By: Rana Elbashir – Legal Researcher
The Official Gazette dated March 7, 2024, published Law No. 1 of 2024 amending provisions of Law No. 26 of 2007 promulgating the Commercial Law (“Amendment”). Adopting the approach of some neighbouring jurisdictions, drawee banks in Qatar are now required to effect the partial payment of cheques on demand.
Pursuant to the Amendment, Article 585 of the Commercial Law has been replaced by the following text:
“If the consideration for payment is less than the amount of the cheque, the drawee shall partially pay [the cheque holder] to the extent in his possession, unless the holder refuses. The drawee shall, in the event of partial payment, make a note of each partial payment instance on the back of the cheque to that effect, and give the holder the original cheque and a certificate of such [partial] payment. The holder has the right of recourse in respect of the remaining [unpaid] amount on the basis of the certificate and the original of the cheque marked thereon.”
According to the Amendment, when there are insufficient funds in a payer’s account to cover the full amount of a cheque, banks must make partial payment to a cheque holder from the available funds in a payer’s bank account. The drawee bank must then mark the back of the cheque with language stipulating the amount partially paid and must issue a certificate to the cheque holder certifying such partial payment.
Nonetheless, the cheque holder has the option to decline receiving partial payment. Interestingly, although the Amendment provides for the cheque holder’s right to refuse partial payment, it does not require drawee banks to proactively confirm a payer’s refusal of partial payment. This suggests that the cheque holder’s consent to receive partial payment is presumed unless they communicate otherwise.
The Amendment enters into force on April 6, 2024. Given the authority of the Qatar Central Bank (“QCB”) in regulating banks, we expect there to be circulars or guidelines issued setting out the means of practically implementing the Amendment. For example, guidance on the satisfactory language of the certificate to be issued to cheque holders, and whether QCB will set a minimum amount for the partial payment to be processed, will eventually need to be addressed.
It is important to highlight that partial payment of the cheque does not alter the position with respect to a payer’s criminal liability for bounced cheques.
