques in the State of Qatar

Regulations of Cheques in the State of Qatar.

 

Author: ‘Mohammad Mufid’ Ratib Qurashi

 

Introduction:

A cheque is a written, dated, and signed document that instructs a bank to pay the bearer a certain quantity of money. The individual or entity that writes the cheque is referred to as the payor or drawer, while the individual to whom the cheque is made is referred to as the payee. On the other side, the drawee is the bank on which the cheque is drawn. Cheques may be deposited or cashed. When a payee delivers a cheque to a bank or other financial institution, money is deducted from the payor's bank account. It is another method of instructing the bank to transfer payments from the payor's account to the payee's account. In principal, the cheque is a tool of payment and is not an instrument of credit which is considered as money and replaces it when settling obligations. However, people are misusing cheques and are using it as an instrument of credit (guarantee) for several purposes such as house rents or loans which leads to “bounced cheques”. A bounced cheque is a cheque that was presented for payment but could not be completed due to the cheque writer's insufficient money to cover the payment. When a cheque writer's account does not have sufficient amount of money, his or her bank will reject the payment request and return the cheque to the payee's bank. Rather of paying money to the recipient, the payment request "bounces." Qatari Courts are suffering from the huge number of cheques related cases due to such misuse and behavior. Therefore, new regulations were introduced lately in a try to cure this misbehavior.

 

 

 

Bounced cheque case procedures in Qatar:

If the cheque is returned due to insufficient cash, the payer may face punishment under Qatari law. The payee holding returned cheques can contact the prosecution's cheques cases division for the purpose of prosecuting the payer. However, if the payer made the payment at any time after the bank returned the cheque and after the payee has filed a cheque case, the payment of the cheque amount alone does not absolve the payer of criminal assaults. The payer must notify the court of the payment and the defendant must make a motion for withdrawal of prosecution. Otherwise, the Court procedures will be resumed in the absence of knowledge of the parties' settlement. Not settling the conflict relevant to the bounced cheque will lead to both civil and criminal consequences on the payer.

 

New Measures:

Firstly, the court, with the assistance and cooperation of the relevant authorities, has begun compiling a blacklist of those who routinely write cheques without an acceptable balance in their account and have therefore faced many convictions, as well as those who have failed to pay the cheque due amount. The Criminal Courts established a cooperation mechanism with the Qatar Central Bank to begin implementing the Article 604 of Law No. 27 of the 2006 Trade Law processes. Additionally, the Court has begun enforcing a supplementary penalty outlined in Article 604 of Law No. 27 of the 2006 Trade Law, which states that if a person is convicted of a cheque-related crime, the court may order the withdrawal of his or her cheque book and prohibit him or her from obtaining a new cheque book for a period of one year.

 

 

The Penal Code:

According to Article 357 of the Penal Code, courts will obligate the guilty person to pay the value of the cheque and the beneficiary's expenditures without requiring the convicted person to file a civil lawsuit. Moreover, offences involving cheques without balance are punished by imprisonment for a term of three months to three years and a fine of at least QR 3,000.

 

Further discussion in relation with the capability of payees to use the cheques as a proof for their debts and rights in confrontation of their payers will be introduced in our coming Articles. For further Information about cheques regulations in Qatar, don’t hesitate to contact any of our Professionals at Alhababi Law Firm.


Qatar’s new mandatory health insurance law, a quick overview.

Qatar’s new mandatory health insurance law, a quick overview.

 

Author: “Mohammad Mufid” Ratib Qurashi.

 

Introduction:

In one of the recent steps in the continuous journey of development in the state of Qatar, a new health insurance scheme was introduced in November 2021 by the law number 22 of 2021 regulating the health services in Qatar. As per the Ministry of Public Health (MoPH) announcement on the matter; the new health insurance system will reduce waiting times in the government health facilities in the country and provide appointments for medical consultations within a time that meets the health needs of citizens at the highest level of quality.” i.e. will lead to the development of the health sector and the services provided to the public. The author will shed the light on the most important updates in the aforementioned Law.

The Law:

Law number 22 of the year 2021 regulating the health services in Qatar was issued in November 2021 and is supposed to enter into force in May 2022. It consists of 6 chapters including 48 articles divided as follows:

·        Chapter One: Definitions (1-5)

·        Chapter Two: Providing Healthcare services to Citizens (6-7)

·        Chapter Three: Providing Healthcare Services to Expatriates and Visitors (8-11)

·        Chapter Four: Obligations of parties in a Health insurance relation (12-24)

·        Chapter Five: Grievances committee (25)

·        Chapter Six: Penalties and Concluding Provisions (26-48)

What changed?

Expatriates, current businesses and visitors of Qatar will be affected by the new requirements provided in the Law. As per Article (8) of The Law, both Expatriates and Visitors must have health insurance in order to acquire the basic healthcare services. Business owners are enabled to provide additional healthcare services accordingly. Article (10) of The Law emphasizes on the mandatory of the health Insurance as it states that:

1.     Basic Health Insurance coverage is required for the issuance of entry permits, residence permits and expatriates employment.

2.     Basic Health Insurance coverage is required for the Renewal of both entry and residence permits.

3.     The coverage’s duration shall extend to cover the stay/ residence duration.


Article (11) of The Law provides that both Sponsors and Employers must cover Visitors / non-Qatari employees and their families in the mandatory health insurance through contracts with registered insurance companies. Article (13) of The Law obliges Employers to pay the insurance fees of the employees and their families, provide them with the Health Insurance card and demonstrate that their workers are covered by the mandatory health insurance. Same applies on sponsors. However, Visitors shall either pay their health insurance fees or prove that they have an international health insurance that is valid in Qatar.

 

Fines and penalties:

 

Article 32

Up to 300K QAR fine.

Employers / sponsors refusing to: cover their workers, pay their insurance fees or collecting any amount of money relevant to the insurance fees.

Article 31

Up to 250K QAR fine.

Registered Healthcare providers refusing to deliver any agreed-on service.

Article 30

Up to 200K QAR fine.

Insurance Companies that deal with unregistered healthcare providers or insurance mediators.

Article 29 & 28

Up to 500K QAR fine.

Unregistered healthcare providers delivering healthcare services/ any healthcare provider refusing to deliver healthcare services in cases of accidents and emergencies.

 

 

For Further information relevant to Qatar’s new mandatory Health Insurance system, don’t hesitate to contact any of our professionals at Alhababi Law firm.


Contracting Agreements in the State of Qatar

Contracting Agreements in the State of Qatar

Author: “Mohammad Mufid” Ratib Qurashi


Introduction:

The author will discuss in this article contracting agreements. Relevant Qatari legislations and Professor Abd el-Razzak el-Sanhuri’s masterpiece “Al-Wasīṭ fī sharḥ al-qānūn al-madanī al-jadīd” will be used for reference and guideline in this article.


What is a contracting agreement?

In simple words, Professor Sanhuri refers to a contracting agreement as being a contract whereby one of the contract’s parties commits to manufacture a product, or to do a certain job in return to a determined wage paid by the other contract’s party. Moreover, Article (681) of the Qatari Civil Law states that a contracting agreement shall be defined as “a contract under which either party undertakes to make a thing or perform any work for the other party in consideration of a wage, without being an agent or representative of such party.” It is worth mentioning that Prof. Sanhuri differentiated between a contracting agreement, employment agreement, agency and representation agreements for several reasons that lead to different implications and consequences.


Contractor’s Obligations:

According to Prof. Sanhuri, the contractor’s main obligations can be introduced as follows:

1.    The execution of the assigned work.

2.    Handing over the work after its completion.

3.    Guarantee of work after completion.

The contractor is obliged to perform the work in accordance with the agreement. However, if it was not regulated in the agreement’s provisions, the contractor shall perform the work in accordance with the applicable practices. Consequently, the contractor shall be deemed liable for the mistakes directly resulting from him or his workers. In addition, if the contracting agreement obliged the contractor to provide work materials, partially or fully, the contractor is liable for any defects in the materials provided by himself. As mentioned earlier, handing over the work after its completion is mandatory. Methods of handing over the works after completion differ according to the nature of the agreement. Finally, after handing over the work, the contractor must guarantee the work. The duration of the guarantee differs from one case to another. However, generally the duration allowed by the legislator for claims related to guarantee is one year. It is also worth noting that in case of construction contracting agreements, the provisions that apply on the contractor or the engineer are different and are stated explicitly and in more detail in the Qatari Civil Law; 10 years guarantee duration.


Conclusion:

This article is intended to illustrate an introduction for a series of articles that will try to focus on each detail in contracting agreements; construction contracting agreements in particular. Until then, our professionals at Alhababi Law Firm are always ready to help and assist!