By Nizar Kochery /Doha


QUESTION: I work in Doha on a foreign assignment. I am the guarantor of a bank loan taken by a colleague who owns a business as its legal shareholder. The personal guarantee given by the colleague has been his business assets. The colleague has failed to repay the loan and has  left the country without clearing his debts. The local shareholder will not release any of the colleague’s share. The bank has attached all my accounts to discharge the obligations with it before taking any other security from the debtor. I now understand that I can sue the debtor as per law. But the bank refuses to provide sufficient information to enable me to lodge a case. Legally, what are the duties of a creditor when a guarantor is clearing the debt? Can surety’s property be seized prior to property of the creditor assigned?
MR, Doha

ANSWER: A guarantor is a person who will make sure that if the main borrower does not pay, the guarantor will pay. If borrower defaults, the bank would first approach the borrower to take care of the dues. However, if the borrower is unable to do so, the lender will approach the guarantor to settle the dues.
The guarantor can ask the bank to appropriate borrower’s security to recover his dues and if liquidating his assets is not sufficient, the bank has the right to recover funds from the guarantor. If the guarantor repays the dues, all the borrower’s security will get transferred to the guarantor and the guarantor can recover his money later from the borrower.
Under Article 828 of the Civil law, a creditor is bound to hand over all documents that are necessary to enable him to exercise his right of action to the guarantor at the time of discharge of the debt. Moreover when the debt is secured by a pledge of movables or by a right of retention on a movable, the creditor must surrender such securities to the surety or to court if the debtor objects to the surrender thereof.
However, when the debt is secured by a charge on real property, the creditor must comply with the formalities required for the transfer of such security. The expenses of such transfer shall be borne by the surety, subject to the right of action against the debtor.
When a real security is assigned as guarantee of a debt, and suretyship is also entered into subsequently or at the same time, without a stipulation that the surety is jointly and severally liable with the debtor, the surety’s property can only be seized after the real security assigned as guarantee has been realised.

No deduction from salary
Q: I have been working with a marketing company in Doha from 2013. The company deducts immigration and other visa service charges from my salary. However, as per the contract, the company has agreed to bear all employment related expenses, including immigration charges. Is it legal to deduct an amount from salary?
RK, Doha

A: The employer is responsible for the immigration charges of their employee. According to Article 70 of the Labour law, any part of the wage to which the worker is entitled may not be attached and the payment thereof may not be withheld except for the execution of a judicial decision.
Moreover, as per the employment contract, it is the obligation of your company to pay all expenses relating to immigration and other related expenses and it should not be deducted from your salary.

Compensation for work injury
Q: A colleague has met with a site accident and is totally disabled. How is compensation calculated in such cases? How much is the rate for total permanent disability? Is there any time limit to claim the compensation?
TA, Doha

A: The work injury resulting in a total permanent disability shall be considered as death of the worker. The amount of compensation in case of death of the worker because of the work shall be calculated in accordance with the provisions of Islamic Sharia.
The current death compensation rate is Qr.200,000. Article 113 stipulates that the right of the worker to claim compensation for the disability or death shall extinguish by the lapse of one year from the date of the medical report containing the occurrence of the disability resulting from the injury or from the date of the death of the worker.

An unincorporated establishment

Q: We are in the procedures to establish a company in Qatar. Our intention is to execute a project. Is it necessary to register as a joint venture to execute the project? We have a joint venture arrangement and but are a bit confused about its legal status? Can a joint venture company file a case on its behalf?
RMS, Doha

A: According to the Commercial Company Law, a joint venture company is an unincorporated entity, hence not required to follow the same commercial registration requirements as other categories of business. A joint venture company is formed by two or more natural or legal persons and its objectives and terms are governed exclusively by the joint venture agreement.
Regarding filing of case in its behalf, the joint venture entity has no legal personality. A third party is required to enforce claims against the joint venture partners rather than against the joint venture entity.

♦ Please send your questions by e-mail to: leges@qatar.net.qa


LEGAL SYSTEM IN QATAR
A trader must keep commercial books that are required in accordance with the nature and importance of his business activity, in a manner accurately showing his ?nancial position together with the debits and credits. The trader/merchant must keep the original journal, the general ledger and the inventory record. However a merchant whose capital does not exceed QR100,000  is exempted from this obligation.
All operations performed by the merchant related to his commercial activity will be entered into the original journal and will be entered daily in detail. Personal expenditure and withdrawals will also be entered in total every month.
According to Article 24, all operations recorded in the original journal will be carried to the general ledger ensuring that comparable operations are recorded in accounts according to their type, with reference to the page of the record in the original journal.
Details of the goods held by the merchant will be recorded in the inventory record at the end of his ?nancial year, or a total statement of them will be recorded if their details are recorded in separate books and lists. In this case these books and lists will be considered to be a complimentary part of this record.
A copy of the merchant’s balance sheet for every ?nancial year will also be recorded in the inventory record, unless a special book is allocated to it.
The commercial books must be free from any empty space or writing in the margins or erasure or insertion of what is recorded in them. Before the use of these books every page of them must be numbered and the commercial register must stamp every sheet of them.
The merchant must keep a true copy of the original of all correspondence, telegrams and so on that he sends for his commercial business.
He must also keep all correspondence, telegrams, invoices and other documents that he receives that relate to his commercial business.
Individuals who engage in a simple trade or small-scale commerce, as recorded in Article 16 of this law, and merchants whose capital does not exceed one hundred thousand riyals, are exempted from this obligation.
Article 28 stipulates that the merchant or his heirs must retain the original journal, the general ledger and inventory record for ten years with effect from the date on which they were closed.
They must also retain the correspondence, telegrams, documents and copies referred to in the previous article for a period of ?ve years.