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Al-Ahram Weekly 22 - 28 July 1999 Issue No. 439 
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Published in Cairo by AL-AHRAM established in 1875 |
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Al-Ahram Weekly 22 - 28 July 1999 Issue No. 439
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| Published in Cairo by AL-AHRAM established in 1875 |
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Egypt Region International Economy Opinion Culture Profile Features Focus Interview Travel Living Sports Time Out Chronicles People Cartoons Letters Court rules on confusing cheques
By Mona El-Fiqi
After a long debate, a high committee of the Court of Cassation has decided that the new Commerce Law No. 17 should be effective from 17 May, the date it was issued.
Following approval of the law by the People's Assembly, many interested parties were confused about when it would go into effect.
It was mentioned in the text of the law that it was to go into effect next October, with the exception of its provisions pertaining to cheques, which were not to be implemented until October, 2000.
As a consequence, commercial relations in Egypt are still being judged in the courts according to the old commerce law of 1883.
However, a few courts have already applied the new law, and have found some persons innocent of charges brought in lawsuits related to non-official cheques (which are sold in stationary shops and not issued by banks).
The judges' point of view is that the Penal Code states that the law which is in the best interest of the accused should be applied. For this reason, they have resorted to the new law before its implementation date.
Although the old law stipulates compulsory application of a penalty of imprisonment for a person writing worthless "non-official" cheques, the new law makes this penalty optional. Furthermore, the new law states that the penalty may be either imprisonment or a fine, according to the judge's discretion.
Moreover, the new law also eases the penalty to be imposed on a defendant who wrote a non-official cheque by allowing cancellation of the lawsuit if the accused pays the money to his creditor, even after the court's judgment.
These court judgments have upset all creditors who are holding unpaid cheques. They pose the question, 'according to which law will lawsuits pertaining to cheques be judged in the courts?'
The case has been submitted to the Supreme Constitutional Court where it is hoped this question will be answered.
In the meantime, a high committee of the Court of Cassation met to find a unified system in the courts to handle lawsuits pertaining to cheques. The problem arises because some judges are still applying the old law, believing that the provisions pertaining to cheques in the new law should not be implemented before October, 2000.
The committee meeting, which was headed by the vice-president of the Court of Cassation and attended by 11 senior counsellors, issued a decree that penalises the issuance of worthless cheques (banking cheques and non-official written cheques alike). In addition, the decree stated that the courts should apply the new law from its date of enactment because this is in the best interests of the accused.
Mahmoud Fahmi, attorney-at-law and former chairman of the Capital Markets Authority, explained that although it was mentioned in the third article of the law that it will be enforced on 1 October, 1999, with the exception of the provision on cheques, the committee decided that the law should be applied from its date of issuance. Therefore, all courts have to apply the new law now.
The third article is in line with Article No. 188 of the Constitution, which states that every law should go into effect a month after its publication in the official gazette, unless another date is specified in the law for its application, according to Fahmi. Egyptian jurisprudence gives legislators the right to determine when a new law should be applied
Commenting on the new law, Fahmi said, "By creating a high-calibre legal framework, the new law restores the dignity of the cheque as a tool of payment and not of credit, as it used to be in the past."
But on the other hand, the new law destroys this powerful framework when it eases the penalty (compulsory imprisonment) for issuers of non-official written cheques, he asserted.
In an attempt to resolve this problem, in its decree the committee of the Court of Cassation decided that the penalty of imprisonment should be compulsory for issuers of bad banking cheques and non-official cheques.
According to Fahmi, the new commerce law should have included a clear statement as to the date of its implementation to avoid the kind of controversy which has resulted from the ambiguity of some of its articles.
Moreover, he said the wording of the new law lacks the clear statements necessary to help people understand it.
It is expected that the Supreme Constitutional Court will consider the decree by the Court of Cassation committee final, Fahmi said.
