QUESTION: We hired a subcontractor to carry out work at our construction site. The quotation was quite fair and they started the work. Later on they notified us of an increase in the estimated price and wanted additional payment to continue with the work. We disputed and agreed to terminate the contract after paying for the completed works. But they are claiming compensation now. If they approach the court, being the contractor do we need to compensate them? What is the law? Please advise.        
MP, Doha

ANSWER: According to Article 708 of the Civil Laws, when a contract is concluded in accordance with an estimate drawn up on a unit price basis and it becomes apparent during the course of the work that it will be necessary in order to complete the works to considerably exceed the estimated price, the contractor is bound to notify the employer thereof forthwith and to inform him of the anticipated increase in price; if he fails to do so he forfeits his right to recover the expenses incurred in excess of the estimate.
On receiving the notification from the contractor, the employer may rescind the contract and stop the work, provided that he does so without delay and pays the contractor for the cost of work done by him, estimated in accordance with the terms of the contract, without being liable to compensate the contractor for the profit he would have realised if he had completed the works.

Lessee can seek cancellation of lease
Q: I have rented a building in Doha for business purpose specifying the activities and the landlord also agreed to sublet the premises. Some clients have given advance to me with regard to the sublet and with that money I have paid advance to the landlord.  But now the municipality has refused permission for the business activities in the place. The landlord is not agreeing to terminate the contract and refuses to return the advance amount and the cheques. He wants me to find some other tenant.
Is there any provision in law favouring my position? Please advise.        
CR, Doha

A: As per Article 591 of the Civil Laws, if the leased property is delivered to the lessee in such a condition that it is unfit for the use for which it is leased, or if its usefulness is appreciably diminished, the lessee may demand either the cancellation of the lease agreement or a reduction of the rent equivalent to the loss of use; in both cases the lessee is entitled to claim compensation, if compensation is due without prejudice to his right to oblige the lessor to carry out the necessary repairs to enable him to get the intended benefit.

Obligations under tax laws
Q: Our company has many branches all over the world. In Qatar, we have opened a limited liability company to engage in the business. We used to obtain services technical / non-technical from our branches outside Qatar. What will be our tax obligation under the tax laws in Qatar? Please advise.            
DE, Doha

A: According to Article 11 of the Tax Laws, the tax rate shall be 10% of the taxable income of the taxpayer during the taxable year. Subject to the provisions of tax agreements, payments made to non-residents with respect to activities not connected with a permanent establishment in the state shall be subject to a final withholding tax of (i) 5% of the gross amount of royalties and technical fees; also (ii) 7% of the gross amount of interest, commissions, brokerage fees, directors’ fees, attendance fees and any other payments for services carried out wholly or partly in the state.

Punishment for destroying properties
Q: I am staying with my colleagues in a villa provided by the company. I had some issues with my roommate and in a fit of anger I destroyed his mobile phone. I offered to pay him a reasonable compensation but he is asking for an exorbitant amount. If I don’t pay up he has threatened to complain to police. I cannot afford that much amount as compensation. If he goes to the police, what will be the maximum punishment?  
SK, Doha

A: According to Article 389, any person, who intentionally destroys, damages or spoils another person’s movable or immovable properties, or makes them unusable, invaluable, useless or invalid, shall be punished with imprisonment for a term not exceeding three years and/or a fine not exceeding QR10,000. The punishment shall be imprisonment for a term not exceeding five years if the offence is committed by a minimum of three people.

Salesman asked to work as cleaner
Q: I am a salesman in an electrical showroom. My manager is asking me to clean the store daily since the cleaning boy is on vacation. Does my employer have a right to ask me to work as a cleaning boy of the store when I am working as electrician in the company?           AD, Doha

A: Article 45 of the Labour Law stipulates that the employer may not ask the worker to carry out work other than that he was employed for, except where required for health and safety reasons or where the employee agrees to do so for a temporary period provided the employee receives at least the same wage and the temporary work is not demeaning.

- Please send your questions by e-mail to: leges@qatar.net.qa (Mobile:55813105)


LEGAL SYSTEM IN QATAR
A creditor of the company may apply for the adjudication of bankruptcy although he is a partner therein. However, partners who are not creditors may not apply in their individual capacity for the adjudication of bankruptcy.
According to Article 722, the manager, chairperson or liquidator of a company may not apply for declaration of bankruptcy of a company, except after obtaining permission from the majority of the partners in general partnerships and limited partnerships, and from an extraordinary general meeting or meeting of partners in other companies. The report on the declaration of bankruptcy must include the names of the current partners and those who have left the company after suspension of payment together with the domicile and nationality of every partner and the date of publication of withdrawal of each partner from the company in the commercial register.
As per Article 723, the court may, ex proprio motu or pursuant to the request of the company or the public prosecution, postpone the declaration of bankruptcy of a company for a period determined by the court if it is probable that its financial position is likely to be consolidated or if the interest of the national economy so requires. In this case the court will order that appropriate measures be taken to safeguard the company’s assets.
The legal representative of a company which is declared bankrupt shall subrogate the company in every matter in which the law requires the opinion of the bankrupt or his presence. The legal representative shall appear before the adjudicator or the receiver whenever summoned and shall provide all information and clarifications required therefrom.
According to Article 725, the receiver may, after securing the permission of the adjudicator, claim against the partners for payment of the outstanding balances of their shares even before maturity. The adjudicator may limit such claim to the extent required to settle the debts of the company. Debentures issued by the company shall not be subject to the debt verification procedure. Such debentures shall be accepted in the bankruptcy at their nominal value after deduction of such amount of the value as the company has paid.
As per Article 727, if a company is declared bankrupt, all the general partners therein and those who have left the company after it ceases making payments shall be declared bankrupt provided that a period of not more two years has elapsed from the date of publication of withdrawal of such partner in the Commercial Register. The court shall declare the bankruptcy of the company and its partners in a single judgment and the adjudicator of the company shall be the same adjudicator for the partners. Nevertheless, each bankruptcy shall be independent of any other bankruptcy in terms of administration, debt verification and mode of termination thereof.
The estate of the company’s bankruptcy shall comprise its assets including the shares of the partners and its liabilities shall only include the rights of its creditors. However, the bankruptcy estate of a partner shall consist of his personal assets and the liabilities shall include the rights of his creditors and the creditors of the company.