By Nizar Kochery/Doha
QUESTION: Does Qatar Law recognise assignment of debt? I run a company which was doing well before but has incurred debts now. My children are working in Doha and they want to take the responsibility for clearing the debts. Can I pass on my liability to them under Qatar Law? Could creditors disagree with that? I have sent some mails to them but there has been no response.
TM, Doha
ANSWER: The Qatar Civil Code recognises two types of assignments, assignment of rights and assignment of debts. Assignment of right means the transfer of the benefit of a contract from one party to another and the assignment of debts means burden of a contract from a debtor to an assignee.
With regard to assignment of debts, subject to any contractual non-assignment provisions, Article 338 of the Qatar Civil Code provides an entitlement to assign obligations and in such case, the assignee replaces the debtor and assumes liability for performance of the debtor’s obligations to the creditor.
Articles 337 to 353 of the Qatar Civil Code provide the related provisions. According to Article 338, the assignor requires to obtain the creditor’s consent to the assignment. Without consent, the relevant obligations are not effectively assigned under law.
If the creditor receives a notification of assignment of obligations and does not respond within the time frame prescribed by the notice, the creditor is deemed to have rejected the assignment.
Assignment of rights and obligations under the contract, subject to any non-assignment provisions contained therein, is permitted by the Qatar Civil Code.
Fatal accident compensation
Q: How is compensation disbursed in case of death due to an accident at the job-site? In the employment contract, it is agreed that the employer will pay compensation in case of death resulting from site accidents. Is it obligatory that employer must pay this?
RM, Doha
A: As per law, in 15 days’ time from the date of death the employer should deposit the compensation in the court. The court shall distribute the compensation amongst the heirs of the deceased in accordance with the provisions of the Islamic Sharia or the personal law applied in the country of the deceased. The compensation shall be vested in the public treasury of the state if three years lapse without specifying persons entitled thereto.
Probation not mandatory
Q: I am negotiating on service conditions to be stipulated in my employment contract. Being an experienced professional quitting a reasonably good position, I don’t want the risk of probation. I also want my final settlement to be increased to five weeks of pay per year of service. Please advice.
TU, Doha
A: Probation is not mandatory. The parties to the contract may agree to commence employment without probation as probation is not compulsory under the Law. Article 54 provides that an employer and employee can agree on the amount of gratuity provided the amount equals to or is higher than three weeks’ of the employee’s termination basic salary for every full year that he has worked for the employer. Accordingly parties may set higher rate.
Receiver of bribery
Q: My friend, working with a government department, has received payment for some assistance. Is this a crime? It has been given to him by the beneficiary on his own and it has not been demanded at all. Please advice.
PL, Doha
A: According to Article 140 of the Qatar Penal Laws, whoever asks for or accepts, for himself or another party, money, benefit or a simple promise of something against undertaking any act or abstaining from any act included in his office shall be considered as receiver of bribery.
The penalty of imprisonment for a period not exceeding 10 years and a fine not exceeding what he was given or promised to be given shall apply to him, provided that it shall not be less than QR5,000.
A letter of guarantee
Q: Please advice on guarantee letters issued by a bank. Is it true that the applicant is required to deposit an equivalent amount in his account? Can the bank refuse to pay the beneficiary on any influence? Can the beneficiary transfer the guarantee? What happens if the beneficiary delays in claiming it?
GK, Doha
A: Article 409 of the Commercial Laws stipulates that the bank may not refuse payment to the beneficiary on grounds relating to the bank’s relationship with the applicant or to the relationship between with the beneficiary.
A letter of guarantee is an undertaking issued by a bank stating the purpose for which it has been issued to pay a certain amount or an ascertainable amount of money to the beneficiary on demand within the fixed period of the letter.
The bank may require the provision of a counter security against the issue of a letter of guarantee.
The bank shall be discharged of liability towards the beneficiary if no demand of payment is received from the beneficiary during the validity period of the letter of guarantee is received from the beneficiary, unless it is expressly agreed to renew the term thereof.
The beneficiary my not assign his right under the letter of guarantee to a third party without the consent of the bank. The bank shall upon expiry of the term of the letter of guarantee, return the deposit provided by the applicant for obtaining of the letter of guarantee.
♦ Please send your questions by e-mail to: leges@qatar.net.qa
LEGAL SYSTEM IN QATAR
A mortgagee may, upon maturity of the debt, take proceedings for the expropriation of the mortgaged property against a third party holder, unless this third party holder chooses to pay the debt, redeem the mortgage or abandon the property.
Any person is deemed to be a third party holder who acquires the property or any other real right over the property by any way other than inheritance capable of being mortgaged, without being personally responsible for the debt secured by the mortgage.
The third party holder who has transcribed his title deed and who was not a party to the proceedings in which judgement was given against the debtor to pay the debt may, if the judgement was subsequent to the transcription of his title, raise the defences which could have been raised by the debtor. He may, in any case, raise the defences which the debtor still has the right to raise after the judgment.
A third party holder may, upon maturity of the debt secured by the mortgage, pay the debt and its accessories including the costs of proceedings from the date of the formal summons, and will retain this right up to the date of the sale by public auction. In such a case, he has a claim for all he has paid against the debtor and against the former owner of the mortgaged property.
He may also be subrogated into the rights of the creditor who has been paid in full, with the exception of those rights relative to guarantees furnished by a person other than the debtor.
Article 1094 stipulates that a third party holder must maintain the inscription of the mortgage which he is subrogated to the creditor until striking off the inscriptions that existed at the time of the transcription of his title to the property in the Land Registry.
If, by reason of his acquisition of the mortgaged property, the third party holder is a debtor of a sum due immediately for payment and sufficient to satisfy all the creditors whose rights are inscribed on the property, each one of the creditors may compel him to pay his claim.
When the debt owed by the third party holder is not yet due for payment, or is less than the debts due to the creditors, or different from them, the creditors may, if they are all agreed, claim from the third party holder payment of what he owes up to the amount due to them, and payment will be effected in accordance with the conditions on which he has agreed to pay in his original undertaking, and at the time agreed upon for payment.
In neither case can the third party holder avoid payment to the creditors by abandoning the property, but when payment has been made to the creditors the property is deemed to be free of all mortgages and the third party holder has the right to call for striking off the inscriptions existing on the property.