UAE Corporate / Commercial LawFederal Decree by Law No. (50) of 2022 Concerning Promulgating the Commercial Transactions Law

Article (1) The provisions of this Law shall apply to merchants, as well as all commercial physical businesses or virtual businesses carried out on technological media or via modern means of technology, carried out by any person, even if not a merchant.

Article (1) The Commercial code attached herewith shall enter into force.

-- 3 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 4

Article (2) Federal Law No. (18) of 1993 promulgating the Commercial code, as amended, as well as any provision that contradicts or is in conflict with the provisions of the Commercial code attached herewith are hereby repealed. The rules, resolutions and regulations implementing Federal Law No. (18) of 1993 referred to above shall continue to be in force in so far as they do not conflict with the provisions of the Commercial code attached to this Decree-Law until the resolutions and regulations replacing them have been issued.

Article (3) Commercial matters regarding which specific Federal Laws are enacted shall be subject to the

-- 5 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 6 provisions of such Federal laws, and to the provisions hereof which do not contradict said Federal laws. Book One Trade in General Part One Commercial Activities, Merchants and Commercial Books Chapter One Commercial Activities

Article (3) The Minister of Economy shall issue the resolutions required for the implementation of the Commercial code attached herewith.

Article (4) Commercial activities are: 1. Activities carried out by a merchant in relation to his trade affairs; however, any activity carried out by a merchant is considered to be related to his trade unless otherwise proved; 2. Speculative activities carried out by a person, even if he is not a merchant, with the intent of realizing profit; 3. Activities which are specified by the Law to be commercial activities; and 4. Activities which are related to or facilitating a commercial business.

Article (4) This Decree Law shall be published in the Official Gazette and shall enter into force as of 2 January 2023. Mohammed bin Zayed Al Nahyan President of the United Arab Emirates Issued by us in the Presidential Palace - Abu Dhabi On: 7 Rabi Al-Awwal 1444 (AH) Corresponding to: 3 October 2022 (AD)

-- 4 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 5 COMMERCIAL CODE PRELIMINARY PART

Article (7) Activities which may be deemed to be analogous to the activities mentioned in the two preceding Articles, due to the similarity of their characteristics and objectives, shall be deemed commercial activities.

Article (9) Where a contract is commercial with regard to one party and civil to the other party, the provisions hereof shall apply to the obligations of both parties, unless the Law states

-- 9 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 10 otherwise or there is an agreement between the parties to the contrary.

Article (11) The following shall be deemed a merchant: 1. Any person who works in his own name and for his own account in commercial activities and has the due competence when taking on such activities as his occupation. 2. Any company which undertakes a commercial activity or has adopted one of the legal forms stipulated by the Commercial Companies Law, even if such an activity is of civil nature.

-- 10 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 11

Article (12) Any person who advertises to the public, by any means whatsoever, a business assets established by him for commerce shall be deemed a merchant, even if he does not take on Trade as his regular occupation.

Article (13) The capacity of merchant shall be established in respect of any person who practices Trade under a pseudonym or hidden behind the name of another person. The capacity of merchant shall also be established in respect of the person whose name is apparent.

Article (14) Any person who carries out a commercial activity, although prohibited under specific laws or regulations from practicing trade, shall be deemed a merchant and shall be governed by the provisions hereof.

Article (15) 1. The capacity of merchant shall not be established for the following categories: a. Ministries, federal government authorities and local government authorities; b. Public benefit organizations, associations and clubs; and c. Self-employed persons who do not engage in commercial activities. 2. Commercial activities carried out by the categories set out in Clause (1) above shall be governed by this Law, except for activities excluded by virtue of a specific statutory provision.

-- 11 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 12

Article (16) The capacity of merchant shall be established and shall be governed by the provisions of this Law, except for matters excluded by a particular provision, for: 1. Commercial companies established or owned by the Federal or Local Government or in which the Federal or Local Government are shareholders or an organization, authority, agency or company affiliated to any of them; and 2. Foreign companies' branches that practice a commercial activity in the State.

Article (17) Individuals who practice a simple vocation or small trade where they rely on their work to derive some form of profit to secure their living more than their reliance on a cash capital, shall not be governed by the duties of merchants, such as keeping commercial books or registering in the Commercial Register, nor shall they be governed by the provisions of bankruptcy and composition. The Ministry of Economy shall, in consultation with the competent authorities in the Emirates, determine the maximum number of individuals working with them and the capital of the small trade.

Article (18) 1. Any person who has attained (18) eighteen calendar years of age and is free of any legal impediment shall be competent to engage in trade. 2. A minor may - whether under guardianship or custody - engage in trade when he attains (15) fifteen calendar years of age, in accordance with the controls and conditions issued by a Cabinet resolution at the proposal of the Minister of Economy.

-- 12 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 13

Article (19) 1. Where a minor who has not attained (18) eighteen calendar years or interdicted person has funds in a trade, the court may order the withdrawal of his funds from said trade or to remain therein, as may best serve his interests. 2. If the court orders that the minor remains in the trade, it shall grant the person acting on his behalf an unlimited or restricted authorization to undertake all the activities required therefor. 3. The court may withdraw or restrict the authorization when justified, without prejudice to any rights acquired by a bona fide third party.

Article (21) Subject to the provisions of Article (22), the same provisions prescribed for a UAE-national woman who engages in trade as a profession shall apply to the engagement in trade as a

-- 13 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 14 profession by a non-national woman and her acquisition of the merchant capacity and the effects resulting therefrom, including the provisions related to the separation of estates between spouses.

Article (22) A non-national person may engage in trade according to the conditions, controls and within the limits and cases identified by a Cabinet resolution to be issued at the proposal of the Minister of Economy.

Article (24) 1. Any transactions undertaken by a merchant in connection with his trade shall not be accepted by any competent authority, unless such merchant is registered in the Commercial Register.

-- 14 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 15 2. A merchant who practices his commercial activities on technological media or via modern means of technology shall fulfil the requirements of the competent authorities on the registration in the Commercial Register. Chapter Three Commercial Books

Article (26) 1. All financial transactions carried out by the merchants as well as his personal money withdrawals shall be recorded in the general journal on daily basis. 2. The merchant may use auxiliary journals to record the details of his commercial transactions, in which case it shall be sufficient to record the total of such transactions in the general journal at regular intervals. Where such procedure is not followed, any auxiliary book shall be deemed a general ledger.

Article (27) The following shall be recorded in the general ledger: 1. All accounting transactions carried forward from the general journal as per the supporting documents thereof; in particular, the accounts related to cash on hand, bank, partners, creditors, debtors, revenues, withdrawals and expenses. 2. Particulars of goods remaining with the merchant at the end of the fiscal year or an overall statement thereof if the particulars are shown in separate books or statements. In this case, such books or statements shall be deemed complementary to the general ledger. 3. A copy of the annual balance sheet and the profit and loss account.

Article (31) Entries and incidents recorded in commercial books by the merchant's authorized employees shall be deemed as entries recorded by the merchant himself, and it shall be assumed that such entries were made with his knowledge and consent until he proves otherwise.

Article (32) The court may, sua sponte, or at the request of any litigant, order the merchant to submit his commercial books thereto to extract therefrom matters related to the dispute brought before such court. The court itself may review such books or through an expert appointed by it for such purpose.

Article (33) 1. The court may order the merchant to submit his commercial books for the perusal of his opposing party only if the dispute is related to a decedent's estate, partnership or the division of their joint property.

-- 18 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 19 2. In case of bankruptcy or composition, the commercial books shall be delivered to the competent court, the bankruptcy trustee or the composition magistrate.

Article (35) If either litigant merchant relies for the validity of his case on his opposing party's commercial books and he admits in advance that the data recorded therein are correct, and the opposing party refrains without justification from providing such books to the court for perusal, this shall be deemed a presumption that the facts required to be proved in the books are correct. The court may further administer suppletory oath to the plaintiff on the validity of his case. Part Two Business Assets, Trade Name, Unfair Competition, Trademarks and Commercial Data Chapter One Business Assets, Trade Name and Unfair Competition Section One Business Assets

Article (36) Business assets constitute a group of tangible and intangible property allocated for the practice of physical or virtual commercial activities, whether on technological media, via modern means of technology or using traditional methods.

Article (37) 1. Business assets shall cover elements necessary for the commercial activity. Such elements are divided into tangible elements, such as goods, equipment, machines, tools, and intangible elements, such as customer contacts, goodwill, trade name, right to lease and industrial and intellectual property and licenses.

-- 20 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 21 2. The tangible elements are not considered essential to the business assets, contrary to the intangible elements where the business assets have no existence unless one or more elements thereof are available.

Article (38) In the event where the merchant is the owner of the real property in which he practices his trade, such property may not be considered as an element of the business assets, and any provision to the contrary shall not be valid.

Article (40) 2. The title to the business assets shall be transferred as between the contracting parties and with regards to third parties only from the date on which the disposition is recorded in the commercial register and a summary thereof is published according to the procedures and time limits set out in the legislation in force in the State. 2. In case the business assets include elements that are subject to specific regulations for announcement or registration, the announcement made for the disposal of the business assets shall not replace the special announcement or registration, unless the Law provides for otherwise.

Article (42) 1. Any person to whom the ownership of the business assets devolves shall, under the Law, subrogate the person who disposed thereof in all the rights and obligations arising from the business assets, unless otherwise agreed or where the contract is entered into on basis of personal considerations. 2. Nevertheless, the second party to the contracts referred to in the previous paragraph may, within (90) ninety days from the date of announcing thereof, request the cancellation of such contracts provided that he has serious reasons to justify such cancellation and he notifies the new owner of his desire to cancel in a timely manner.

Article (44) Notwithstanding the bankruptcy provisions, the seller of business assets who did not receive the full price may invoke vis-à-vis the body of creditors in the buyer's bankruptcy his right to rescind the sale contract of the business assets and recover the same, or his right to lien if he reserved for himself such right and is expressly mentioned in the published contract summary. Nevertheless, such rescission, termination or lien shall take effect only against the elements included in the contract.

Article (45) 1. Business assets may be mortgaged only to banks and financing institutions. 2. Where the mortgage deed does not specify the elements covered by the mortgage, it shall

-- 24 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 25 then only cover the trade name, the right to lease, the customers' contacts and the goodwill.

Article (46) 1. A mortgage may not be put into effect except by an agreement notarized or attested by the Notary Public and registered in the commercial register. 2. A mortgage agreement shall contain a declaration by the debtor as to whether or not the seller has lien over the mortgaged business assets, as well as the name of the insurer of the store, if any.

Article (47) 1. The mortgage registration in the commercial register shall be sufficient to secure the lien for (5) five years from the date hereof, and the registration shall be deemed cancelled if it is not renewed within the said time limit. 2. The said registration shall be stricken off subject to the mutual consent of the parties concerned or under a final court judgment.

Article (48) A mortgagee shall be responsible for keeping the mortgaged business assets in good condition.

Article (50) Any provision in a mortgage agreement authorizing the creditor the right to own or dispose of the mortgaged property, without the procedures prescribed in Article (49) of this Law, shall be null and void.

Article (51) The seller and mortgagees shall have the same rights and privileges over the sums resulting from the insurance as those which they had over the insured items, provided that they have been established that such sums have matured.

Article (52) The lessor of the place wherein lies the mortgaged furniture and equipment being used for exploiting the business assets may not exercise his lien for more than two-year rent.

-- 26 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 27 Section Two Trade Name

Article (53) Subject to the provisions and requirements set forth in the legislation governing the protection of intellectual property, a trade name of an individual merchant shall consist of his given name and surname. The trade name may also contain particulars pertaining to the persons mentioned therein related to the type of trade for which it is designated and may also be novel. In all cases, the trade name must truly reflect the type of business and shall not be misleading or prejudicial to the public order or morals.

Article (54) Trade names of commercial companies shall be in compliance with the statutes in force in the State.

Article (55) Subject to the provisions and requirements set forth in the statutes governing the protection of intellectual property, a trade name shall be registered in the commercial register, pursuant to the provisions stipulated to that effect. Once registered, no other merchant may use such name for his trade which is of a similar kind. Where the name and surname of a merchant are similar to a trade name previously recorded in the commercial register, he shall add to his name such particulars as would distinguish him from the trade name already registered.

Article (56) 1. A merchant shall write his trade name on the facade of his physical or virtual business

-- 27 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 28 assets, and he shall carry out his commercial transactions under his trade name. 2. A merchant may not use a trade name of another merchant after expiry or removal of such name, except after the lapse of one year from the date of such expiry or removal.

Article (57) 1. A trade name may not be disposed of separately from the business assets allocated for such trade name, unless otherwise is provided by any other legislation. 2. However, in case the owner of the business assets disposes thereof, such disposition shall not include the trade name, unless it is explicitly or implicitly provided as such. 3. The person to whom the ownership of the business assets is transferred, excluding its trade name, shall not be liable for the obligations of his predecessor, unless there is an agreement to the contrary recorded in the commercial register.

Article (58) 1. A person to whom the title of such business assets is transferred may not use his predecessor's trade name, unless such name devolves unto him or the predecessor authorizes him to use it; provided that he adds to the name such particulars purporting to the transfer of ownership. 2. Any violation of the provisions of Clause (1) above shall be penalized by a fine of at least (AED 10,000) ten thousand dirhams.

Article (60) The below rules shall apply to the unfair competition, unless otherwise provided by any particular legislation.

Article (61) A merchant may not induce employees or workers of another competitor merchant to assist him in poaching the clients of that merchant or solicit them or encourage them to disclose the secrets of his competitor. The foregoing acts shall be considered unfair competition that renders him liable for compensation for damages.

Article (62) A merchant may not disclose such matters as are inconsistent with the reality regarding the origin or description of his goods, or any other matters pertaining to their nature or importance. He may not also declare falsely that he holds a rank, degree or award, nor may he resort to any other misleading means, with the intent thereby to usurp the customers of a competitor merchant, otherwise he shall be liable for compensation.

-- 29 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 30

Article (63) A merchant may neither resort to fraud and cheating methods to merchandise his goods, nor may he spread or publish false particulars prejudicial to the interests of another competitor merchant, otherwise he shall be liable for compensation.

Article (64) A merchant may not issue to an ex-employee or ex-worker a certificate that is inconsistent with reality, otherwise he shall be liable to compensate any other merchant who was misled by such certificate for damage so incurred.

Article (65) 1. Where a trade name is used by a merchant other than its owner without any agreement authorizing such use, or where the owner uses it in a manner violating the Law, the parties concerned may appeal the competent court to order the prohibition of its use and to remove it if it is recorded in the commercial register, without prejudice to their right, where appropriate, to compensation. 2. Any violation of the provisions of Clause (1) above shall be penalized by a fine of at least (AED 10,000) ten thousand dirhams.

Article (66) Any person engaged in the business of supplying information to commercial houses about the conditions of trade, who knowingly or through gross negligence supplies untrue statements about the behavior or financial standing of a merchant, shall be liable for compensating such damage which may arise therefrom.

-- 30 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 31

Article (67) The foregoing provisions may not prejudice the provisions of other Laws, concerning the commitment of the acts mentioned in such provisions. Chapter Two Trademarks and Commercial Data

Article (68) Trademarks and commercial data shall be regulated by specific laws to be enacted in this regard. Book Two Commercial Obligations and Contracts Part One Commercial Obligations

Article (69) 1. Where two or more individuals are owed a commercial debt, they shall be jointly liable for the repayment of such debt, unless otherwise provided by the Law or agreement. 2. The provision of Clause (1) above shall apply in case of multiple guarantors of a commercial debt, who shall be jointly liable with each other and with the debtor for the debt.

Article (70) A guarantee shall be commercial if the guarantor has guaranteed a debt which is deemed in

-- 31 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 32 regard to the debtor to be commercial, unless otherwise provided by the Law or agreement, or if the guarantor is a merchant and has an interest in guaranteeing the debt.

Article (71) Where a merchant carries out, for a third party, such business or services related to his commercial activities, he shall be deemed to have done so in return of a consideration, unless otherwise established. Such consideration shall be determined according to the custom, and in the absence of such custom, it shall be determined by the court.

Article (72) A creditor may receive an 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 prevailing in the market at the time of transaction, provided that it does not exceed (9%) up to the full repayment.

Article (73) Where the contract stipulates a rate of interest and the debtor delays the repayment, the delay interest shall be calculated on the basis of the agreed rate until full repayment.

Article (74) The interest shall be paid at the end of the year if the loan term one or more years, or on the maturity date of the debt if the loan period is less than one year, unless the commercial or banking practice requires otherwise.

-- 32 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 33

Article (75) Where the loan term is definite, the creditor shall not be bound to accept the repayment of debt prematurely, unless the debtor pays the interest which accrues for the remaining period of the loan term, save where both parties agree otherwise.

Article (76) Orders and authorizations issued by a merchant for matters related to his commercial activities shall not lapse upon his death. Nevertheless, his heirs may cancel the same if they decide to discontinue the trade, and in such a case, they shall not be deserving of any compensation if they notify, in good time, the person contracted with the testator of their desire of cancellation.

Article (77) 1. Where the commercial obligation is the delivery of a certain item within a specific season or a time of the year, the agreement between the two parties shall be the reference with respect to fixing the time for such delivery. In the absence of an agreement, then the time for delivery will be determined by the custom prevailing in the country where the delivery shall take place. 2. The custom prevailing in the country where the contract is concluded shall apply to the method of measuring, weighing or counting goods.

Article (78) A creditor may not be compelled to accept performance of a contract for a term that has been fixed, unless otherwise agreed.

-- 33 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 34

Article (79) Where the debt is deferred and the debtor offers to repay it before its maturity, he may not, upon the payment, deduct part of it without the creditor's consent, unless it is otherwise provided by the Law or agreement.

Article (80) Where either contracting party reserves the right to rescind the contract before the performance is commenced, such party shall forfeit his right of rescission if he performs his obligations under the contract or if he consents to the other party's performance of his obligations.

Article (81) Summons and notices on commercial matters shall be served through the Notary Public, by registered letter with acknowledgement of receipt or any electronic means or similar means of modern means of technology, as identified by a resolution of the Minister of Justice, or by any other method as agreed between the parties.

Article (82) Courts shall not grant a debtor, who is under a commercial obligation, a time limit for full payment or payment in installments except upon the creditor's consent or under general exceptional circumstances.

Article (83) Where the debtor repays a commercial debt to a person holding the instrument of such debt marked with clearance or to a person holding a clearance from the creditor, he shall be

-- 34 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 35 discharged from the debt.

Article (84) Where the commercial obligation is a sum of money that was a sum certain at the time the obligation was created and the debtor delays the repayment thereof, he shall be bound to pay the creditors as compensation for the delay the interest provided for in Articles (72) and (73), unless otherwise agreed.

Article (85) For the accrual of delay interest, it is not required that the creditor proves that he sustained damages caused by such delay.

Article (86) Interests for delay of repayment of commercial debts shall accrue from the maturity date of such debts, unless otherwise provided by the Law or agreement.

Article (87) 1. A creditor may claim complementary compensation to be added to the delay interest if he proves that the damages in excess of said interest is caused by the debtor's deception or serious error. 2. Where the creditor, when claiming this right, causes, in bad faith, the prolongation of the dispute period, the court may reduce the interest or it may not judge any interest at all for the period of the unjustified prolongation.

-- 35 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 36

Article (88) A creditor may not claim a compound interest, i.e. the interest on the frozen interests, or claim such interests as a complementary compensation.

Article (90) The possession by the debtor of the instrument of the debt shall constitute a presumption that

-- 36 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 37 he has been discharged of the debt, until otherwise established.

Article (91) Commercial obligations, whatever their amount, may be established by all means of evidence, unless otherwise provided by the Law or otherwise stipulated by the agreement.

Article (92) Where there is a denial and in the absence of a lawful excuse, cases related to merchants' obligations against each other shall be barred after the lapse of (5) five years from the date on which the performance of the obligation falls due, unless the law provides for a shorter period. Part Two Commercial Sale Chapter One General Provisions

Article (93) 1. The general provisions stipulated in this Chapter shall apply to commercial sales, unless otherwise provided. 2. A sale shall be commercial, pursuant to the provisions of this Chapter, if the sale is made between merchants and for commercial affairs.

Article (95) Where both contracting parties agree that the sale price shall be at the market rate, then the market price shall be the market price as on the date and place where the contract is concluded, unless otherwise stipulated in the agreement. In case of several market prices, then the average price shall prevail.

Article (96) The two contracting parties may agree to delegate a third party to fix the price of the item being sold. However, if such party fails to fix the price within the prescribed time limit or within a convenient time if no prescribed term was stipulated, then the current market price at the time and place where the contract is concluded shall be adopted.

Article (97) Where the price is estimated on the basis of weight, the net weight shall be considered, unless there is an agreement or custom to the contrary.

-- 38 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 39

Article (99) 1. Where a date is not fixed for delivery, the delivery shall be effected immediately upon conclusion of the contract, unless the nature of the item sold requires to be delivered on another date. 2. Where it is agreed that the buyer may fix the date for delivery of the item sold, the seller shall be bound to deliver it on such date, with due regard to the period required for the preparation of the sold item being dispatched for delivery and having regard to its nature.

Article (101) Any shortage occurs in the sold item upon its delivery shall not be taken into consideration if custom allows such shortage.

Article (103) Where the two contracting parties agree that the sold item is to be delivered in batches, the buyer may ask for the rescission of the contract if the seller fails to deliver any of the batches on the fixed date. However, such rescission shall not apply to the batches already delivered, except if the buyer sustains serious damage due to the division of the item sold.

Article (104) Where the buyer fails to pay the price on the date agreed upon, the seller may, after serving notice to the buyer, re-sell the goods. If the goods are sold, in good faith, at a price less than the price agreed upon, the seller may claim from the buyer the price difference. Furthermore, if the goods have a known price in the market, the seller may claim from the buyer the difference between the price agreed upon and the market price on the date fixed for payment of the price.

Article (105) 1. The buyer, who has paid the full price, may ask the seller to give him a list of goods showing that the price has been paid. 2. Any person who expressly or implicitly accepts a list of the sold goods shall be deemed as having agreed to its contents. Where the person receiving the list and does not object to its contents within (8) eight days from the date of receipt, this shall be considered as an implicit acceptance, unless a longer period is agreed.

-- 41 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 42

Article (106) 1. Where the buyer refuses to take delivery of the item sold, the seller may apply to the court to establish the status of the same and grant him permission to sell same under the court supervision after the lapse of a time limit fixed by it and notified to the buyer. However, the court may order that highly perishable items may be sold without delay and without notice. 2. The total value of the sale shall be deposited in the treasury of the court, after deducting therefrom all the expenses incurred by the seller until the dispute between him and the buyer is settled.

Article (109) 1. Where the item sold is a commodity protected by a registered trademark, it is permissible to agree that the buyer may not sell at a price less than a certain price. 2. The court may decide the non-compliance with this condition if it considers that the item sold is a necessary commodity. 3. The buyer's successors shall not be bound to comply with the above condition, except if they came to know or they could have known about it.

-- 43 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 44

Article (110) 1. It is permissible to agree in supply contracts, where the supplier grants certain privileges to the buyer, to prevent the latter from buying goods similar to the item sold from another supplier for a period not more than (5) five years from the date of agreement. Any agreement on a longer period shall be reduced to (5) five years. 2. The provisions of Item (1) above shall apply in so far as they do not contradict the provisions regulating competition, as set forth in the relevant legislation in the State. Chapter Two Certain Types of Commercial Sales Section One Sale by Installment

Article (111) The contract of a sale by installment shall be executed in two copies and shall state the particulars which identify and determine the item sold, as well as the price, the period and conditions of the installment. The seller shall give the buyer one copy of said contract.

Article (112) The installments shall be paid at the place of residence of the seller, as stated in the sale contract, unless otherwise agreed upon. Where the installments are collected at the buyer's place of residence, the seller may not charge any additional expenses. The clearance for any installment shall be clearance for all the previous installments, unless there is evidence to the contrary.

-- 44 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 45

Article (114) An agreement that the full price shall fall due, in case one of the installments is not paid on the maturity date, shall take effect only if the buyer fails to pay even though notice is served and (7) seven days have lapsed from the date of such notice.

Article (116) Where the third party's right is subsequent to the sale by installment contract, the condition related to the retention of ownership shall take effect to such third party if the said condition is made in writing in an agreement having a fixed date and prior to the execution proceedings undertaken by the creditors on the item sold.

Article (117) A buyer may not dispose of the item sold before he has paid all installments, save where the seller agrees to the same in writing. Any disposition by the buyer in violation of this provision shall not apply to the seller, unless the third party proves his good faith, in which case, the remaining installments shall fall due.

Article (118) The provisions of the preceding Articles regarding sales by installment shall apply even if the contracting parties have termed the sale as a lease. Section Two Optional Public Auction Sale of Movables

Article (119) 1. The provisions of this Section shall apply to optional sales by public auction of movables. 2. Sale by public auction shall mean any sale which any person may attend even if the auction is restricted to a specific group of persons.

-- 46 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 47 3. Movables shall mean all movables the possession thereof has transferred to any person by any ownership acquisition reason.

Article (122) Where the initial appraisal of the second-hand goods offered for sale at a public auction exceeds (AED 400,000) four hundred thousand dirhams, the appraisal expert shall publish the same according to the procedures and time limits mentioned in the resolutions issued by the Minister of Economy or in the legislation in force in the State. The announcement shall schedule a day prior to the sale for the inspection of goods offered.

Article (124) The owner of the used auction room or electronic platform or the appraisal expert, as the case may be, shall for the fee or commission to which he is entitled have a right of lien over the price of items he sells at public auction.

Article (128) Employees of the competent authority in the relevant Emirate shall have the right to monitor the implementation of the provisions of Articles (126) and (127) above. To that end, they may enter the commercial store which holds a permit to carry out closeout or sales, and to request the papers and documents pertaining to the operation, subject of the permit, and to record any breaches against the permit provisions.

Article (129) Any person violating the provisions of Articles (126), (127) and (128) above shall be penalized by a fine not exceeding (AED 40,000) forty thousand dirhams. In case of recidivism, a fine not exceeding (AED 60,000) sixty thousand dirhams shall be levied, and the violator may be prohibited from obtaining permits for sales for a period of (3) three years from the date on which he committed the violation.

-- 51 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 52 Section Four Certain Kinds of International Sales

Article (130) Parties may agree on the application of the rules governing international commercial sales issued by the International Chamber of Commerce, instead of the provisions set out in this Section.

Article (132) 1. The seller shall pack, secure and transport the item sold to the port of shipping and ship it onboard of the vessel designated by the buyer, on the specified date or within the time limit set for shipping. 2. The seller shall bear the expenses of loading and packing and the costs for inspecting, measuring, counting or weighing the item sold before shipping it.

-- 52 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 53 3. The seller shall, without delay, notify the buyer that the item sold has been shipped and shall dispatch to him the papers evidencing the same, and the buyer shall bear the costs of such notice and dispatch.

Article (133) 1. Where the item sold needs an export permit for it to be exported outside the State or any other governmental license, the seller shall obtain the same at his own expense. 2. The buyer shall undertake to obtain, at his own expense, the import permit and other documents required for this purpose. 3. The seller shall duly obtain a certificate of origin for the item sold and shall present it to the buyer, who shall bear the expenses related thereto, unless otherwise agreed upon.

Article (134) The seller shall provide such assistance as will be needed to enable the buyer to obtain the bill of lading and such other documents as required to be issued in the country of shipping of the item sold, in order to enable the buyer to import it or make its passage in transit through another state easier. The buyer shall bear the expenses incurred for the obtaining of such documents.

Article (135) The seller shall pay all the sums due in connection with the item sold, including the export charges and the shipping expenses up to the moment when the item sold crosses, during its shipping, the barrier of the vessel, as well as the liability for damage which may be suffered by the item sold until that stage. However, any sums due or damage sustained thereafter shall be borne by the buyer.

-- 53 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 54

Article (136) Where the arrival of the vessel, designated by the buyer for transporting the goods, is delayed beyond the expiry of the time limit set for shipping, or where the vessel departs the said port before expiry of the said time limit, or if the vessel is unable to ship the goods for a reason that cannot be attributed to the seller, the buyer shall be liable for the resulting additional costs and shall bear the consequences of the damage that may be sustained by the item sold from the expiry date of the time limit set for the shipping, provided that the item sold has been, on that date, designated per se.

Article (137) Where the buyer fails to notify the name of the vessel at good time or if he reserves the right to fix the date of delivery during a set time limit and he fails to do so or to designate the port of shipping but fails to issue specific instructions during such time limit, the buyer shall be liable for the resulting additional costs and shall bear the consequences of the damage that may be sustained by the item sold from the expiry of the date of notification or the time limit agreed upon to designate the date for delivery, provided that the item sold has been, on that date, designated per se.

Article (138) Where it is agreed that the item sold shall be delivered on the dock of the port of shipping where the vessel designated by the buyer is anchored, the sale shall be termed F.A.S. and such sale shall be governed by the provisions of the FOB sales, except for shipping the goods on board the vessel.

-- 54 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 55

Article (139) Cif Sale 1. A "CIF sale" is a sale concluded against a lump sum covering, in addition to the sold item price, the price of the item sold, the maritime insurance charges and freightage by vessel to the port of destination. 2. Goods shall be considered as having been delivered to the buyer upon completion of shipment by the vessel, and the liability for perishing of such goods shall from that moment be borne by the buyer. 3. Where the seller fails to provide insurance coverage, the sale shall be deemed a (C&F) sale.

Article (140) The seller shall conclude a transport contract for the goods with a reputable carrier, as per the usual conditions, and shall choose a suitable vessel to carry goods of the same type of the item sold. The seller shall further pay the freightage and any other sums which the carrier might stipulate to be paid at the port of shipping.

Article (142) 1. The seller shall be bound to pack the item sold and ship it on board the vessel within the time limit set for shipping, or within the period dictated by custom. The seller shall further bear the expenses of packing and the costs of inspection, measuring, weighing or counting the item sold as is required for its shipping. 2. The seller shall, without delay, notify the buyer of the name of the vessel and completion of shipping.

Article (143) 1. Shipping of the item sold by the seller shall be proved by means of a bill of lading where the word "shipment" is mentioned. However, if the bill of lading states "under shipment fee", the buyer may prove the shipping has not actually been taken place on the date mentioned in the bill. 2. Where the bill of lading contains a handwritten statement signed by the captain of the vessel, certifying that the goods were actually shipped on the specified date, the buyer in such a case may not prove the contrary vis-à-vis the seller.

Article (144) 1. The seller shall duly obtain a certificate of origin for the item sold and shall present it to the buyer, who shall bear the expenses related thereto, unless otherwise agreed upon. 2. The seller shall further provide such assistance as will be needed to enable the buyer to

-- 56 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 57 obtain the necessary documents issued in the country of shipping of the item sold, in order to facilitate its import or passage in transit through another country.

Article (145) 1. The seller shall pay the sums due in connection with the item sold, until its shipment on board the vessel, including export fees. 2. However, the buyer shall bear import fees and charges and expenses to clear the item sold at the port of discharge.

Article (146) The seller shall bear the consequences of the damage which may be sustained by the item sold, up to the moment when it crosses the barrier of the vessel. Such consequences shall thereafter pass on to the buyer.

Article (149) Where the vessel carrying the item sold arrives before the arrival of the documents or where the documents received are incomplete, the seller shall immediately, upon being informed of the same, carry out whatever action that may be necessary to enable the buyer to obtain a copy of the documents which have not arrived or to complete the incomplete documents. The

-- 58 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 59 seller shall bear the resulting expenses and any damages, where applicable.

Article (150) Without prejudice to the provisions of Article (108) above, the buyer shall receive the item sold upon its arrival at the port agreed upon, and the buyer shall bear such sums as will be due on the item sold during its transport and the expenses of discharge upon its arrival, save where the carrier has obtained such sums and expenses at the port of shipping or where it is agreed in the sale contract that they shall be borne by the seller (the sale being CIF until the discharge).

Article (151) Where the buyer reserves the right to fix a date for the shipping or to designate the port of discharge within a set time limit but he fails to issue specific instructions during such time limit, he shall be liable for any additional expenditure resulting therefrom and such damage as may be suffered by the item sold until the expiry of the time limit for shipping; provided that the item sold has been, on that date, designated per se.

Article (152) Where something contrary to the documents is detected and such contradiction does not exceed the limit allowed by custom, the buyer shall be bound to accept the same with a reduction of the price, as per the applicable custom at the port of destination.

Article (153) Arrival Sale A contract which contains such conditions as will render the seller liable for the perishing of

-- 59 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 60 the goods after shipment, or makes the performance of the contract conditional to the safe arrival of the vessel, or which vests in the buyer an option to accept the goods according to the contract or according to the pro-forma delivered to him at the time of contracting, shall neither be a CIF nor FOB sale, but shall be deemed to be a sale conditional to the delivery at the place of arrival.

Article (154) Sale at the Airport of Departure A sale at the airport of departure is one by which the goods sold are delivered at the airport of departure by placing them at the disposal of the air carrier designated by the buyer or chosen by the seller.

Article (155) 1. The seller shall, after entering into the contract, undertake to deliver the goods at the airport of departure to the air carrier or to its representative at the place and on the date agreed upon or at the place designated by the buyer, in accordance with the rules and practices applicable at the airport of departure. 2. The seller shall without delay notify the buyer that the delivery of the goods has been effected by any means of telecommunications or means of modern technology.

Article (157) 1. The seller shall pay all duties and taxes due on the goods as a result of their export. 2. The seller shall provide the buyer with all the documents needed for the receipt of goods which are readily available to the seller.

Article (158) Where the air carrier or the other person designated by the buyer refrains from receiving the goods at the airport of departure, or where the buyer fails to provide the seller, within a reasonable time, with the instructions required for the transportation of goods, the seller shall, as soon as possible, notify the buyer thereof.

Article (160) Where the air carrier or any other person designated by the buyer refrains from receiving the goods, the buyer shall bear all additional costs arising therefrom, as well as any damage that may be sustained by the goods, as of the date on which the goods have become ready for delivery; provided that the goods are allotted and designated per se.

Article (161) The sale contract in the above international sales shall be separate and may not affect the relations between the seller, the buyer and the carrier to the carriage contract, or between the buyer and the bank in the documentary credit contract. Part Three Commercial Mortgage

Article (162) 1. A commercial mortgage is a mortgage executed on a movable property to secure a commercial debt. 2. Except for the restrictions stipulated herein or in any other law, a commercial mortgage may be proved by all means of evidence with regard to the contracting parties and against third parties. 3. The application of the provisions of this Part shall be effected without prejudice to any

-- 62 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 63 particular legislation governing the commercial legislation.

Article (164) 1. Where the mortgaged item consists of registered instruments, the mortgage thereof shall be made in writing with a waiver of such instruments stating that they are made as a security. This shall be marked on the instrument itself and such waiver shall be recorded in the registers of the authority having issued the instrument. The rank of the mortgagee shall be determined as of the date of such registration. 2. As for promissory notes, the mortgage thereof shall be effected by an endorsement stating that the value is for mortgage, security or any other statement to that effect.

Article (165) 1. A debtor who is indebted with a commercial debt may garnish in favor of his creditor by a written instrument a debt owed to him by a third party. In this case, the debtor shall deliver to the judgment creditor the instrument establishing the said debt. 2. The garnishment of the debt shall take effect against the debtor on whose debt the garnishment was effected only by serving such garnishment upon him or by his acceptance thereof. In addition, it shall take effect against third parties only by the possession of the judgment creditor of the debt instrument. 3. The rank of the debt shall be determined as of the date of service or acceptance.

Article (166) A mortgagee shall take all the necessary measures to safeguard the mortgaged item and undertake the maintenance thereof. Where the mortgaged item is a negotiable instrument, the mortgagee shall on the maturity date carry out the proceedings necessary to protect the right established therein and collect it. The mortgagor shall pay all expenses incurred by the mortgagee in this regard.

-- 64 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 65

Article (167) A mortgagee shall use on behalf of the mortgagor all the rights and procedures relevant to the item mortgaged, as well as receiving its value, profits, interests and any other sums resulting therefrom. He shall however deduct the sums received from the value of the expenses incurred on behalf of the mortgagor, then from the interests and then from the principal sum secured by the mortgage, unless otherwise provided by the agreement.

Article (168) A mortgagee shall, when requested by the mortgagor, deliver to him a receipt showing the nature, type, amount, weight and other distinguishing features of the mortgaged item.

Article (169) 1. Where a mortgage is effected on a fungible item, it shall remain in place even if the mortgaged item has been replaced by another item of the same kind. 2. Where the mortgaged item is non-fungible, the mortgagor may replace it by another item; provided that the same is agreed on in the mortgage contract and that the mortgagor accepts the substitute, without prejudice to the rights of a bona fide third party.

Article (170) 1. Where the mortgagee fails to pay the secured debt on the maturity the debt, the mortgagor may, after the lapse of (7) seven days from the date of notifying the debtor of repayment, request the court to authorize him to sell the mortgaged item. The request shall be considered on an urgent basis, and the court shall decide the sale method. 2. The mortgagee shall, by exercising the lien, collect his debt, including the principal

-- 65 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 66 amount, interests and expenses paid in the course of claiming his debt, from the price generated from the sale.

Article (170) above. He shall collect the sums due to him from the proceeds of the sale and shall hand over the balance to the bailer or deposit such balance in the court treasury for the bailer's account. 2. The provision of Clause (1) above shall apply if the storage term is indefinite, and one year

-- 73 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 74 lapses and the bailer does not request to recover the goods or express his desire to continue in the warehousing contract.

Article (171) Where the mortgage is decided for several properties, the mortgagee may designate the property to be sold, unless otherwise agreed upon. In all cases, the sale may cover only the sum needed to clear the mortgagee's right, except where the item sold is indivisible.

Article (172) Where the market price of the mortgaged item decreases and becomes insufficient to secure the debt, the creditor may fix a suitable time limit for the mortgagor to complement the security. If the mortgagor refuses the same or where the fixed time limit expires and the mortgagor fails to complement the security, the creditor may cause the item mortgaged to be sold, even before the maturity date, by adopting the procedures stipulated in Article (170) above.

Article (173) Where the mortgaged property is perishable or is subject to deterioration or devaluation, or where its possession necessitates the incurring exorbitant expenses and the mortgagor is unwilling to replace it by another property, both the creditor and mortgagor may request the court to authorize him to sell it forthwith and determine the method of sale. The mortgage shall be transferred to the price generated from the sale.

-- 66 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 67

Article (174) 1. An agreement concluded at the time or after the establishment of a mortgage shall be null and void, and shall vest in the mortgagee, in the event that the debtor fails not repay the debt on the maturity date, the right to acquire or sell the mortgaged property, with no need to comply with the provisions and procedures set forth in Article (170) above. 2. Nevertheless, after the maturity of the whole debt or an installment thereof, the debtor may assign to the creditor the whole or part of the mortgaged property, so as to repay the debt or part thereof.

Article (175) Where the mortgaged item is an instrument and the nominal value of which has not been paid in full, the mortgagor shall, when claiming the unpaid portion, present to the mortgagee the sums of money needed to pay such portion, at least two days before the maturity date; otherwise, the creditor may sell the instrument, pursuant to the procedures set forth in Article (170) above. Part Four Depositing in Public Warehouses

Article (177) 1. A warehouseman may not practice in any capacity, either for himself or for others, any commercial activity having for goods of the same kind as the goods which he is licensed to keep in his warehouse and issue instruments representing such goods. 2. The above provision shall apply if the person in charge of investing the warehouse is a company where one of its partners, who owns at least (10%) ten percent of its capital, practices a commercial activity included in the prohibition provided in Clause (1) above.

Article (178) 1. The bailer shall provide the public warehouse with correct data about the nature, type, value and quality of the goods warehoused. 2. The bailer may examine the goods delivered to the public warehouse for his account and to take samples thereof.

-- 68 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 69

Article (179) 1. The warehouseman shall be responsible for the goods handed over to him up to a sum not exceeding that estimated by the bailer. 2. The warehouseman shall not be held accountable for any loss or deficit sustained by the goods if such loss or deficit caused by a force majeure event or by the nature of the goods or packing thereof.

Article (180) The warehouseman may, after notifying the bailer, apply to the court to which jurisdiction the public warehouse pertains to grant him permission to sell the goods warehoused if they are subject to immediate damage, and the court shall designate the method of sale.

Article (181) 1. The bailer shall receive from the warehouseman a storage receipt showing the bailer's name, occupation and domicile, as well as the type, nature and quantity of the goods warehoused, name and location of the warehouse, name of the insurer of the goods (if any) and such other particulars as are required to identify the goods and indicate their value. 2. A pledge deed stating all the data mentioned in the storage receipt shall be attached to each storage receipt. 3. The warehouseman shall keep one true copy of the original storage receipt and the pledge deed.

Article (182) Where the goods stored in respect of which a storage receipt and a pledge deed have been

-- 69 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 70 issued are fungible, they may be replaced by goods of the same nature and quality provided that a stipulation to that effect has been included in both the storage receipt and the pledge deed. In such case, all the rights and privileges of the receipt or pledge deed holder shall transfer to the new goods.

Article (183) 1. The storage receipt and the pledge deed may be issued in the name of or to the order of the bailer. 2. Where the storage receipt and the pledge deed are made to the order of the bailer, he may assign them together or separately by means endorsement. 3. The endorsee of a storage receipt and/or a pledge deed may request that the endorsement be registered along with his domicile and occupation in the copy kept by the warehouseman.

Article (186) Where the debt secured by the pledge deed is not paid on the maturity date, the holder of the pledge deed separate from the storage receipt may request for the goods pledged to be sold, pursuant to the procedures set forth in Article (170) above.

Article (188) 1. The holder of a pledge deed may not have recourse against the debtor or endorsers until the execution over the mortgaged goods has been effected and it has been established that it is insufficient to pay off the debt. 2. The holder of a mortgage deed shall have recourse against the endorser within (15) fifteen days from the date on which goods are sold, otherwise his action shall be rejected in case of denial. 3. In all cases, the action of holder of a mortgage deed for recourse against endorsers shall be barred if he fails to initiate the execution proceedings against the mortgaged goods within (30) thirty days from the maturity date of the debt.

Article (189) Where the goods stored suffer an accident, the holder of the storage receipt or the pledge deed shall have all the rights over the insurance sum which accrues upon the occurrence of such accident as those he had over the goods.

Article (191) 1. A guarantor who has been presented in the case of loss of the storage receipt shall be discharged of liability upon recovery of the goods or upon the lapse of (3) three years if no claim for the recovery of the goods is submitted to the warehouse. 2. A guarantor who has been presented in the case of loss of the pledge deed shall be discharged of liability upon the lapse of (3) three years from the date of registering the endorsement in the books of the public warehouse.

Article (192) 1. Where the bailer fails to recover the goods upon the expiry of the warehousing contract, the warehouseman may request the sale thereof, pursuant to the procedures set forth in

Article (193) 1. Without prejudice to any severer penalty, any person who establishes or invests a public warehouse without obtaining the license set forth in Clause (2) of Article (176) above shall be sentenced to imprisonment and/or a fine not less than (AED 20,000) twenty thousand dirhams and not more than (AED 100,000) one hundred thousand dirhams. 2. The court may, in case of conviction, order the closure of the warehouse until the violator obtains the required license, and it may also order the liquidation of the warehouse. Part Five Stock and Commodities Market

Article (194) A stock market or a commodities market may be opened in the State only after obtaining the necessary licenses according to the legislation governing stock markets and commodity markets in force in the State. Part Six Commercial Agency Chapter One General Provisions

-- 74 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 75

Article (195) 1. An agency shall be commercial when it relates to commercial activities. 2. The application of the provisions set out in this Part shall be effected in so far as they do not contradict the Law of Commercial Agencies, referred to in this Law.

Article (196) 1. A commercial agency shall be deemed paid, save where otherwise agreed upon. 2. Where the agent's remuneration is not fixed in the agreement and is not stated in the Law, it shall be fixed according to customs, and in the absence of custom, the court shall estimate it.

Article (197) The remuneration shall accrue to the agent by the mere execution of the transaction assigned to him or if he proves that it was not executed due to reasons attributed to the principal. In all other cases, the agent shall be entitled to only a remuneration for his efforts and expenses to be paid in accordance with customs (if any) or pursuant to the court's estimation in the absence of customs.

Article (198) A commercial agency, even though it has a general power of attorney, shall apply only to commercial business, save where otherwise agreed upon.

Article (199) Where the commercial agency is granted for a specific commercial transaction, the agent may carry out all actions required to execute such transaction with no need to obtain an

-- 75 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 76 authorization from the principal.

Article (201) Where the agent implements the tasks assigned to him under conditions that are more beneficial than those stipulated in the agency, he may not acquire the difference which in such a case belongs to the principal, save where otherwise agreed upon.

Article (202) Where the goods or items held by the agent for the account of the principal are highly perishable or are subject to value declination and no instructions are received from the principal in this respect within a reasonable time, the agent may raise a prompt request to the court for authorization to sell them and determine the method of sale.

-- 76 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 77

Article (203) The agent may refrain from performing the work entrusted to him where performance requires exorbitant expenses which have not been paid by the principal, unless otherwise agreed upon between the two parties or unless there are previous dealing between them stating that such expenses shall be paid by the agent.

Article (204) Where the agent refuses to execute the transaction entrusted to him, he shall forthwith notify the principal thereof. In such case, the agent shall keep safe the goods and other things which he keeps for the principal until he receives instructions in this respect. If the instructions are not received within a reasonable time, the agent may request the court to authorize him to deposit the goods and other things with a trustee to be appointed by the court.

Article (205) The agent shall be liable for such damage and loss as are suffered by the goods and other items which he keeps for the principal, save where such damage or loss has been arisen by an external cause beyond the agent's control of the agent or from a defect that is inherent in the goods or items.

Article (206) The agent shall not be bound to insure the items which he keeps for the principal unless the latter so requires, or where the insurance is obligatory according to the law or custom, or if the nature of the item so dictates.

-- 77 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 78

Article (207) 1. The agent may not constitute himself as a second party to the transaction assigned to him for execution except in the following cases: a. If the principal authorizes him to do so; b. If the principal's instructions concerning the transaction are express and specific and precisely executed by the agent; and c. If the transaction is related to a commodity which has a fixed price in the market and the agent has bought it for himself or has sold it to the principal from his own money at such price. d. The agent shall not be entitled to any remuneration against the agency in the above cases.

Article (208) A third party dealing with the agent may request to peruse the agency contract, correspondence and other documents establishing the agent's authority. Any restrictions to the agent's authority shall not be valid vis-à-vis third parties, except if it is established that such parties were aware of such restrictions at the time of concluding the contract.

Article (209) The agent shall inform the principal of the transactions he concludes for the principal's account.

Article (210) The agent shall submit to the principal on the agreed date or on the date fixed by custom or by their previous dealings an account of the business carried out for his account. Such account

-- 78 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 79 shall be in conformity with the facts. If false particulars have been premeditatively included therein, the principal may reject the relevant transactions and shall further be entitled to claim damages. The agent shall not receive any remuneration for the said transactions.

Article (211) The agent may retain possession of the goods and other items dispatched to, deposited with or delivered to him, as a security for the remunerations and expenses due to him from the principal.

Article (212) Both parties to the commercial agency contract may terminate it at any time, and no compensation is due except if the termination occurs without prior notice or at an inconvenient time. Where the contract has a fixed term, it may be terminated only for a serious and acceptable reason, otherwise compensation will be required.

Article (213) Where the principal does not have a known domicile in the State, the domicile of his agent shall be deemed to be his domicile. He may be litigated against and have official papers served to such domicile with regard to the business conducted by the agent for the principal.

Article (214) Anything related to the regulation of commercial agency business shall be governed by the relevant laws.

-- 79 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 80 Chapter Two Certain Types of Commercial Agencies

Article (215) I :Contract Agency 1. A contract agency is a contract whereby an agent undertakes to carry out, continuously and in a specific area of activity, instigation and negotiation in order to conclude transactions for the benefit of the principal in return for a remuneration. The contracts agent's task may include the conclusion and implementation of such transactions in the name of the principal and for his account. 2. A contract agency shall be in writing and shall indicate in particular the scope of agency, remuneration of the agent, area of activity, contract term, in case of a fixed-term contract, and the trademark (if any) of the commodity subject of the agency.

Article (216) A contract agent shall carry out his agency and manage his commercial activity in an independent manner, and shall solely bear the expenses necessary to conduct his activity.

Article (217) Where the contract stipulates that the contract agent shall set up showrooms, warehouses for goods or maintenance or repair facilities, the contract term may not be less than five years, unless otherwise agreed.

-- 80 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 81

Article (218) 1. The contract agent may not receive the principal's rights, unless the principal grants him this right, and in which case, the agent may not make any reduction or grant a time limit without obtaining a special authorization therefor. 2. The contracts agent may receive such orders as are related to the performance of the contracts entered in through him, as well as any complaints concerning the non- performance of such contracts. He shall further be deemed as the representative of his principal in the actions relevant to said contracts, whether filed by or against him, in the area of activity of the agent.

Article (219) 1. The principal shall pay the agreed remuneration to the agent. 2. Such remuneration may be a percentage of the transaction value, which shall be calculated on the basis of the price of sale to the customers, unless otherwise agreed.

Article (220) The contracts agent shall be entitled to a remuneration for transactions concluded by him or for those whose non-conclusion is due to the principal's act, unless otherwise stipulated by the contract.

Article (221) The principal shall provide the agent with all information necessary for the implementation of the agency.

-- 81 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 82

Article (222) 1. The contracts agent shall be bound to safeguard the principal's rights and he may take all the precautionary measures to that effect. He shall as well provide the principal with the information pertaining to the market condition at the area of his activity. 2. The contracts agent may not, even after termination of the contractual relationship, divulge the principal's secrets which may come to his knowledge as a result of the execution of the agency.

Article (223) In the event where the principal replaces the contracts agent by a new agent, the latter shall be jointly responsible with the principal for the payment of the compensation decided by the court to the previous agent whenever it is established that the replacement of the previous agent was a result of collusion between the principal and the new agent.

Article (224) Notwithstanding the rules of jurisdiction provided for in the Civil Procedure Code, the court within its jurisdiction the contract performance is located shall be competent to hear all disputes arising from the contracts agency.

Article (225) A distribution contract whereby a merchant undertakes to promote and distribute products of an industrial or commercial facility in a specific area on an exclusive distributorship basis, shall be considered as a contract agency, and shall be governed by the provisions of Articles (218), (223) and (224) hereof.

-- 82 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 83

Article (226) In case of denial and lack of lawful excuse, all cases arising from a contract agency shall be barred after the lapse of (3) three years from the termination of the agency.

Article (227) II: COMMISSION AGENCY 1. A commission agency is a contract whereby the agent undertakes to carry out in his own name a legal act for the account of the principal against a commission to be received from the principal. 2. Where the commission agent carries out the legal act in the name of the principal, he shall be governed by other general provisions of the commercial agency.

Article (228) 1. Where the commission agent sells at a lower price or buys at a higher price than that fixed by the principal, and the latter wishes to refute the transaction, the principal shall notify the agent thereof within one week from the date on which he is informed that said transaction was concluded, otherwise, he shall be considered as having accepted the price. 2. The principal may not reject the transaction if the agent accepts to bear the price difference.

Article (229) 1. Where the commission agent buys for the account of the principal goods of a type or category that is different from that requested by the principal, the latter shall not be bound to accept the same.

-- 83 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 84 2. Where the commission agent buys goods which are in conformity to the goods requested but in a larger quantity, the principal shall be bound to accept only the quantity which he requested.

Article (230) Where the commission agent enters into a contract with conditions better than the ones identified by the principal, the benefit shall be reverted to the principal. However, the agent shall provide his statement of account based on the real conditions whereby the transaction has been made.

Article (232) Where the instructions of the principal require the commission agent to effect sale against a deferred price and the latter effects the sale for an advance payment lower than the same, the principal may not require him to pay the price until maturity of the term fixed by him. In such

-- 84 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 85 case, the commission agent shall pay the price on the basis of a deferred-payment sale.

Article (233) 1. A commission agent may not change trademarks affixed to the goods received by him from the principal or for the principal's account. 2. Where the commission agent has possession of a whole bunch of goods of the same kind which were dispatched to him by different principals, he shall distinctively label each batch of goods.

Article (235) 1. A commission agent shall be directly liable to third party with whom he entered into contract, and such third party shall also be directly liable to the commission agent. 2. A third party with whom the commission agent has entered into contract may not have

-- 85 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 86 direct recourse against the principal, nor may the latter have direct recourse against such third party, unless the Law provides for otherwise.

Article (238) The agent's lien shall have priority over all other liens, except judicial expenses and sums due to the Government.

Article (239) 1. The execution proceedings adopted for a commercially mortgaged item shall apply to the execution against goods and items in possession of the agent. 2. Where the agent is assigned to sell the goods or items in his possession, he may obtain execution thereon by selling them without having to comply with the proceedings referred to Clause (1) above, unless he fails to implement the principal's express instructions issued in respect of the sale.

Article (240) 1. Where the commission agent who is assigned to sell is declared bankrupt before receiving the price, the principal may claim payment of the price directly from the buyer. 2. Where the commission agent who is assigned to buy is declared bankrupt before he receives the item sold, the principal may claim delivery of the item sold directly from the seller.

-- 87 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 88

Article (241) 1. A commission agent shall not guarantee the fulfillment of his obligations by the third party with whom he contracted, unless he assumed expressly this guarantee, or if such guarantee is stipulated by Law, or if it is customary at the area where he carries out his activity. 2. A commission agent, who is guarantor of the fulfillment by the contractor of his obligations, shall be entitled to an additional remuneration to be determined by the court where there is no agreement or custom in this respect.

Article (242) A commission agent may not delegate to a third party the work entrusted to him, unless he obtains the permission of the principal to do so. If he delegates another agent to carry out such work, the person delegated shall have no right of seizure or lien except to the limit of the debt due to the original commission agent.

Article (243) III: COMMERCIAL REPRESENTATION A commercial representation is a contract whereby a commercial representative undertakes to conclude, on a permanent basis and within a specific area, transactions in the name and for the account of his principal.

Article (244) A commercial representative shall not warrant the implementation of transactions concluded through him, unless he had expressly agreed to such warranty or in case the custom in the area where he carries out his activity dictates such warranty.

-- 88 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 89

Article (245) 1. A merchant shall be liable for any transactions and contracts entered into by his representative within the limits of the delegation conferred on him by the merchant. 2. Where the representative is delegated to by several merchants, they shall jointly assume the liability. 3. If the representative is delegated by a company, the company shall be liable for his work, and the partners' liability shall depend on the type of company.

Article (246) 1. Where the limits of the authority vested in the commercial representative have not been determined, the authority shall be deemed general and comprehensive for all the transactions related to the kind of trade which the representative has been delegated to carry out. 2. A merchant may not invoke the limitation of delegation against a third party unless he establishes that such third party is aware of such limitation.

Article (248) A commercial representative may represent the merchant in actions arising from the commercial transactions carried out by him.

Article (249) A commercial representative shall be jointly liable with the merchant for complying with the law provisions related to unfair competition.

Article (250) A commercial representative may not carry out any commercial transaction of the kind for which he is represented for his own account or for the account of a third party, without the express prior consent of the merchant who appointed him.

Article (252) Brokerage is a contract whereby a broker undertakes to another person to look for and mediate in negotiations with a second party, in order to enter into a specific contract, in consideration of a fee.

Article (253) 1. Where the broker's fee is not fixed in the Law or the agreement, it shall be determined according to the customs. In the absence of a custom, the judge shall estimate it according to the transaction value, the effort exerted by the broker and the time spent by him while carrying out the task assigned to him. 2. The judge may reduce the fee agreed if it is not commensurate with the nature of the transaction and the effort exerted by the broker. No reduction may be decided if the fee was agreed upon or if it was willingly paid by the customer after the conclusion of the contract brokered by the broker.

Article (255) Where the contract which has resulted from the broker's brokerage is terminated, the broker may claim his fee or keep it where he has already received it, unless fraud or serious error is established on his part.

Article (256) Where the broker brokers the conclusion of a legally-prohibited transaction, he shall not receive any fee in consideration of such transaction.

Article (257) 1. The broker shall be entitled to receive a fee only from the party to the transaction who has delegated him. 2. Where the broker has been delegated to by both parties, each of them shall be severally liable to the broker for payment of the fee due to him, even if they had agreed that either party will bear the broker's fee in full.

Article (258) A broker, even if he is delegated only by one of the transaction parties, shall submit a faithful offer to them and inform them of all circumstances known to him, and he shall be liable to them for any fraud or fault committed by him.

-- 92 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 93

Article (259) A broker may not recover the expenses incurred by him in the execution of the task assigned to him, unless otherwise agreed. In such case, the said expenses shall be payable even if the contract has not been concluded.

Article (260) A broker may not claim his fee or recover his expenses if he has caused damage to either contracting party in favor of the other contracting party who did not assign him to broker in the conclusion of the contract, or where he has obtained a promise from such other party contrary to the good faith in order to obtain a benefit for himself.

Article (261) A broker may not act as second party to the contract for which he acts as a broker, unless the contracting party authorizes him to do so. In such case, the broker shall not be entitled to a fee.

Article (262) 1. A broker shall record in regular entries all the transactions concluded through his endeavors, and shall keep the relevant documents, and shall further give a true copy of all the foregoing to any contracting party requesting the same. The said entries shall be governed by the same provisions of commercial books. 2. In case of sale according to samples, the broker shall keep the sample until the goods are accepted by the buyer, without any reservation, or until all conflicts are settled between the two parties in this respect.

-- 93 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 94

Article (263) A broker shall be liable to compensate any damage arising from the perishing or loss of documents, papers or items delivered to him pertaining to the transaction for which he is brokering, unless he proves that such perishing or loss was due to a force majeure event.

Article (264) A broker may not render brokerage for persons who are reputed for their insolvency, or if he knew them to be unqualified.

Article (265) 1. A broker shall not be required to guarantee the solvency of the two parties to the transaction in which he acts as a broker and shall bear no liability for its implementation or for the value and quality of the goods related thereto, unless an act of fraud or fault is established on his part, or where he acts as a guarantor under the agreement or Law. 2. The broker shall be jointly liable for the implementation of the transaction with the contracting party if he has an interest therein in addition to his fee.

Article (267) Where several brokers have been assigned for one contract, they shall be jointly liable for the task entrusted to them, unless they have been authorized to act severally.

Article (268) Where several persons assign one broker for a joint task, they shall be jointly liable to the same for the performance of such task, unless otherwise agreed upon.

Article (269) Brokerage in stock markets and goods shall be governed by the provisions of the relevant laws and regulations. Part Eight Carriage Chapter One General Provisions

Article (270) A carriage contract is a contract whereby a carrier undertakes to carry by his own means a person or an item from one place to another in return for a fee.

-- 95 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 96

Article (271) Apart from maritime transport, the provisions stipulated in this Part shall apply to all kinds of carriage, regardless of the carrier's capacity, subject to those provisions stipulated in the laws concerning certain kinds of carriage and the provisions of the international carriage conventions applicable in the State.

Article (272) The provisions set forth in this Part shall apply to carriage even if it is associated with operations of another nature, as long as such operations do not constitute the main objective of the contract.

Article (273) 1. A carriage contract and a commission agency contract for carriage shall be concluded by the mere association of an offer and an acceptance, unless both parties agree to defer such conclusion to the time of delivery. The contract may be proved by all means of evidence. 2. The receipt by the carrier of the item subject to carriage shall be deemed as an acceptance by him of the offer made by the consignor. 3. A passenger's boarding on the means of transport shall be considered as an acceptance of the offer made by the carrier, unless it is established that the passenger's intention was not to conclude a carriage contract.

Article (274) 1. Where the carrier uses multiple forms of contracts and the two parties have not agreed to adopt a specific form, the carriage shall be effected according to the form which includes the general conditions.

-- 96 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 97 2. Where the two parties agree to adopt a specific form, the conditions stated therein shall be indivisible.

Article (276) The carrier's liability shall cover his acts and those of his subordinates when such acts are committed by them in the course of rendering their services. All persons employed by the carrier for the performance of its obligations under the carriage contract shall be considered as a subordinate.

Article (278) A carrier may not be held accountable for compensating any damage arising from the disruption of carriage or deviation from the route set due to necessity to provide assistance to any sick, injured or endangered person.

Article (279) 1. Fraud in the performance of a carriage contract shall mean any act or omission committed by the carrier or his subordinates with the intent to cause damage. 2. A serious error shall mean every act or omission committed by the carrier or his subordinates with imprudence associated with awareness of the damage which may be caused. Chapter Two Contract of Carriage of Things

Article (280) 1. The consignor shall provide the carrier with the particulars concerning the consignee's name and address, destination of the carriage, kind of items intended for carriage, as well as their value, weight, volume, quantity, packaging and wrapping method, number of parcels included and any other particulars as are sufficient to identify the item required to be transported, in addition to the delivery time limit and the route to be followed. 2. The consignor shall be held accountable for any damage arising from false or insufficient particulars provided by him.

-- 98 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 99

Article (282) 1. The consignor may require the carrier to hand him a copy of the bill of lading. 2. Where no bill of lading is executed, the consignor may require the carrier to deliver to him a receipt signed by the carrier purporting to the receipt of the item carried. Such receipt shall be dated and must include the sufficient particulars to identify the item carried and the

-- 99 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 100 freightage.

Article (283) The bill of lading and the receipt issued and signed by the carrier purporting to the receipt of the item carried shall constitute evidence for the particulars stated therein. Any person claiming the contrary to such particulars shall have to establish same.

Article (284) 1. The rights and obligations arising from the carriage contract shall neither be established for nor be binding on the consignee, unless he accepts such rights and obligations either expressly or implicitly. 2. The receipt by the consignee of the bill of lading or of the item intended for carriage, as well as his requiring to deliver the same to him or to issue instructions in this respect, shall be deemed as an implicit acceptance of rights and obligations arising from the carriage contract.

Article (285) 1. The consignor shall deliver to the carrier the item to be carried and the documents necessary for the performance of the carriage. The consignor shall be held liable where such documents are insufficient or untrue. Meanwhile, the carrier shall be liable for the loss or misuse of such documents. 2. Where the carriage requires special preparations, the consignor shall so notify the carrier within sufficient time prior to the delivery of the item to be carried. 3. Delivery shall take place at the place of business of the carrier, unless otherwise agreed upon.

-- 100 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 101

Article (288) The receipt by the carrier of the items to be carried without any reservations shall constitute evidence that he received them in good condition and in conformity with the particulars stated in the bill of lading. Where the carrier claims otherwise, it shall be required to prove it.

Article (289) 1. The carrier shall ship and stack the item to be carried on board of the ordinary means of carriage, unless otherwise agreed. 2. Where the consignor requires the shipping to be made on board a specific type of means of carriage, the carrier shall not be liable for damage caused by the use of such type of means of carriage, unless it has been caused by its own fault or the fault of its subordinates.

Article (290) 1. The carrier shall follow the route agreed upon. In the absence of an agreement for a specified route, the carrier shall take the shortest route. 2. A carrier may change the route agreed upon or take a longer one where a necessity arises compelling it to do so. In such case, the carrier shall bear no liability for the delay and other damage which may result from the change of route, unless fraud or gross fault is

-- 102 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 103 established on its part or on the part of its subordinates.

Article (291) 1. The carrier shall ensure the safety of the item during the performance of the carriage contract. 2. Where the safekeeping of the item during carriage route necessitates re-packaging or repair, increase or decrease of wrapping or any other necessary measures, the carrier shall undertake this and pay any costs required therefor, unless otherwise agreed upon. Notwithstanding the foregoing, the carrier shall not be committed to take any extraordinary measures in the transport such as the supply of food and water to animals, provide medical services or other services or irrigate plants, unless otherwise agreed upon.

Article (292) 1. The carrier shall unload the item upon arrival, unless unloading is carried out by the consignee or another person under an agreement, law, regulation or instructions. In such case, the carrier shall not be liable for any damages resulting from the unloading. 2. In all cases, the carrier shall bear the unloading costs, unless otherwise agreed upon.

Article (297) The consignor shall pay to the carrier the freightage and other costs which may accrue, save

-- 105 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 106 where it is agreed that they shall be borne by the consignee, in which case, both the consignor and consignee shall be jointly liable to pay them to the carrier.

Article (298) The carrier shall not be entitled to freightage in respect of such items perished in consequences of a force majeure event.

Article (299) 1. Where a force majeure event prevents the execution of carriage, no freightage shall accrue to the carrier. However, if said force majeure event hinders the carriage from being completed, the carrier shall be entitled to receive the freightage for the part performance of the carriage. 2. In all cases, the carrier may claim payment of the loading and unloading costs and other necessary costs.

Article (300) The right to claim for the recovery of the sum paid in surplus to the freightage agreed or prescribed in the carriage conditions shall be vested in the person who paid the freightage.

Article (301) 1. The carrier may withhold the item carried in satisfaction of the freight, expenses and other sums payable thereto. 2. The carrier shall have a lien over the price collected from the enforcement against the items carried, in satisfaction of the freight and other sums payable to the carrier because of the carriage. The provisions regulating the procedures of enforcement against

-- 106 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 107 commercially-pledged items shall apply in this regard.

Article (302) 1. From the moment the carrier receives the item to be carried, the same shall be held accountable for its destruction, in whole or in part, damage and delayed delivery thereof. 2. An item shall be deemed totally perished if the carrier fails to deliver it or to notify the consignee to attend to receive it within (30) thirty days following the expiry of the time limit set for delivery, or upon the expiry of the time limit usually required by an ordinary carrier for the carriage had it been in the same circumstances or if no date for delivery has been fixed.

Article (303) The carrier shall not be liable for destruction or impairment of the item carried after being delivered to the consignee, the agreed-upon customs point or the trustee appointed by the court for safekeeping of the item, except where fraud or gross fault is established on the part of the carrier or its subordinates.

Article (304) 1. The carrier shall not be held accountable for any loss in weight or volume that usually occurs to the item during the carriage process due to its nature, unless it is proved that such a loss has resulted from any other cause. 2. Where the bill of lading covers several items divided into groups or parcels, the tolerable loss of weight shall be determined on basis of the weight of each group or parcel in case such a weight is, or could have been, specified separately in the bill of lading.

-- 107 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 108

Article (305) Where the item is carried in the custody of the consignor or consignee, the carrier shall not be liable for its destruction or damage, unless fraud or gross fault is proved on the part of the carrier or its subordinates.

Article (306) The carrier may not deny its liability for the destruction, damage, or delayed delivery, of the item carried, save where the same proves a force majeure event, a defect inherent to the item carried, a fault committed by the consignor or consignee or an act of the Government.

Article (307) 1. Any condition relieving the carrier from liability for total or partial destruction or damage of the item carried shall be null and void. Moreover, any condition relieving the carrier of such liability if arising from the acts of its subordinates shall also be null and void. Any condition that would bind the consignor or consignee, in any capacity whatsoever, to pay all or part of the insurance expenses against the carrier's liability shall be deemed as an act of relief from liability. 2. The carrier may require its total or partial relief from liability for delayed delivery.

Article (309) The condition for limitation of, or relief from liability for delayed handover shall be established in writing, otherwise, it shall be deemed null and void. Where the carriage contract is executed on printed forms, the said condition shall be clear and explicitly stipulated; otherwise, the court may consider it null and void.

Article (310) The carrier may not invoke the condition of liability limitation or relief for delayed delivery where fraud or gross fault is proved on its part or on the part of its subordinates.

Article (312) 1. No indemnity shall be concurrently claimed for both total loss and delayed delivery of the item carried. 2. The indemnity for total destruction loss shall include the value of the item perished and any loss sustained by the claiming party in consequences of such destruction. 3. The indemnity for delayed delivery shall, in case of partial destruction, awarded only for the undestroyed part. 4. In all cases, the court-ordered indemnity shall not exceed the indemnity amount falling due in the event of the total destruction of the item.

Article (313) Where the item is partially damaged or perished or its delivery is delayed, so that it no longer becomes valid for the purpose of its use, and the carrier's liability for such damage, destruction or delayed delivery is established, the party claiming indemnity may waive the item in favor of the carrier against indemnity to be determined on basis of the total destruction of the underlying item.

Article (317) Each of the consecutive carriers may require that the item carried be examined and its condition be established upon delivery thereof to it by the preceding carrier. Where the carrier receives such an item without making reservations, it shall be assumed that it has received it in a good condition and in conformity with the particulars stated in the bill of lading, unless evidence to the contrary is furnished.

Article (318) The last carrier shall be liable towards the preceding ones for claiming payment from the consignee of the sums due because of the carriage, and it may collect such sums on their behalf and take all legal measures for collection thereof, including, among others, the use of

-- 112 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 113 the right of withholding, and the right of lien over, the item subject of carriage.

Article (320) Any person or subordinate of a person having committed an act of fraud or gross fault may not invoke the limitation period of legal proceedings set forth in Article (319) above. Chapter Three Passenger Carriage Contract

Article (321) 1. A passenger shall pay the carriage fare on the date agreed upon or the date stated in the carriage schedules or as dictated by the customary practices, and shall abide by the carrier's instructions with regard to the carriage.

-- 113 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 114 2. The carrier shall carry the luggage carried by the passenger during the travel, and the passenger shall not pay any fare for the transport of his luggage, except where such luggage exceed the maximum threshold stated in the carriage tariff or the threshold recognized by customary practices.

Article (322) 1. Where a force majeure event prevents the commencement of carriage or where, before execution of carriage, circumstances occur rendering such carriage a threat to lives, the carrier shall not pay any indemnity on the grounds of failure of execution, nor shall the latter be entitled to receive the fare. 2. Where the force majeure event or threat to lives arises after commencement of execution of carriage, the carrier shall receive the fare only for that part of carriage executed by it.

Article (323) Where carriage is not possible because of death or illness of the passenger or due to any other compelling impediments, the carriage contract shall be terminated and the fare shall not be payable.

Article (324) 1. Where the passenger decides against travelling before its commencement, he shall notify the carrier of his decision before the date set for execution of the carriage. In case of extreme necessity, such notification may be served on the same day. 2. Where the notice is served according to Clause (1) of this Article, the carrier's fare shall not be payable. However, the carrier may claim compensation for the damage sustained by it due to the fact that the passenger has refrained from the carriage.

-- 114 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 115

Article (325) Where the passenger refrains from continuing the trip after commencement thereof, the full fare shall be payable, unless his refrainment is attributed to extreme necessity, in which case, he shall pay only the fare corresponding to the executed part of carriage.

Article (326) Without prejudice to the provisions of Articles (324) and (325) hereof, where the passenger fails to attend on the time scheduled for carriage, he shall pay the full fare and he may, whether he paid the full fare before or after the date scheduled, request that the carriage be executed on a later date, unless otherwise agreed.

Article (328) The passenger may, before commencement of execution, relinquish the carriage ticket, unless

-- 115 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 116 it is issued in the passenger's name or delivered to him based on special considerations.

Article (329) 1. The carrier shall prepare for the passenger a seat in the agreed-upon class, and the latter may recover from the carrier the difference in case he is compelled to travel in a lower class than the one indicated on his ticket. 2. Where the passenger pays an additional fare against special benefits, he may claim that such additional fare be reimbursed to him if the carrier fails to provide the corresponding benefits.

Article (330) 1. The carrier may withhold the passenger's luggage in satisfaction of the fare and the price of food or other items served to him during the performance of the carriage contract. 2. The carrier shall have lien over the price of the passenger's luggage in satisfaction of the carriage fare and other amounts payable to it due to carriage. The proceedings of enforcement against commercially pledged items shall apply in this respect.

Article (331) 1. The carrier shall carry the passenger and his luggage to the destination place on the date agreed upon, and if no date is specified, then within the time limit required by an ordinary carrier under the same circumstances. 2. The carrier may, prior to carriage commencement or during the trip, examine the passenger's luggage in his presence to ensure their conformity with the carriage conditions.

-- 116 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 117

Article (333) 1. The carrier shall be liable for the delayed arrival and for such bodily or non-bodily injuries sustained by the passenger during the performance of the carriage contract. 2. The liability set out in Clause (1) shall only lapse if the carrier proves that the delay or injury is due to force majeure, the passenger's fault or a third party's act.

Article (334) 1. Any condition that relieves the carrier, in full or in part, from liability with regard to bodily injuries sustained by the passenger shall be null and void. 2. Any condition which aims to make the passenger, in any way, compelled to pay all or any of the insurance expenses against the carrier's liability shall be deemed as an act of relief

-- 117 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 118 from liability.

Article (336) 1. Passengers shall watch over their own luggage and animals permitted to be carried with them. The carrier shall not be liable for any loss or damage which may be sustained by the same, save where the passenger proves that such loss or damage is due to a fault by the carrier or its subordinates. 2. The passenger shall be liable for the damage sustained by the carrier or third parties due to the luggage or animals carried with him. 3. As for the luggage delivered to the carrier, the carriage thereof shall be governed by the provisions related to the carriage of items.

-- 118 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 119

Article (337) 1. Where a passenger dies or falls ill in the course of performance of the carriage contract, the carrier shall take such measures as deemed necessary to safekeep its luggage until they are delivered to the persons concerned. 2. Where any of the persons concerned is present at the place where death or illness occurs, he may intervene to monitor the measures adopted by the carrier to safekeep the luggage, and request the carrier to deliver to him a declaration that the passenger's luggage is in his custody.

Article (338) Heirs and dependents of a passenger may, in execution of a maintenance obligation, institute an action for liability arising from the carriage contract in case of the passenger's death, regardless of whether the death occurred directly after the incident or after the lapse of a period of time.

Article (339) The carrier's liability for a passenger's death or bodily injury shall be limited to the blood money amount for manslaughter, pursuant to the statutes in force in the State. However, such amount may be agreed to be specified in an amount not less than such blood money amount.

Article (341) 1. A commission agency for carriage is a contract whereby the agent undertakes to enter into a carriage contract in his own name and for the benefit of his principal and to carry out, where necessary, such operations as related to the carriage, in consideration of a commission to be received from the principal. A commission agent for carriage shall, with regard to the consignor, have the same liability of the carrier. 2. Where the commission agent undertakes carriage by his own means, he shall be governed by the provisions of the carriage contract, unless otherwise agreed upon.

Article (342) Notwithstanding the provisions set forth in this Chapter, the provisions of commission agency shall apply to the commission agency for carriage.

Article (343) The principal may, at any time, cancel the order for carriage before the commission agent enters into the carriage contract. In such case, the principal shall refund to the commission agent the expenses incurred by him and shall compensate him for any work performed.

-- 120 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 121

Article (344) 1. The commission agent for carriage shall implement his principal's instructions, particularly those instructions related to the date of carriage, the selection of the carrier and the carriage means and the route to be followed. 2. The commission agent may not charge his principal any fare/freight exceeding the one agreed upon with the carrier, and any benefits obtained from the carrier by the commission agent shall extend to the principal, unless otherwise agreed upon in the commission contract or as dictated by the customary practices.

Article (345) The commission agent for carriage shall be liable for the safety of passengers or the items carried, and any agreement to the contrary shall be null and void.

Article (347) 1. Any condition relieving the commission agent for carriage, in whole or in part, from liability for bodily injuries suffered by the passenger shall be null and void. 2. Any condition which imposes on the passenger, in any manner whatsoever, the payment of all or any of the insurance costs against the liability of the commission agent shall be deemed as an act of relief from the liability.

Article (349) 1. The principal and passenger shall each have direct recourse against the carrier to claim the rights arising from the carriage contract. The carrier shall also have direct recourse against each of the principal and passenger to claim such rights. In all cases, the commission agent shall be involved in the relevant case. 2. The passenger, in respect of the carriage contracts of persons, and the consignee, in respect of the carriage contract of items, shall each be entitled to direct recourse against the principal, the carrier and commission agent for carriage for the rights arising from the carriage contract.

Article (350) Where the commission agent pays the fare/freight to the carrier, he shall subrogate the latter in respect of its rights.

Article (351) The original commission agent shall be liable for the commission agent in respect of the carriage assigned by the former, unless the consignor has appointed the commission agent under the agreement concluded with the original principal.

Article (352) The provisions of Articles (319), (320) and (340) above shall apply to the inadmissibility of the cases arising from commission agency contract for carriage.

-- 123 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 124 Chapter Five Provisions Pertaining to Air Carriage

Article (353) 1. Air carriage mentioned herein shall mean the carriage of persons, luggage and goods by airplanes in consideration of a fee. 2. Luggage referred to in Clause (1) above shall mean items which the passenger is allowed to carry with him aboard the airplane or which are delivered to the carrier for safekeeping during the flight.

Article (354) Without prejudice to the international conventions to which the State is a party, the provisions of this Part shall apply to air carriage, subject to the specific provisions stipulated in the following Articles.

Article (355) An air carrier shall be held liable for such damage sustained as a result of a passenger's death, wounding or bodily injury occurring during air carriage or during any of the operations of the passenger's boarding or disembarkation of the airplane.

Article (357) An air carrier shall be held liable for damage caused by the delayed arrival of passengers or the registered luggage or goods.

Article (358) An air carrier shall not be liable for small personal items which are retained in the custody of passengers during the flights. The air carrier may not be held accountable for the same unless the passenger proves that the carrier or its subordinates have failed to take the necessary measures to prevent the occurrence of the damage.

Article (360) An air carrier shall be held liable within the limits set forth in Article (359) above, regardless the capacity of the litigants in the civil liability action.

-- 126 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 127

Article (361) 1. Where an action for compensation is brought against any of the carrier's subordinates, he may invoke the limitation of liability set forth in Article (359) where it is proved that the act which has caused the damage was committed by him during the performance of his duties. 2. However, no subordinate of the carrier may invoke the limitation of liability where it is proved that the damage is caused by an act or omission by him, whether with intent to cause damage or with imprudence coupled with awareness that damage is likely to arise out.

Article (362) 1. The airway bill shall contain a statement that the carriage is taking place in accordance with the liability limitation provisions set out in Article (359) above, otherwise, the carrier or its subordinates may not invoke such provisions. 2. Any condition relieving the air carrier from liability or limiting such liability in amount less than that specified in Article (359) above shall be null and void, except where the item carried has perished or has sustained damage due to its nature or due to an inherent defect.

Article (363) The consignee's receipt of the luggage or goods at the place of arrival without having any reservation shall constitute a presumption that he has received them in a good condition and in conformity with the conditions of the airway bill, unless otherwise proved.

-- 127 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 128

Article (365) 1. Where the carriage is made free of charge, the air carrier shall assume no liability, unless it is proved that the carrier or its subordinates have committed a fault, in which case, the carrier shall be held accountable within the limits stipulated in Article (359) above. 2. Carriage shall be deemed free of charge where it is performed without a fare and the carrier is not a professional carrier. However, where the carrier is a professional carrier, the carriage shall not be considered free of charge.

Article (366) An aircraft pilot may impose compulsory measures on all persons on board, and may decide to remove any person or items whose presence on board the aircraft might constitute a threat

-- 128 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 129 to its safety or prejudice to the order in the aircraft.

Article (367) An air carrier shall be relieved from liability if it proves that the entire damage is caused by the fault of the injured person. The carrier's liability may be reduced by the court where it is proved that the fault of the injured person has contributed to causing the damage.

Article (368) The plaintiff shall have an option to institute his case before one of the following courts: 1. The court within its jurisdiction the carrier's domicile is located; 2. The court within its jurisdiction the head office of the carrier's business is located; 3. The court within its jurisdiction the carrier has an establishment or legal entity which has entered into the carriage contract on its behalf; or 4. The court of the place of destination. Any stipulation bringing an amendment to the rules of jurisdiction, referred to hereinabove, shall be null and void, unless it is stipulated before occurrence of the damage in question.

Article (369) In case of consecutive carriage performed by several successive carriers, each carrier shall be deemed a party to the carriage contract with regard to the period performed by it. However, the carrier having entered into the consecutive carriage contract shall assume the liability for all the period agreed in the contract, even if it is not personally performed by such carrier in whole or in part.

-- 129 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 130

Article (370) The right to bring an action for liability against the air carrier or any of its subordinates shall not be heard after the lapse of two years following the day on which the airplane arrives or was supposed to have arrived, or following the day on which the carriage was stopped. Book Three Banking Transactions Part One Bank Deposits, Transfers and Accounts Chapter One Bank Deposits

Article (371) 1. A bank cash deposit is a contract whereby one person delivers a sum, by any means of payment, to the bank which undertakes to return it upon request or according to the agreed conditions. 2. A bank shall acquire the ownership of the money deposited, and shall be entitled to dispose of the money for the needs of its own business, with an obligation to refund the like to the depositor. Such refund shall take place in the same currency of deposit.

Article (372) 1. Save where otherwise agreed upon, the money deposit shall be refunded immediately upon request. The depositor may at any time dispose of the balance or any part thereof. 2. The said right may be conditional upon a prior notice or the expiry of a specific time limit.

-- 130 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 131

Article (373) Save where the deposit is intended for investment, a cash deposit shall be considered a debt and an offset may be conducted between it and a debt owed by the depositor to the bank, and any agreement to the contrary shall be null and void.

Article (374) Where the bank issues a saving deposit book, it shall be issued in the name of the person in whose favor the book is issued, and deposits and withdrawals shall be entered therein. The particulars entered in such book, which are signed by the bank's employee, shall constitute evidence for proving the said particulars between the bank and the person in whose favor the book is issued, and any agreement to the contrary shall be null and void.

Article (375) Unless otherwise agreed upon, deposits and withdrawals shall be conducted in any branch of the bank, or according to the methods and means approved by the bank with respect to opening accounts via modern means of technology.

Article (376) Where the depositor has several accounts in one bank or in the same branch of a bank, each account shall be deemed separate from the other(s), unless otherwise agreed.

Article (377) Subject to the provisions of Article (391) hereof, a deposit contract shall not entitle the depositor to withdraw amounts from the bank exceeding the sums deposited therein. Where the bank carries out transactions which cause the depositor's balance to be in debit, the bank

-- 131 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 132 shall forthwith inform the depositor of the same in order to adjust his balance.

Article (378) The bank shall send to the customer a statement of account once every month, unless otherwise agreed upon.

Article (381) Where the bank transfer is conducted between two branches of the same bank or between two different banks, every objection by third parties to this transfer shall be addressed to the

-- 133 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 134 branch or the bank where the beneficiary's account is opened.

Article (382) The transfer order may be conducted in respect of sums which are actually entered in the account of the person ordering the transfer, or in respect of sums which may be entered in such account within a specified period as is agreed with the bank.

Article (383) It may be agreed that the beneficiary may present the transfer order in person to the bank where the account of the person ordering the transfer is opened, rather than informing the bank of the same by the ordering person.

Article (384) 1. The beneficiary shall own the bank transfer value as of the time of being entered in the debit side of the account of the person ordering the transfer; and the latter may countermand the transfer order until the foregoing entry is made. 2. Where it is agreed that the beneficiary shall present the transfer order to the bank in person, the person ordering the transfer may not countermand the transfer, subject to the provisions of Article (389) hereof.

Article (385) The debt in settlement of which the transfer is made shall remain outstanding with its securities and supplements until the value has been actually entered in the credit side of the beneficiary's account.

-- 134 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 135

Article (386) It may be agreed to postpone the execution of specified transfer orders, whether they are sent directly by the person ordering the transfer or presented by the beneficiary, until the end of the day in order to have them executed with other orders of the same kind and presented to the bank on the same day.

Article (388) In case of death of the person ordering the transfer, the bank shall, as of the date on which the death comes to the knowledge of the bank, cease execution of the transfer orders issued by him. Where the beneficiary dies, the bank shall carry on the execution of the transfer orders.

Article (389) 1. Where the beneficiary is declared bankrupt, the person making the order may suspend the execution of the transfer order, even if the beneficiary has received it in person. 2. The declaration of bankruptcy by the person making the order of transfer shall not prevent the execution of the transfer orders which had been presented to the bank prior to the issue of the bankruptcy declaration judgment, save where the court decrees otherwise. 3. The provisions of the preceding two Paragraphs shall apply in so far as they do not contradict the Bankruptcy Law. Part Two Current Account

Article (390) A current account is a contract between two persons under which the rights and debts arising from their mutual relationship are converted into entries to be made in the account for which clearance shall be conducted, so that the final balance, upon the closure of the account, shall alone constitute a payable debt.

-- 136 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 137

Article (391) 1. A bank may open a current account for its customer where the transactions carried out by said bank are coupled with opening a credit or a credit facility in his favor. 2. It may be agreed that the account shall not be overdrawn from the customer's side with a continuously credit balance. It may also be agreed that said account shall be overdrawn on both sides, i.e. it could have a debit or credit balance with regard to both parties.

Article (392) In order for the payments to be entered in a current account, they must: 1. Be in cash or fungible items of one kind, so that clearance may be conducted between them; 2. Have arisen from debts that are actually existing and are of a specific amount; and 3. Have delivered to the payee on basis of ownership.

Article (393) The two parties may keep several current accounts, as long as each account is restricted to one specific kind of transactions or currencies.

Article (395) 1. All debts arising from business relations, as are conducted between both parties to the current account, shall by the operation of the law be entered in said account, save where such debts are secured by legal or contractual securities. 2. Debts secured by contractual securities, whether they have been established by the debtor or a third party, may be entered in the current account, where all the parties concerned have expressly agreed on such entry.

Article (397) Where the debts due to either party are entered in the current account, they shall lose their special characteristics and independent existence and shall neither, thereafter, be susceptible to settlement separately, nor to clearance, suing or lapse by prescription.

Article (398) 1. Where the entries of a current account contain cash debts evaluated in various currencies or non-fungible items, both parties may agree to have them entered in the current account; provided that they are entered under separate sections with due regard to the similarity of the payments represented thereby and that both parties allow the account to maintain its unity in spite of its several sections. 2. The balances of said sections shall be transferable, so that it would be possible, within the time limit specified by both parties or at most when closing the account, to conduct an offset between the various sections to extract a single balance.

Article (399) 1. Payments made by the customer into the current account shall bear no interests, unless otherwise agreed upon. The interest shall be calculated at the rate agreed upon. Where the rate of interest has not been fixed in the agreement, it shall be calculated on basis of such rate of interest prevailing in the market at the time of transaction up to (9%). 2. Interest shall apply to the debit balance as of the date of closure of the account, save where otherwise agreed upon.

-- 139 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 140

Article (401) A current account shall between a bank and its customer shall be deemed closed at the end of the bank's financial year. Such closure shall not be considered as a closure of the account; however, it shall remain open with its balance being carried forward to the same current account. The said account shall resume its operation on the next business day.

Article (402) Where the current account is closed, the balance shall be deemed a payable debt, unless both parties agree on otherwise, or where some of the transactions required to be entered into the account are still current and the entry would adjust the balance amount. In in which case, the balance debt shall be payable on the day following the date of the last entry required for such transactions.

-- 140 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 141

Article (403) The general rules prescribed for the limitation of actions shall apply to the debit balance and its interests.

Article (404) Where the sum of a debt entered into the account is released or reduced due to a reason after being entered in the account, such entry shall be removed or reduced, as the case may be, and the account shall be adjusted accordingly.

Article (405) A creditor of either party to the current account may garnish the credit balance of the judgment debtor at the time of the garnishment.

Article (407) 1. Where the proceeds of deducting a commercial paper is entered in the current account but the value thereof is not paid on the date of maturity, the person who deducted the instrument may remove the entry of its value into the current account by a counter entry, even if the person who presented it for deduction has been declared bankrupt. 2. A counter entry means an entry of a sum equal to the value of the commercial paper, plus the expenses, in the debit side of the current account. 3. A counter entry may be made only with regard to such commercial papers as have not been paid on their maturity dates. Any agreement to the contrary shall be null and void.

Article (409) 1. A bank loan is a contract whereby a bank delivers to the borrower a sum as a loan or enters such sum in the credit side in his account with the bank, as per the agreed conditions and time limits. 2. Banks shall obtain adequate securities or collaterals against loans granted by them. 3. A borrower shall repay the loan and its interest to the bank within such time limits and according to such conditions as agreed.

Article (410) A bank loan shall be considered a commercial activity irrespective of the capacity of the borrower or the purpose for which the loan is allocated. Chapter Two Bank Guarantee

Article (411) 1. A bank guarantee is an undertaking issued by a bank to repay the customer's debt to a third party, in accordance with the conditions agreed and included in the guarantee. The guarantee may be for a definite or indefinite term. 2. A bank guarantee shall constitute a joint liability.

-- 143 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 144

Article (412) A bank guarantee may be issued under different forms, including: 1. A bank signs a commercial paper as a reserve guarantor, or gives such reserve guarantee by a separate instrument to allow that several commercial papers are guaranteed together at one time; 2. An independent contract of guarantee is entered into; or 3. A letter of guarantee is addressed by the bank to the customer's creditor whereby the bank guarantees its customer's fulfillment of his obligations.

Article (413) A bank guarantee shall be considered a commercial activity, regardless of the capacity of the guaranteed person or the purpose for which it has been allocated.

Article (414) A letter of guarantee is an undertaking issued by the guarantor bank, at the request of one of its customers (the person making the order), to pay, unconditionally and without restrictions, a certain or determinable sum to another person (the beneficiary), unless the letter of guarantee is conditional where payment is requested within the time limit set out in the letter. The letter of guarantee shall state the object for which it has been issued.

Article (415) 1. The bank may require that security or guarantee be furnished against the issuance of the letter of guarantee. 2. The security or guarantee may be in cash or in the form of commercial papers, securities, goods or assignment of the right towards the beneficiary by the ordering person to the

-- 144 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 145 bank.

Article (416) A beneficiary may only assign his right that had arisen from the letter of guarantee to a third party with the approval of the bank.

Article (417) 1. A bank may not refuse payment to the beneficiary for a reason attributed to the bank's relationship with the person making the order or the relationship of the latter with the beneficiary. 2. Notwithstanding the provisions of Clause (1) above, the bank may refrain from payment to the beneficiary where an enforceable order or court judgment is rendered to impose seizure on the guarantee amount with the bank. In such case, in order for such order or judgment to be rendered, the person making the order shall rely for his claim on serious and confirmed grounds.

Article (418) 1. The bank shall be discharged vis-a-vis the beneficiary if within the validity period of the letter of guarantee no request for payment is received from the beneficiary, unless it had been expressly agreed to renew said term prior to its expiry. 2. The bank shall return to the person making the order the securities or guarantees provided by the same against the letter of guarantee where its effective term expires without the payment of the guarantee sum, unless otherwise agreed.

-- 145 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 146

Article (419) Where the bank pays to the beneficiary the sum agreed in the letter of guarantee, it shall subrogate him for recourse against the person making the order for the sum it had paid. Chapter Three Opening a Letter of Credit

Article (420) 1. Opening a letter of credit is a contract whereby the bank places at the disposal of the customer a certain sum, which the customer may withdraw as a single payment or multiple payments. 2. A letter of credit may be opened either for a definite or indefinite term.

Article (421) A contract for opening a credit is not considered a loan, and the customer shall not be bound to use the letter of credit opened in his favor.

Article (423) 1. The bank may not terminate the letter of credit before the expiry of the term specified therefor, except where the beneficiary dies, becomes legally incompetent or suspends payment, even though a judgment declaring his bankruptcy is not issued or he commits a gross fault in using the letter of credit opened in his favor. 2. Where the customer in whose favor the letter of credit is opened is a company, such credit shall expire also upon its nullification or expiration.

Article (424) Where a substantial decrease occurs to the real or personal guarantees presented by the customer, the bank may request an additional guarantee or reduce the letter of credit sum in proportion to such decrease.

Article (425) A credit may be transferred only with the approval of the bank which opened it.

Article (426) A contract for opening a credit shall be considered a commercial activity, regardless of the capacity of the customer or the purpose for which the letter of credit is allocated.

Article (427) The contract for opening a credit shall specify the maximum limit of the letter of credit sum and the method of using the letter of credit.

-- 147 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 148

Article (428) Where a credit is terminated pursuant to the provisions of this Chapter, the bank shall not be required to pay payment orders or cheques drawn on the letter of credit, as long as they are presented to the bank after the letter of credit is terminated. Chapter Four Documentary Credit

Article (429) 1. A documentary credit is a contract whereby a bank opens a credit, at the request of its customer (the person ordering the opening of the letter of credit), within the limits of a specified sum and for a definite term in favor of another person (the beneficiary), secured by documents representing goods shipped or intended to be shipped. 2. A documentary credit contract shall be deemed separate from the contract which caused the opening of the letter of credit, and the bank shall remain separate from such contract.

Article (431) 1. The documents regarding the opening of the documentary credit or its confirmation or notice thereof shall describe precisely the documents against which the operations of payment, acceptance or discount are executed. 2. A bank which opens a letter of credit shall execute the conditions of payment, acceptance and discount as agreed in the documentary credit contract if the documents representing the goods conform to the particulars and conditions provided for in the documentary credit contract.

Article (432) 1. A documentary credit may be revocable or irrevocable. 2. A documentary credit shall be irrevocable, unless it is expressly agreed to the contrary. 3. A documentary credit may either be divisible, transferable, indivisible or non-transferable.

Article (433) 1. A revocable documentary credit shall not create any obligation on the bank towards the beneficiary. The bank may at any time amend or terminate it of its own accord or at the request of the person who ordered the letter of credit to be opened. 2. Where the bills of lading presented are in conformity with the particulars and conditions contained in the documentary credit contract and within its validity term and prior to its termination, the bank and the person ordering the opening of the letter of credit shall assume the joint liability vis-à-vis the beneficiary.

-- 149 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 150

Article (434) 1. Where the documentary credit is irrevocable, the obligation of the bank shall be strict and direct to the beneficiary and to any bona fide holder of the instrument drawn, in pursuance of the contract which caused the documentary credit to be opened. 2. An irrevocable documentary credit may neither be terminated nor amended save with the agreement of all parties concerned.

Article (435) 1. An irrevocable documentary credit may be confirmed by a bank other than the one that opened it. Such confirming bank shall in turn assume an absolute and direct obligation towards the beneficiary and any bona fide holder of the instrument drawn in execution of the documentary credit contract. 2. A mere notice of the opening of an irrevocable documentary credit sent to the beneficiary through another bank, other than the one that opened the documentary credit, shall not be deemed to be a confirmation of the letter of credit by such other bank.

Article (436) 1. The documents shall be presented to the bank before the expiry of the letter of credit term. If the documents are presented beyond such a term, the bank shall reject them, unless the person ordering the opening of credit requests that the same be approved, and the bank approves the same. 2. The bank shall ascertain that the documents required are available and that their contents are in full conformity with the conditions of the letter of credit and that they fully conform with each other.

-- 150 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 151

Article (437) The bank is only obligated to examine the documents to ensure that, at first sight, are in conformity with the documents required in the letter of credit, but it is not obligated to check if the goods conform with the documents which represent them.

Article (438) Where the bank accepts the documents, it shall immediately send them to the person ordering the opening of the letter of credit, and where the bank rejects the same, it shall forthwith serve a notice of rejection to the beneficiary, indicating the reasons for such rejection.

Article (441) 1. A discount is a contract whereby a bank undertakes to pay in advance the value of a commercial paper to the beneficiary, in return for transferring the ownership of such commercial paper to the bank. 2. The bank shall deduct from the sum paid to the beneficiary of the discount an interest on the commercial paper amount, plus a commission. It may be agreed to effect the discount against a lump sum.

Article (442) 1. The interest shall be calculated on the basis of the time elapses from the date on which the commercial paper is presented for discount until its maturity date, unless otherwise agreed upon. 2. A commission shall be estimated on basis of the value of the commercial paper.

Article (444) 1. Where the value of the commercial paper is not paid or the customer becomes bankrupt, the bank may reserve for itself the right to make a counter-entry to the value of the commercial paper and the expenses in the debit side of its customer's account, who in his turn shall endorse the commercial papers to the bank. 2. Where the customer has no current account with the bank, he shall refund the commercial paper's value plus the expenses to the bank. Chapter Two Acceptance Credit

Article (445) Acceptance credit is a contract whereby a bank plays the role of the drawee. It accepts in this capacity a commercial paper drawn on it by its customer or another party who deals with such customer, and the bank undertakes to pay the value of such commercial paper on the maturity date.

Article (446) Where the bank pays the value of the commercial paper accepted thereby, it shall enter its value and the expenses in the debit side of the customer's account, and shall have recourse against the customer for the sums paid by virtue of the letter of credit opened in favor of the

-- 154 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 155 customer and used as a consideration for the payment of the commercial paper which it had undertaken to accept. Chapter Three Collection of Commercial Papers

Article (447) The bearer of a commercial paper may endorse it to the bank under a procuration endorsement. By virtue of such endorsement, the bank shall become an attorney-in-fact with regard to the collection of the commercial paper's value for the benefit of the endorser.

Article (448) Upon maturity of the commercial paper, the bank shall claim payment from the drawee or the executor. Where the payment is made, the bank shall enter the value of the commercial paper in the credit side of the customer's account, and if payment is not made, the bank shall make a protest or establish the non-payment, and in both cases the expenses shall be charged to the customer's account.

Article (449) 1. The bank shall be liable for fault or omission in the execution of its power of attorney. 2. The bank may require its relief from liability for delay in drawing up the protest. Such requirement shall be effective between the customer and the bank, unless an act of fraud or gross fault is attributed to the bank; however, such requirement shall not apply to other endorsers.

-- 155 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 156

Article (450) The power of attorney arising from the procuration endorsement shall not lapse upon the endorser's death or legal incapacitation. Part Five Transactions on Securities Chapter One Lending Against Securities

Article (451) 1. Lending against securities is a loan secured by collateral. 2. Where securities are nominative instruments, the pledge thereof shall be made in writing by virtue of an assignment stating that they are given as a guarantee, which shall be annotated on the instrument itself and entered into the records of the issuer. However, where the securities are bearer instruments, they shall be treated as tangible movables and the pledge thereof may be proved by all means of evidence.

Article (452) 1. The ownership of pledged securities shall be transferred from the pledger to the pledgee bank. 2. The bank shall may withhold such instruments.

Article (453) The bank shall maintain the pledged securities by collecting their profits and receiving their value upon amortization and deducting such sums from the principal debt.

-- 156 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 157

Article (454) Where the bank fails to receive its dues on the maturity date thereof, it may apply to the competent court to authorize it to sell the pledged instruments by public auction or at their price in the capital market, in order to collect its right from the sale price towards creditors, and any agreement to the contrary shall be null and void.

Article (455) Where the instruments are presented by a person other than the debtor, the owner thereof shall not be bound to pay the debt guaranteed by the pledge, except in his capacity as a guarantor in rem.

Article (456) A third party appointed by the two contracting parties to acquire the pledged instruments shall be deemed as having waived his right to foreclose the pledge for any reason prior to such pledge, unless he had reserved such right when he accepted to possess the instrument pledged for the account of the pledgee.

Article (457) Where the full value of an instrument is not paid at the time of being presented as a pledge, the debtor shall, upon maturity of the unpaid part, pay it at least two days prior to its maturity date, otherwise, the pledgee may appeal the court to sell the instrument, pursuant to the provisions of Article (454) above. The unpaid part shall be paid from the proceeds of the sale and the balance shall be retained as a collateral in lieu of the pledge.

-- 157 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 158

Article (458) The lien of the pledgee shall remain in the same ranking as between the contracting parties and vis-a-vis third parties over the profits of the pledged instrument, its interest, the commercial papers replacing it and its value if paid before its maturity date. Chapter Two Deposit of Securities

Article (459) The deposit of securities with a bank is a contract whereby the customer delivers to the bank the securities which have been agreed to be deposited and the bank gives the customer a receipt upon receiving such securities. Such receipt shall contain the contract conditions and the numbers of such securities; however, the said receipt shall neither represent the securities deposited nor replace them, but it serves as a mere instrument to prove the contract.

Article (460) 1. In safekeeping the securities deposited with it, the bank shall exercise such care as is exercised by a depository who receives remuneration and shall take to that effect all the precautionary measures as is required in the banking customs. Any agreement relieving the bank from such obligations shall be null and void. 2. The bank shall be held liable for the destruction or theft of such securities, save where such destruction or theft has resulted from a force majeure event.

Article (461) A bank may not use the securities deposited with it, whether by disposing thereof, pledging

-- 158 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 159 the same or exercising the rights derived therefrom, except with a special authorization by the customer to do so.

Article (463) 1. The bank shall be entitled to a remuneration against the obligations it assumes. Such remuneration shall, in the absence of an agreement, be determined according to the custom, subject to the number and value of the securities deposited. 2. As a guarantee for the bank's receipt of its due remuneration, it shall have the right to withhold the securities deposited and refrain from returning the same until recovery of its right, in addition to the lien prescribed by law over the expenses of safekeeping a movable property.

-- 159 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 160

Article (464) 1. The bank shall return the securities deposited with it on the demand of the depositor with due consideration to the time needed for preparation of the securities for such return. 2. The return shall be effected at the same place where the deposit was effected. The bank shall return the same securities deposited and not securities of the same kind with different numbers, unless it is agreed to return securities of the same kind or other securities or unless the law requires otherwise.

Article (465) The return of securities shall be to the depositor in person, his legal representative, his heirs or his special attorney, as the case may be, even if the security contains something indicating that it is owned by a third party.

Article (466) 1. Where the bank loses possession of securities for a reason beyond its control, it may file a claim for recovery of the same against the person who acquired them. 2. Where financial securities made to the bearer are lost or stolen, the bank shall inform the issuer of such securities of the fact and instruct it to refrain from paying the profits or value of said security to any person who shall claim therefor in case of redemption or maturity.

Article (467) Where an action is brought for the maturity of the securities deposited with the bank, the bank shall send notice directly to the depositor accordingly and shall abstain from returning the securities to him until the action is adjudicated by the court.

-- 160 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 161 Part Six Commercial Transactions of Islamic Financial Institutions Chapter One General Provisions

Article (468) 1. The provisions set forth in this Part shall apply to commercial transactions and contracts to which Islamic financial institutions are a party. 2. For the purpose of this Part, Islamic financial institutions shall mean any institution whose Articles or Memorandum of Association provides that it is conducting its business activities in compliance with the Rules of Islamic Sharia, including any financial institution that conducts part of its business in compliance with the Rules of Islamic Sharia, under a license from the competent authorities, in relation to such business.

Article (469) Save as specifically stipulated in this Part, the provisions of this Law and of the relevant laws shall apply to commercial transactions and contracts concluded in compliance with the Rules of Islamic Sharia.

Article (470) The provisions contained in this Part shall be interpreted and construed according to Sharia standards and controls issued or approved by the Sharia Supervisory Board set forth in Federal Decree-Law No. (14) of 2018, without prejudice to the provisions of this Law.

-- 161 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 162

Article (471) The Board of Directors of the Central Bank shall issue the regulations and statutes that lay down the controls and rules of commercial transactions of Islamic financial institutions and Takaful companies, licensed by such institutions, and which conduct all or part of their business activities in compliance with the Rules of Islamic Sharia, after being approved by the Sharia Supervisory Board set out in Article (470) above.

Article (472) The following transactions, whenever carried out by an Islamic financial institution, shall constitute commercial transactions governed by the Rules of Islamic Sharia: 1. Deposit; 2. Investment account; 3. Takaful insurance; 4. Islamic financing instruments; 5. Investments; and 6. Any transaction where any statute in force provides that it is governed by the Rules of Islamic Sharia.

Article (474) Financial obligations arising from commercial transactions and contracts governed by the provisions of this Part shall be of specific and definite sum, and shall be deemed debts whose sums may not be increased where their maturity dates are deferred, and any agreement to the contrary shall be null and void. Chapter Two Special Provisions for Certain Types of Contracts and Obligations to which Islamic Financial institutions are a Party Section One Promise to Contract

Article (475) 1. A promise to contract is an undertaking by a contracting party to enter into a certain contract in the future, and such undertaking shall be binding only on the promising party. 2. Where the promising party fails to fulfill the promise without an acceptable excuse, he shall compensate the promised party. The compensation in such case shall be limited to the amount of direct actual damage sustained by the promised party.

-- 163 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 164 Section Two Installment Sale

Article (476) For the purpose of this Section, an installment sale shall mean every sale conducted for the purpose of finance or representing part of a financial transaction, whereby a non-monetary asset is exchanged for a deferred monetary value to be paid over an extended period of time. Once the contract is executed, the sold item's ownership shall be transferred to the buyer, and the seller may not retain the sold item's ownership until the price installments are paid, in whole or in part, and any agreement to the contrary shall be null and void.

Article (477) The installment sale provisions set forth in this Section shall be applicable if it is agreed under the contract that the property ownership burdens, or the risks of its loss or deficiency for a matter beyond control would be transferred to the contracting party once the property is delivered to the same, even if the contracting parties call the sale a lease.

Article (478) 1. The sold item's price, properties, form, volume and other distinguishing features thereof shall be specified upon signing the contract, and no agreement to contrary may be made. 2. The sold item's price shall be fixed as provided for in the contract, and no increase in price may be stipulated where the payment of installments is delayed for any reason whatsoever, and any agreement to the contrary shall be null and void.

-- 164 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 165

Article (479) Where the contracting parties agree that the sale would be made at the market price, the price shall be fixed at the time and place where the contract is made. In case of multiple market prices, the average price shall prevail. No agreement may be made to fix the price or enter into a contract based on the market price in the future or to be fixed on the basis on a variable indicator.

Article (480) The contracting parties may agree to authorize a third party to fix the sold item's price to the best interests of both parties; provided that such price be fixed at the time of signing the contract. Section Three Murabaha

Article (481) Murabaha is a contract whereby a seller sells an asset to a buyer after being owned and possessed by the seller, either ipso facto or ipso jure, based on a finance application by the buyer. Such sale shall be conducted at cost plus a fixed profit sum, as set out in the contract, and the total value thereof shall constitute the Murabaha sale price.

Article (482) 1. The Murabaha sale price shall, after the contract is concluded, be fixed, and may not be variable or associated with an indicator or otherwise. 2. An agreement may be made to pay Murabaha sale price in installments, based on

-- 165 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 166 installments of a specific sum and specific payment term, or at a single payment on a specific date. Section Four Istisna'a (Manafacture Contract)

Article (483) Istisna'a is a contract whereby a seller sells to a buyer, based on description, an item required to be manufactured, against a fixed lump-sum set out in the contract. The sold item's sort, type, quantity and properties shall be indicated in the contract, along with the future delivery date thereof.

Article (484) A seller involved in an Istisna'a contract shall provide both the work and the manufacturing materials, and may manufacture the sold item by itself or may assign the same to third parties under a contract independent of Istisna'a contract.

Article (485) 1. The sale price, after the contract is concluded, may not be variable or associated with an indicator or otherwise. 2. An agreement may be made to pay Istisna'a sale price in installments of specific sum and specific payment term or at a single payment on a specified date.

Article (486) 1. The sold item shall be handed over on the maturity date as agreed in the contract. A free-

-- 166 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 167 defect delivery may not be stipulated and any agreement to the contrary shall be null and void. 2. Where the sold item is delivered and some of its properties are materially different, as per the customary practices, the buyer shall have the option either to receive and accept the sold item or terminate the contract and pay the price or the paid portion thereof back to the seller, or both parties may agree on a new price to be fixed in a timely manner.

Article (487) The Istisna'a contract may include a stipulation that the buyer shall be entitled to compensation if the seller fails to timely deliver the manufactured item, based on an sum to be agreed in the contract; save where the delayed delivery is not attributed to the seller or is caused by an unavoidable accident. Section Five Salam

Article (488) Salam is a contract whereby a seller sells to a buyer property based on future delivery, without requiring the manufacture thereof at an advance price.

Article (489) 1. The price in the Salam contract shall be of a specific quantity and type and shall be recorded in the contract, and the period of its future delivery may not exceed (3) three days. 2. Debts may not serve as a price in the Salam contract.

-- 167 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 168

Article (490) 1. The sold item's sort, type, quantity and required specifications shall all be indicated in the Salam contract, along with the date of delivery, whether the seller provides the sold item by his own or buys it from a third party under a contract independent of the Salam contract. 2. The Salam contract shall create an obligation on the seller to deliver the sold item and not its price. The sold item delivery upon maturity shall be conducted as agreed in the contract. Neither a free-defect delivery nor a penalty on the sold item's late delivery may be stipulated in the contract, and any agreement to the contrary shall be null and void. Section Six Ijarah [LEASE]

Article (491) Ijarah is a contract whereby a lessor leases out specific or described property owned by the lessor or leased from the same against either a fixed rent set out in the contract or a variable rent to be paid at one payment or in installments of specific sum and dates.

Article (492) Specific property may be leased out only after being owned, leased or received by the lessor.

Article (493) A promise may be given to the Lessee to transfer thereto the title to the leased property upon expiration of the ijarah term or as mutually agreed. The title transfer shall not be stipulated in the ijarah contract, but shall be conducted under a separate contract to be concluded in due

-- 168 of 239 --

Federal Decree by Law No. (50) of 2022, Promulgating the Commercial Transactions Law 169 course.

Article (494) The rent shall be variable for each lease term set out in the contract; however, the first lease term rent shall be specified in the contract in a specific sum. The rent of every subsequent term shall be calculated before the commencement thereof according to a certain indicator or criterion that the parties to the contract have no influence over the determination of its price. Such indicator or criterion shall be based on a maximum and minimum limit to be stipulated in the contract. Where a lease term begins, the rent thereof shall not be variable.

Article (496) The provisions set forth in the Law of Finance Lease shall apply to any ijarah where no particular provision is stipulated in this Chapter. Chapter Three Islamic Banking Transactions