ESTABLISHING COMPANY IN DUBAI

ESTABLISHING A COMPANY IN DUBAI: DO YOU NEED A LAWYER?

Dubai, being once known as a desert city and now a city of endless possibilities, is undeniably, extravagant and promising.

Its emergence as a commercial hub over the last 15 years has been way too rapid that it is now among the easiest and fastest to set up a business globally.

Launching a business in the region, whether branching off an existing company as part of a geographic expansion strategy or starting out a completely new different enterprise can be as fast as a flash.

In a week or so, you will be able to get your business ready with just a few ‘must-do’ and ‘must-considered’ steps.

First, you must identify the correct type of your venture. This will determine the category of your business license, which will be reflected in the trading name.

Second, the activity your business covers also defines your business structure and type of license.

Third, most of the Expats who are having a 100% ownership of the company, establish their business in a Free zone Authority where minimum official procedure and duration is needed; hence the process is comparatively straightforward.

Setting up a business in Mainland Dubai, on the other hand, requires a trade license from the Dubai Economic Department. This license requires you to have a partnership with a UAE national, who has to compulsory hold at least 51% of the total equity of the company.

Lastly, you must consult with a legal counsel in Dubai UAE to have all your legal documents (Memorandum of Association) assessed. When organizing a business, nothing is as vital as priming your paperwork as this will determine whether your company will operate in terms of profit or loss.

From business opportunities to enterprises in all sizes clearly manifest the rise of Dubai, from a desert city to a city of endless possibilities.

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ACQUIRING AN ASSET IN THE UAE

ACQUIRING AN ASSET IN THE UAE: THE LAWS AND THE PROCESS

Over time, the law has been eased in permitting expats to acquire properties in the city.

As Dubai is a progressing city, everything is possible, including ownership of non-UAE nationals to various assets. This out-turns into a high property demand at a higher price, after which the problems of the market in 2008.

What was once an intricate is now an easy process for foreign investors to buy an asset in this city. As per UAE law, by simply paying 10% to 15% deposit with the balance payable over a certain period, you will be able to acquire an off-plan property from a developer. As easy as it may sound, you must make sure that the developer you will deal with is registered in the Dubai Land Department and that all payments will be rendered under an escrow account. You must also completely comprehend all the legal documents that you have to sign. If in doubt, you can always ask, verify, and confirm.

Aside from a developer, you can also deal with a Real Estate Company or through a brokerage.  The Real Estate Regulatory Agency, known as RERA will help you verify if your broker is listed with them. RERA is a government agency that controls and legalizes the real estate sector in the city.

Lastly, you must have the Sale and Purchase Agreement or SPA. This serves as your legal contract. This entails your undertaking to buy and your seller to sell the asset.

As you are purchasing an off-plan property, the completion of the project, the actual sum of all the payments, even the penalties in the event of breach of contract, as well as the courts certified to hear any cases and disputes in case of any issues, should all be outlined and recognized in your contract.

Owning an asset is everybody’s accomplishment. In this fast-paced world, this is among the many ways how to measure someone’s success. Purchasing a property is one of the biggest decisions one can make in his life; hence, if needed, don’t hesitate to seek assistance from a professional legal counsel in UAE.

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One Day Court

ONE DAY COURT MISDEAMENOR

Type of Cases Handled in “ONE DAY COURT MISDEAMENOR” in Dubai UAE

Being well-known as one of the most dynamic and fastest growing city in the world, Dubai has launched its initiative.

In a meeting held on the 7th March 2017 at the Dubai Executive Council head office, located in Emirates Tower, the Penal Order Law No 1 of 2017, also known as the ‘One Day Misdemeanor Court’ was finally approved by His Highness Shaikh Mohammed Bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai.

Following the said approval, the initiative was instantaneously executed in all police stations in Dubai on the 8th March 2017.

While there are many perceptions about this project, Shaikh Mohammed Bin Rashid Al Maktoum underlined that this guarantees people the right to fair trials and justice in a timely manner without compromising the veracity of law. To come up with a highly efficient and fast service from the long and difficult process is what ‘One Day Misdemeanor Court’ eyes on achieving.

Shaikh Mohammad also highlighted that with the judicial system UAE holds, justice, being at the heart of every society is being given equally to both individuals and organizations.

The whole process of Court proceedings such as investigation and prosecution will be shortened by 60% of the current estimated turn-around time; hence, a conclusion will be able to carry out faster than expected – in less than 24 hours, saving the government around 40 million dirhams in a year.

In total, 21 types of cases are included in this 24-hour system.  All of which will be heard in the Police Station with the prosecution and court on site. This strategy lets the Public Prosecution to immediately cope with the other certain cases, without referring them to the court through a penal order; hence making the whole process efficient and effective.

Some of the cases are as follows: 1. Illegal entry into the country, Returning after deportation, and Staying in the country illegally to be handled by the General Directorate of Residency; 2. Possession of alcoholic beverages, Consuming alcoholic beverages, and Giving a cheque with malicious intent to be handled by the Police Station; and 3. Involvement in an accident that injured someone, Wrecking properties, and Drinking and driving to be handled by the Traffic Prosecution.

Meanwhile, the Traffic Department, together with the Residency and Foreign Affairs, has primarily tested this “One Day Court Misdemeanor” in 2015.

Dr. Naser Muhyealdeen, Partner and Senior Lawyer of Hassan Al Reyami Advocates and Muhyealdeen International Legal Consultants has warmly expressed his support in this most recent initiative.

In Dubai, being successful and flourishing when it comes to business, time is indeed an essential element, Muhyealdeen added.

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Compensation Claim

How to Claim Compensation if you are a Victim of a Criminal Case.

Know the procedure on how to Claim Compensation if you are a Victim of a Criminal Case.

Many individuals who have suffered from a criminal act are oblivious of their rights to seek financial compensation for loss of potential gains and incurred damages caused by the offense. Furthermore, in most criminal cases, the victim is unaware that the monetary penalty imposed on the accused during a criminal proceeding is to be paid to the court and not to the victim. This means that unless the victim files a separate civil lawsuit to claim compensation from the accused, he will not be able to receive any payment for the damages resulting from the offense.

In the United Arab Emirates, victims of criminal offenses are given the right to seek financial recompense for a criminal offense. According to the UAE Civil Law, the financial compensation can be demanded by the victim regardless of the nature of the offense – whether it be financial, physical and so on.

When an individual becomes a victim of any criminal conduct, this is reckoned to be a distressing situation that could affect the individual’s well-being. The effect is not always a financial loss. However, being recompensed financially can still help the victim recover from the situation and remedy the out-turn of the crime that has been inflicted on him. Furthermore, it can also be a way of seeking justice and getting a closure.

The Criminal Procedure in the UAE gives the victims of any form of crimes a legitimate prerogative to claim compensation. A civil claim given to the victim will be decided by the criminal courts during the criminal procedure prior to the judgment of the First Instance Criminal Court which hears civil cases. This too protects the constitutional rights of suspects and defendants to ensure all stages of investigation, arrest, trial and sentencing are conducted indiscriminately. The limit to the amount that can be claimed depends on the discretion of the courts.

In addition, if the victim holds an insurance policy, the insurer or the insurance company has the right to file a financial claim before the criminal courts throughout the litigation. This is determined by the damages done by the crime.

There are three anticipated circumstances that the criminal courts decide on the civil claim raised within the criminal trial. If the suspect is found guilty, it will be the court’s discretion to grant the full or partial compensation amount. In cases where the compensation amount demands a tedious process such that further investigation is required to assess the situation, the courts have the right to decide on the suspect’s verdict and consequently refer the civil claim to the Civil Courts. Lastly, the Criminal Courts would dismiss the criminal allegations if the suspect is found innocent. This can also be the decision if the case is merely a civil dispute. In such an event, the case will be referred to the civil courts. There is also a probability that the courts will disapprove the compensation.

Some of the questions relating to this subject that need to be addressed are the following:

  1. Question: When is the best time to file a civil case – before the Civil Courts now or before the Criminal Courts?

 

Answer: There is no single answer to this question as the matter will always be affected by the nature of the offense, but considering practicality, it is advisable for the accused to file the case first in the Criminal Courts. Doing so will give the victim and his lawyer the rights to participate and attend the hearings in the First Instance Courts and to file a complaint for appeal should the accusation of crime be dismissed.

 

  1. Question: Will a “Not-Guilty” verdict on a criminal case automatically cause the dismissal of the civil case filed?

 

Answer: Criminal cases may be dismissed due to insufficient evidences or absence of breach of the criminal law. The accused is then given a “Not-Guilty” verdict. However, the civil case will not be automatically dismissed if there is a valid claim in the civil courts. The basis can be a tortious liability whereby a person’s rights are violated. The other basis is a contractual liability where a risk is assumed on behalf of another party as a result of a contractual agreement.

The civil case may be dropped by the victim any time during the legal process.

Disclaimer: This article focuses on general legal information extracted from the UAE Criminal Procedures Federal Law No. (35) Of the Year 1992 and from the experiences of Al Reyami Advocates & Muhyealdeen International Legal Consultants. Thus, any information provided herein is only a general advice or a set of guidelines. This article must neither take the place of a legal counsel from a professional legal service provider nor keep the reader from seeking legal advice, initiating a legal proceeding or suspending an ongoing case.

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Bounced Cheque Dubai UAE Law

Is Bounced Cheque a Criminal Case in UAE?

A bounced cheque which is also known as a dishonored or returned cheque is a non-sufficient funds cheque that cannot be processed because of the following reasons:

  • There is not enough money in the account of the drawer on the date the cheque was issued.
  • The bank account had closed prior to the encashment of the cheque.
  • There is a technical problem such as a mismatch in the signature on the cheque and the signature in the bank’s records.
  • The account holder instructed the bank to hold the payment.

The UAE has its set of repercussions for cases of bounced cheques and criminal charges are strictly imposed on people who present a cheque with insufficient funds or with full knowledge that it will not be cleared.

According to Article 632 of the Commercial Transaction Law, in the event of a default in the processing of a cheque due to any of the reasons stated above, a period of 3 days may be given to the cheque bearer to contact the drawer for the possibility of funding the cheque. Should the drawer be unavailable for communication within the given period, the drawee or cheque bearer has the right to take legal action. In such a case, the drawee can file a criminal complaint about the bounced cheque along with a civil case for the recovery of the cheque amount. The civil case will provide the drawee with an assurance that the amount denied will be recovered.

The process of filing a legal case against a drawer can go through several stages and the ramifications of a dishonored cheque may vary depending on the response of the drawer and the evidences provided.

  1. Police Authority

A complaint on a bounced cheque may be initially reported to the nearest police station located in the concerned Emirate. This requires presentation of relevant documents and evidences. The police authority will automatically issue a warrant of arrest against the drawer. The drawer can respond by settling the case or submitting his passport so that further time may be given for him to provide the amount required. The warrant can be withdrawn after the drawer clears the matter or serves the jail time prescribed.

  1. Public Prosecutor

The case will be forwarded to the Public Prosecutor for further investigations if the parties fail to resolve it at the police station. A report shall be prepared based on the proof provided. To give security to the drawee, the prosecutors can either hold the passport of the drawer or the guarantor or require a payment corresponding to the estimated amount of the cheque. The drawer will be kept in custody until the issuance of the final decision if the bail is denied.

  1. Criminal Court

At the criminal court, the drawer may be convicted based on the evidence provided by the drawee. According to Article 401 of the UAE Penal Code, the punishment can either be a fine ranging from AED 1,000 up to AED 30,000 or imprisonment from one to three years.

There have been recent advancements where the government has stipulated laws to address small claims or petty offences. Such laws, enacted through the “One-day court”, allow small cases of bounced cheques to be given a decision within 24 hours and resolved with a detention sentence. This is now in force in Abu Dhabi, Dubai and Ras Al Khaimah and the effectivity in reducing the number of cases processed at the Criminal Courts has been observed. As a result, serious cases have better chances of getting resolved faster as the Criminal Courts now have enough time to deal with them.

In addition, Dubai has come up with a law on “Criminal Orders”, which allows the Public Prosecution to resolve “simple violations” with monetary penalty. The matter will only be transferred to Criminal Courts if there is an objection to the sentence issued and the objection is documented within 7 days of the issuance of the verdict.

An issued cheque worth AED 200,000 and below is classified as a simple offence and will be given a penalty of about AED 5,000 – AED 10,000. This is not punishable by imprisonment in Dubai. Thus, lawyers often advise their clients that when receiving cheques, it would be better if they require an amount higher than AED 200,000 so that in the event of a dishonored cheque, the drawer will be bound to face imprisonment. With such possible punishment, there will be a lesser chance of the drawer not funding the cheque.

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filing theft case in dubai uae

Filing a Theft case in UAE

How to file a Theft case if you are in Dubai UAE?

Theft is a type of crime that is committed when a movable property is taken permanently from its owner without his or her consent. This involves the acts of stealing a movable property, obtaining goods through pretentious methods or accepting property that was stolen by another person.

According to Federal Law Number FEDERAL LAW NO. 3 of 1987, anything that can be taken under custody is considered a property. Hence, stealing goods from shops, breaking into private places to steal items or embezzling money are all considered theft.

If theft is committed within the UAE, the provisions of Federal Law Number 3 of 1987 of the UAE Penal Code are applied.

Types of Theft

The two categories of theft defined in the UAE Penal Code are aggravated theft and simple theft.

Theft crimes are classified as either “aggravated” or “simple” based on two main factors namely mental intent (“mens rea”) and criminal act (“actus reus”). However, the involuntary possession of stolen goods can also be considered as theft.

Articles 381 to 398 of the Penal Code provide the details of the punishments regarding these types of theft.

Simple theft is a misdemeanor that can lead to a minimum of 1 year imprisonment and/or monetary penalty. It is often categorized based on the place where the crime is committed, how the crime was done or who the victim is. Some cases of simple theft are those committed…

  1. In one of the worship places.
  2. In one of the inhabited or habitable places or its annexes.
  3. In one of the transport means or in a station, harbor or airport.
  4. Through climbing over the fence, breaking from outside, use of duplicated or genuine keys without their owners’ consent.
  5. By a person impersonating a public attribute or pretending that he is performing or in charge of a public service.
  6. By two or more people.
  7. On a wounded person during wartime.
  8. On property owned by a public authority and employees of ministries and government departments.
  9. On cattle or on carrying or riding animals.

 

Other circumstances of simple theft not falling under the above categories include:

  1. Interruption of information transmission or provision of any government service such as the misuse of telecommunication services or the removal of the power source of any device used to carry out such services.
  2. Use of vehicles such as cars or scooters belonging to another person without his or her consent. The corresponding punishment for such act would be a minimum of one year jail time and a fine not exceeding AED 10,000.
  3. Coercing a person to sign or cancel an agreement or a deed.

Aggravated Theft

Aggravated theft involves the use of deadly weapons and refers to acts that lead to felony such as murder.

For example, a person commits aggravated theft when he or she uses weapons and threats to force another person to surrender his or her property. Other cases are when a person falsely presents himself or herself as a public service agent, illegally enters a private property or engages in any other unlawful method to obtain a property belonging to another person.

Perpetrators of aggravated theft will face imprisonment and the duration varies depending on the type of crime committed. Some examples are given below:

  1. Maximum of 15 years imprisonment:
    • Use of weapons resulting in an injured victim
  2. 2 to 7 years or life imprisonment
    • Theft committed during the night
    • Use of arms
  3. 5 to 7 years imprisonment
    • Theft done by an employee during the term of his or her employment
  4. Life imprisonment
    • Involvement of 2 or more individuals

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B2B Dispute dubai UAE

How to resolve Business to Business Dispute in Dubai UAE. Know the Legal Process

How to resolve Business to Business Dispute in Dubai UAE. Know the Legal Process

The Business Protection Department (BPD) is a newly established branch of the Department of Economic Development (DED) of Dubai, dedicated to resolving commercial disputes in the UAE. It was set up in answer to the growing need for a suitable method of assisting businesses with facing commercial issues raised against each other and arriving at an amicable settlement. This is a concern that cannot be overlooked as commercial disputes do not fall within the purview of the present dispute resolution authority, the Commercial Control and Consumer Protection Department (CCCPD), resulting in the aggravation of supposedly trivial matters arising among businesses.

The responsibilities of BPD are the provision of a “National Dispute Settlement Service” in Dubai and the dissemination of educational information to businesses.

As a dispute settlement service provider, BPD attends to the complaints of entities holding a Dubai business license. As an educational authority, BPD organizes workshops and conferences and even distribute literature to increase business literacy among Dubai-licensed entities.

BPD’s Jurisdiction

Being a sub-department of CCCPD, the jurisdiction of BPD is limited to disputes between businesses licensed in Dubai and having a minimum capital of AED 200,000/- and its only objective is to assist the Dubai Courts. Thus, it is considered as an Informal Resolution Body.

In line with this, BPD can mediate between international traders if they have a DED license or branch license in Dubai UAE.

Furthermore, the disputes addressed by BPD are only those relating to commercial concerns. Hence, disputes on insurance, banking, real estate or labor matters are not included.

Lastly, BPD does not serve as a tribunal as it was established to mediate between businesses licensed in Dubai in order for them arrive at acceptable agreements.

Procedure for Filing Complaint

There are three ways companies with a DED license or their representatives can file a complaint with BPD – through email, through calls or manually by visiting a DED branch of CCCPD. Supporting documents must be provided and a non-refundable fee of AED 2,020/- must be paid.

Once the complaint received, it will be reviewed by BPD lawyers who will determine if the case filed is within the jurisdiction of BPD. BPD lawyers will also assess if the dispute can be resolved by BPD acting as a mediator or referring the matter to another suitable authority.

Should the complaint be found acceptable by BPD arbitrators, the concerned persons will be contacted for the initial conference which can be conducted through phone call or a personal meeting. It is important to note that the parties are not required to be present in Dubai at the time of the Mediation Conference.

The processing time for case resolution is ten business working days, but there could be an extension based on the requirements and exigencies of the case.

Judgments and Appeals

Decisions made by BPD are final and cannot be revoked or amended by filing an appeal. However, the parties are not restricted by these decisions as they are discretionary and not binding. Both parties have the option to bring the matter before relevant judicial authorities.

The method of resolving disputes applied by BPD can be considered as necessary approach rather than a formal procedure. Reliable technical knowledge and an adept understanding of the disputes are the basis of the decisions passed. Furthermore, since the time of its establishment, BPD has successfully handled cases, but precedents are not involved in the decisions passed.

For businesses engaged in commercial activities, DED still remains as the main licensing authority in Dubai. BPD is a sub-department with the capacity to block or temporarily suspend the license of entities registered with DED. BPD also has the authority to impose penalties including fines on parties should they fail to attend a mediation conference or comply with the decisions passed by BPD after their acceptance of the mediation process.

Businesses can seek the help and advice of lawyers in Dubai UAE for a better understanding of the roles, jurisdiction and processes of BPD.

Bail and Guarantee in the UAE

Understanding Bail and Guarantee in the UAE

Understanding Bail and Guarantee in the UAE

Bail is defined as a set of pre-trial restrictions that are imposed against a person to ensure that he will comply with a judicial process. It is a conditional release with a promise to appear before the court when required to do so.

In the UAE, the bail may be in the form of a financial guarantee or personal guarantee. A financial guarantee is the simplest form of bail as it refers to the payment of a certain amount for temporary release, while the personal guarantee is a concept by which a person or an entity certifies the compliance of the accused with any court process. It is widely known that a breach of the conditions of the bail will forfeit the financial guarantee in favor of the government, but what about the personal guarantee?

In this jurisdiction, a personal guarantee is a guarantee of a third person, or in rare cases an entity, like the accused’s employer or consulate.

Upon the Court’s order, both the accused and the guarantor (if a personal guarantee is a third person) will sign the Bail Bond which will include the charge against the accused, the accused and the guarantor’s personal details, the penalty due in case of violation and the undertaking statement. The undertaking statement will normally include the statements 1) that the guarantor will be liable for the accused’s attendance in court, on the execution of the judgment and 2) that the guarantor accepts the liability as regards the aggrieved party, including any penalties, compensation and subsequent civil action.

The above-mentioned liability of the guarantor will only be terminated 1) once the judgment is executed against the accused, or 2) the accused is completely and irrevocably exonerated from the charge.

Gleaning from the above rules and procedure, the guarantor’s liability appears to be equal to that of the accused, hence, anyone who plans to act as one should be fully aware of his role and the conditions set in the Bail Bond and the Guarantee Bond.

 

 

time-bars uae law

Time-bars on claims and causes of action under UAE Law

Time-bars, time-limits, prescription or in other jurisdictions, the statute of limitations, are legal time restrictions used to deter the enforcement of claims.

In the United Arab Emirates and similarly to other countries, these time limits are not provided in one specific statutory reference, nevertheless and generally speaking, civil claims have a 15 year prescription period from the time of its existence, except those that have shorter or longer time limits set by particular legislation.

The following are some of the prescriptive periods provided under various legislation in the United Arab Emirates:

  1. A civil claim or a right bring suit against a party shall not be admissible after the lapse of 15 years without legal excuse;
  2. After the lapse of 15 years, a claim for recovery of revenue against a holder in bad faith may not be heard without legal excuse;
  3. Claim for remuneration for work performed or expenses incurred in connection with the profession of physicians, pharmacists, lawyers, engineers, experts, professors, teachers, and brokers may lapse after 5 years without legal excuse;
  4. Unpaid taxes and fees are not recoverable after 5 years subject to the provision of special laws;
  5. After 2 years, the rights of merchant or manufacturer to recover payment for items they supplied shall lapse, as well as the right of hotel and restaurant owners against their clients in relation to the costs of accommodation and food. Workers servant and wage earners shall also have a 2-year prescriptive period to collect unpaid wages and costs of supplies provided to them;
  6. As to construction disputes, the employer has right to claim against the contractor or consultant within 10 years from the delivery of work, however, the case must be brought to court within 3 years after the discovery of the defect.
  7. For obligations arising out or in connection with commercial activities between traders, the time-bar is 10 years;
  8. The liability arising from a harmful act or a tortious act must be brought to court within 3 years. The harmful act may be from an overt action or omission in violation of a law or contract.
  9. The claim against air carrier and its related entities must be made within 2 years following the arrival of the plane, or the date the plane supposed to arrive or the day the carriage service was stopped.
  10. The UAE Marine Code also provided specific time limits for action relevant to the carriage and marine services; 1 year for charter party claims; 2 years for pilotage and towage claims; 2 years in marine collision claims; and 2 years for marine insurance claims.

There are other specific time-bars in other laws in the UAE and in each Emirates but the list above are the ones that are prevailing in the current time.

Take note however that time bars do not extinguished the liability or the claim but merely impedes a person from enforcing the same.

loan agreement

Are interest provisions in a loan agreement valid in the Arab Region?

The topics regarding loan interest rates and usury in relation to lending activities in the Middle East Region are in themselves a slippery slope area and must be approached with the necessary caution. Given this delicate issue, one would question: are interests on loans illegal in the Arab Region.

To answer the question, it is best to understand first the belief behind the subject. According to Islamic teachings, interest and usury are based on the concept of “riba”, which literally means “excess or addition”, and the same is outlawed under the Sharia Law as grounded on the principle that profiting from lending money is considered “haram” or forbidden.

In today’s modern society, the prohibition against interest is generally applied to loans between individuals.

On the other hand, lending activities between two companies or between a corporate entity and an individual may not be included in the ambit of the prohibition.

Under UAE Law, the civil courts shall be the final arbiter of controversies regarding the validity or invalidity of interest clauses in a loan agreement. This goes without saying that any creditor may institute a case to collect on a loan agreement but it is within the discretionary powers of the court to accept these provisions relating to interest, surcharges, and penalties.

Noteworthy as well is the fact that a specific UAE Law deals with the obligation to pay interest and penalties. Under UAE Federal Law No. (18) of 1993 or the Commercial Transactions Law: it is stated under “Art. 76: A creditor is entitled to receive interest on a commercial loan as per the rate of interest stipulated in the contract. If such rate is not stated in the contract, it shall be calculated according to the rate of interest currently in the market at the time of dealing, provided that it shall not exceed 12% until full settlement.” and “Art. 88: Where the commercial obligation is a sum of money which was known when the obligation arose and the debtor delays payment thereof, he shall be bound to pay to the creditors as compensation for the delay, the interest fixed in Articles (76) and (77), unless otherwise agreed.”

Given these particular provisions that explicitly provide legal bases for the collection of interest and surcharges, a creditor is assured that he is protected under relevant legislation.