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GBU 3302
Legal Environment

Case #3
The check, New Commercial Code, and Commercial Courts in Morocco

Zineb Kamri
Laila Magroud
Sanae Outifa
Ghita Laghrari Idrissi

Supervised by: Maitre Benlamhidi

Spring 2008
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Table of Contents

Introduction

I. The Check

1. History of the check

2. Definition of the check
3. The checks components

II. The Moroccan Commercial Code

1. Overview
2. The first book: The Merchant
3. The Second Book: The Goodwill (Fond de Commerce)
4. The Third Book: The Commercial papers (Les Effets de Commerce)
5. The Fourth Book: The Commercial Contracts

III- The Commercial Courts

1. The Commercial Courts

2. The Procedures Followed in the Commercial Courts

IV- The Commercial Courts of Appeal

1. The commercial Courts of Appeal

2. The Procedures Followed in the Commercial Courts of Appeal
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The Check:

A check is a written order ordering a bank to pay money. It is a commercial paper

issued by an account holder to his or her banker to pay a specified sum of money to the bearer

or named recipient. It is not a legal proposal but it is a legal document. It was first used in the

late seventeenth century; however, its usage did not start to expand until after the mid 1960s.

This was mainly due to the marked increase in the number of bank account holders and

checks1.

Although checks were first used in the late seventeenth century, they did not come into

general use until the second quarter of the nineteenth century. However, their usage did not

start to significantly increase until after the mid 1960s when there was a marked increase in

the number of bank account holders and check guarantee cards were introduced. The check

guarantee card provides a guarantee to the retailer that the check he is accepting in payment

for goods will not be dishonoured through lack of funds provided he, the retailer, has fulfilled

his responsibilities laid down in the guarantee scheme It is a requirement that banks and

building societies provide personal customers with details of "how the clearing cycle works,

including when you can withdraw money after paying cash or a check into your account, and

when you will start to earn interest". The date when funds can be withdrawn is often referred

to as the "cleared" date, and the day from which funds begin to earn interest the "value" date

(this may be one or more business days prior to the "cleared" date).

The main types of checks are: Ordinary checks, crossed checks (chque barr),

Certified checks (chque certifi), Chque vis (check insuring the availability of the funds),

Travelers checks (Chque de voyage), and Postal checks (chque de poste).

1
http://www.apacs.org.uk/about_apacs/htm_files/chequecred.htm
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Nowadays, cheque fraud is considered to be one of the most widespread financial

crimes, and it is increasing year after year. Cheques are the most used form of payments,

which is why fraud is increasing yearly. There are three main types of cheque fraud:

Counterfeit: cheques not written or authorized by legitimate account holder.

Forged: Stolen cheque not signed by account holder.

Altered: an item that has been properly issued by the account holder but has been

intercepted and the payee and/or the amount of the item have been altered. 2

Commercial paper is a type of short-term negotiation of payment, usually an

unsecured promissory note.(Baxter, 1969)3 The date to repay the money back is usually

specified and fixed. Commercial papers are generally issued by major firms. Since these firms

have a good credit rating, their notes are immediately accepted without a need for collateral

backing. It is considered an important source of cash for the issuing firm; it supplements

bank loans and is usually payable at a lower rate of interest than the prime

discount rate.(Baxter, 1969)4 Commercial papers include promissory notes, drafts, bills of

exchange and checks, acceptances, bills of lading, warehouse receipts, orders for delivery of

goods, and express orders.

The Moroccan Commercial Code:

Briefly, the Moroccan Commercial code can be described in the following

points. Actually, the first chapter of the new commercial code deals with the activities of the

merchants including all the rights and duties implied with his function. In fact, this new code

has put much more emphasis on the commercial registry, the way it is organized and

regulated. The second chapter analyses the goodwill and all the matters related to it including

conflicts. Indeed, it cites its elements and all the operations that could concern any goodwill

including buying and selling and contractual agreements. The third chapter is about
2
http://www.cibc.com/ca/commercial/business-insights/avoid-cheque-fraud.html
3
http://www.encyclopedia.com/html/c1/commerc-p.asp
4
http://www.encyclopedia.com/html/c1/commerc-p.asp
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commercial effects; that is all the consequences resulted from selling and buying operations

and the regulations underlying them. The next chapter treats commercial contracts and all the

actions related to them. In other words this chapter deals with banking contracts and

commission contracts. The fifth chapter concerns difficulties that firms face and provided

procedures for prevention as well as conflict management.

In more details, it can be said that there are two forms of rules form the Moroccan

commercial code. The first one defines the merchants status and the conditions to access and

perform his/her profession. The second one regulates the activities that are not exclusively

specific to the merchant (Droit commercial, p.8, 2003).

1. Organization of the commercial courts:

1. President,

2. Vice President

3. Judges.

4. A public prosecutor procureur gnral du Roi and his assistants.

5. secretary of the public prosecutor.

6. Register of the court

2. Types of the commercial Code:

o Maritime Commercial Code:

Created in 1919, this code regulates the maritime navigation, dictates the rules related

to the ship or boat and finally, controls the shipment and insurance contracts.

o Terrestrial Commercial Code:

This type within the commercial law was written in 1913. It is separated in two main

pieces. The first one regulates commerce in general and the second one regulates bankruptcy

cases. (Les Societs en droit Marocain, p.17, 1988)

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As a result of the French colonial influence, Morocco separated a new commercial law

from the Sharia. This separation resulted in two separate bodies of law, modern law and

Islamic law. The modern law is based on the French civil law codes and practices. Actually,

some French codes written in the early 1900s are still applied, and other laws have been

inspired by French codes of other nations, such as the Commercial Code, and the Code of

Obligations.

In Morocco, all laws and legislation must be promulgated by Dahir (royal pronouncement)

and published, usually in the Official Bulletin in both French and Arabic. The hierarchy of

Moroccan legislation is somewhat confusing; while codes are clearly superior, inferior laws or

regulations may trump those laws appearing to have supremacy, including acts of Parliament.

For our purpose, Law n 15-95 constitutes the commercial code, promulgated by Dahir n

1-96-83 of 15 Rabii 1417 (August 1st, 1996), (Official Bulletin n 4418 of 19 Joumada I 1417

(October 3rd, 1996).

The commercial code is divided into five main Books (Livres) that summarize all

articles dealing with different aspects of commercial practices, and giving all the information

about how things are to be done and the laws related to any violation of the rules.

The following are the main Books including all the chapters and articles related to

commercial code.

Book I: The merchant

- First Title: General dispositions

Under this section, there are the five first articles (1-5) that mainly summarize the

commercial writs and procedures, and merchants. They emphasize the importance of the

customs and usages of commerce. It also specifies that the obligations of a commercial

contract among merchants, or merchants and non merchants are normally barred at the end of

five years.
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- Title II: Acquisition of merchant quality

This section includes articles (6-11), that specify the details about the habitual or

professional activities and practices that attribute the quality of merchant to somebody, and

these practices are summarized into eighteen different activities that involve the buying and

selling of real estate, renting, industrial activities, transportation, banking, insurance services,

intersession, publication, building, public agencies, supplying, organization of public shows,

bidding, water and electricity services, and mail and telecommunication. Article 11

summarize all this by citing that any one who habitually practices a commercial activity is

renowned merchant.

- Title III: Commercial capacity

Articles (12-17) deal in this section with the capacity for commercial practice. We can

understand from these articles that commercial capacity is related to personal statute. There is

also clear information about aging (20 years old) and the importance of adultness as an

important characteristic for a merchant, even for foreigners who must obey to Moroccan law.

Otherwise, an authorization of the president of the court must be taken and registered in le

registre du commerce. Women have also the right to practice commerce without need for

husbands permission.

- Title IV : Merchant Obligations

This title specifies the importance financial obligations and the conservation of

correspondences. Any merchant should have a bank account, and should keep the

correspondences of transactions documents because they are strong proofs that would be in

his favor. The original correspondences of a party and copies of them sent to the other, should

be kept and reserved for ten years starting their dates.

This section deals with different aspects of le registre du commerce, which is composed

of two main kinds of registers, the local registers and the central register. The local register is
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held by the registry secretariat (secretariatgreffe) of the competent court, and it deals with

formalities. On the other hand, the commercial central register is held by the administration,

and it centralizes, for the whole country, the information mentioned in different local registers.

The next, section specifies information on the process of inscriptions in the commercial

register, including general dispositions that mention the necessity of registration or licensing

and its obligation on all Moroccan as well as foreign agencies, and the states commercial

agencies.

In general, all groups with economic interests must be registered in the commercial

register.

As far as registrations (Les immatriculations) are concerned, this process should be

requested by the merchant, and in the case of a company it is requested by members of the

administration or the director. The request for registration must be deposited in the registry

secretariat (secretariatgreffe) of the court of the city the head office is located, to be

registered in the local register.

Book II: The fonds de commerce

- Title 1: Elements of fonds de commerce

The fonds de commerce is any property and its related components used to engage in

one or more commercial activities. It also includes customers and all other goods necessary

for operation like the commercial name, the commercial local, merchandise, equipment,

licenses, etc.

- Title II: Contracts involving fonds de commerce

Any sale or termination or of fonds de commerce need to be included in a written

contract that should list things like the name of the seller, the date and nature of the sale, the

price, etc. If any of these elements is missing or false, the buyer has the right to cancel the
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contract during the period of 1 year after the date of the contract. A copy of the act is then

recorded in the commercial register.

Book III: Effects of commerce

- Title I: The bill of exchange

The bill of exchange has to include specific elements such as the name of the payer, the

amount, the date of issuance, or the place of where the bill is to be cashed. If one of these

elements is missing, the bill of exchange is considered invalid except for some exceptions like

for example, if the place of payment is not indicated, we consider the place where the

practices his activities.

It can be specified in the bill of exchange, that interest payments are to be imposed. A bill of

exchange given to a non business minor is invalid. Fake signatures also make the bill of

exchange invalid.

- Title II: Promissory note

Promissory notes, just like bills of exchange, need to have specific elements that make it

enforceable such as the name of the drawer and of the drawee, the date and place of payment,

the amount, etc. If one of these elements is lacking, the promissory note is invalid except for

some exceptions, for example, if no date of payment is indicated, the note can be cashed

immediately.

- Title III: Cheques

The cheque needs to contain specific elements in order for it to be valid and enforceable,

such as the amount of the cheque, the name of the giver and of the receiver, and the date of

issuance. If one of these components is missing, the cheque is invalid except for some

exceptions. The giver of the cheque has the responsibility of ensuring payment and may be

punishable for insufficient funds. Fake signatures are also punishable and make the cheque

invalid.
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- Title IV: Other ways of payment

The order or the commitment to pay given as a mean of payment is irrevocable.

Opposition can be made to the payment only in the case of loss or theft of the means of

payment, rectification or bankruptcy of the recipient.

The next cases are punished for, those who will have counterfeit or falsified a means of

payment. Also those who, with full knowledge of the facts, have made or tried to make use of

a means of payment, counterfeits or falsified; as well as those who, with full knowledge of the

facts, will have agreed to receive a payment by a means of payment, counterfeits or falsified.

Book IV: Commercial contracts, general dispositions

Commercial matter is free but it must be brought back in writing when the law or

convention requires it.

Within the part commercial obligations, which discuss the warranty, there are two kinds of

hypothecation: the pledge which supposes the dispossession of the debtor and the

hypothecation without dispossession.

- Title II: Commercial Agency

The contract of trade agency is authorized to a person who is not bound by a contract

of employment and who could negotiate and be involved in commercial deals with tradesman,

a producer or another sales representative. S/he could be a sales representative of a party but

without representing concurrent companies.

The contract of trade agency can be concluded for one given duration or one unspecified

duration. The contract at given duration that the parts continue to carry out after the expiry of

this duration becomes a contract at unspecified duration. Each part can put an end to the

contract at unspecified duration by giving to the other a notice.

For any commercial deal concluded throughout contract, the sales representative is

entitled to a commission when the operation was concluded thanks to its intervention.
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The compensation allowance of the sales representatives is not due when the rupture of the

contract is caused by the serious fault of the sales representative; when he has reasons to not

continue its activity because of its age, of an infirmity or a disease; or even when, after in

being agreed with a party, the sales representative yields to a third its contractual rights and

obligations.

- Title III: Le courtage intermediation

Intermediation is the convention by which a person charged an intermediary seeking

another person to create a deal of relationship for concluding of a contract.

- Title IV: Commission

The commission is the contract by which the commission agent receives capacity to act on

his own name on behalf of the principal party.

The commissionaire rights: The thirds can oppose to the commission agent, all the means of

defense resulting from their personal reports. They do not have any direct action against the

principal party.

The commissionaire obligations: The commission agent must carry out himself the orders

which it receives. The principal party can exert directly against the thirds all actions born of

the contract passed through the commission agent.

- Title V: Leasing (Le crdit-bail)

The subjects treated by this title are related to the parties of the hiring purchase contract. It

deals with the rights acquired by the tenant and the owning of what is given according to that

contract. It also states the case of incompletion of the contractual obligations related to the

payments. It gives us the solution in case of the incompletion of the leasing contract. The

operations of leasing must be published to allow the identification of the parts and goods

which are the subject of these operations.

- Title VI: The Shipment

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Title VI is about the transportation of things, they explain the rules that regulate this type

of contracts such as the transport document that comprises the address, the characteristics of

the transported things and other details. It talks also about the break of the shipment and its

regulations. It deals also with the case of loss or damage and its responsibility.

- Title VII: Banking contracts

This title deals with the banking account and states its three types, the deposit of funds,

and the deposit of titles. The first section about the banking account treats the different issues

related to the common provisions to the accounts at sight and in long term, the account at

sight, and the account in long term. It also explains the contract by which people can place

their funds that is a contract by which a person deposits funds with a banking house and

confers to him the right to lay out about it for its own account to load to restore them under

the condition envisaged with the contract. There is also the deposit of titles that consists of

transferable marketable securities in financial institutions as banks.

Book V: Difficulties of the Enterprise

- Title I: Procedures of prevention of the difficulties

Concerning this title it treats the procedures of the internal and external preventions of the

complications faced by companies and enterprises. It describes how enterprises, having

problems to compromise the continuity of the exploitation, try to solve this problem on their

own which is known by the internal prevention. And the involvement of the court in the

external prevention and the amicable settlement, which is a procedure opened to every

undertaken commercial or artesian which, without being in suspension of payments, has a

legal difficulty, economic or financial or needs not being able to be covered by a financing

adapted to the possibilities of the company.

- Title II: The procedures of treatment of the difficulties of the company

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This section explains how enterprises go through the treatment of their difficulties; it

includes the conditions of opening, the legal rectification that involves the business

management, and the choice of the solution. It gives details the involvement of the business

management such as the continuation of the exploitation which means that the activity of the

company is continued after the delivery of the legal rectification, the capacities of the head of

the company and the syndic, and the preparation for the solution. The choice of the solution

involves the continuation plan and the auditing of the liability.

- Title III: Judiciary liquidation

The judiciary liquidation procedure starts when the enterprise situation is compromised.

The judgment that pronounces the judiciary liquidation takes full right of the dessaisissement

for the administrations debtor and of its goods disposal, even those that he acquired before

the closing of the judiciary liquidation. The rights and actions of the debtor concerning his

heritage are exercised during the whole length of the judiciary liquidation by the syndic.

When the general interest or the creditors interest necessitates the continuation of the

business activity subject to judiciary liquidation, the court can authorize this continuation for

a length that it sets up, either at the syndics request or the prosecutor of the Kings request.

The judiciary liquidation does not induce the cancellation of the buildings affected by the

business activity. In this case the syndic has fully the right to continue or to abandon the lease

under the contract condition.

The buildings selling are done following the rules of property seizure. Nevertheless, the

judge commissioner sets up the price, the main selling conditions, and he determines the

advertising methods, after the collection of the inspectors observation, the business director

and the syndic. Generally, the syndic transmits some acquisition offers and fixes the deadline,

so each person interested can submit its offer. Neither the debtor, nor the law leader of the

person engaging in judiciary liquidation, nor a parent of these, until the second degree
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inclusively, can carry themselves buyer. The judge commissioner, after having heard the

business director, the inspectors, the owner of the local in which the production unity is

exploited, chooses the most attractive and most serious offer and that will ensure in the best

conditions the employments durability and the creditors payment. After gathering the

inspectors observations, the judge commissioner orders the auction selling. If the syndic

authorized by the judge commissioner can by paying the debt, withdraws the constituted

goods as a security by the debtor or the withheld things. The syndic has 6 months after the

judgment start to realize the deal.

The rights of the creditors, that are partially involved on the distribution of the buildings

price, are regulated by the remaining amount of the real estate collocation. The exceeded

dividends that they perceived in previous distributions in comparison with the calculated

dividend after collocation is kept on the amount of their collateral collocation and is

included in the amount of money to divide up.

At any time the court can close the judiciary liquidation. :

-When the syndic has access to the sufficient sums to pay the creditors.

-When the pursuit of the judiciary liquidation operations is impossible because of the

insufficiency of the active.

The parties in the procedure:

The court designates the judge commissioner and the syndic. No parent of the director of

the business or one of its members boards can be designated as a judge commissioner or

syndic.

1. The judge comissioner

The judge commissioner is in charge of a good and rapid functioning of the procedure and the

protection of the interest of the sides involved.

2. Syndic
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-The syndic is in charge of guiding the judiciary operations from the beginning until the end.

-He oversees the execution of the continuation plan.

- The syndic proceeds to the verification of the credits under the judge commissioner control.

-The syndic informs the judge commissioner to the well functioning of the procedure.

-Even the prosecutor of the king can contact the judge commissioner and inform him of any

information that can be needed in the procedure.

-The syndic can be replaced by the judge commissioner either officially or by a complaint

from the debtor and the creditor.

3. The inspector

-The judge commissioner designates one to three inspectors among the creditors that do the

request.

-The inspectors can be physical persons or moral persons.

-When the judge commissioner designates several inspectors, it makes sure that at least one of

them is chosen among the safest tenured creditors cranciers titulaires de surets.

- No parent of the business director can be designated as an inspector.

- The inspectors attend the syndic in its functions and the judge commissioner in his

supervision mission of business administration

-They are informed of all the transmitted documents to the syndic

-They inform the creditors in each step of the procedure.

-The inspector performs his function without being paid.

-The court can revoke the inspector by a suggestion from the judge comissionary or the

syndic.

- Title IV: The penalties of the business director

The patrimonial penalties :

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The money versed by the business directors enter into the business patrimony. So in case of

liquidation, the money is divided up between all the creditors.

In case of business judiciary liquidation, the court must start a procedure of the judiciary

liquidation against each director that can raised one of the following facts:

1) Having used the goods of the business as its own.

2) Under the companys cover, having done some acts that have personal interests.

3) Having used the goods or the companys credit for a personal use or a use that can harm the

company or to favorise another company interested on directly or indirectly.

4) Having provoked the disappearance of some financial documents.

5) Having hide all or part of the active

6) Having held an obviously incomplete or irregular accounting.

Brankruptcy penalties:

People accused for having provoked the bankruptcy are:

1) Having the intention to avoid or delay the procedure either by making some purchases and

reselling them illegally or by using costly means to obtain funds.

2) Having dissimilated all or part of the debtor active.

3) Having provoked the disappearance of some financial documents.

People that are involved or that have contributed directly or indirectly to the bankruptcy have

to pay fine between 10.000 to 100.000dhs and an imprisonment of one to five years.

The commercial code in Morocco is established by the royal decree nb 1-96-83 of 15 rabii

1417 (August, 1st 1996) under the law n 15-95 that constitutes the commercial code.

It has 6 sections that are

Section I: The merchant

Section II: The goodwill

Section III: IOUs

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Section IV: Companys difficulties

Section V: Companys difficulties

These sections aim at regulating each of the mentioned sectors of the Moroccan commercial

affairs.

Section I: The Merchant (le commerant)

The first section regulates the commercial acts and the terms conducted by the

merchants.

It also looks at the terms of the contracts established between the merchants on both the

judicial form and the legal requirement of these contracts considering the nature of law that

needs to be enforced as either commercial or civil. (article 4)

In this section, the commercial law starts by defining what the law means by merchants as

well as their activities: the commercial code states that the merchant is any person buying or

renting assets or goods for the purpose of selling them directly or after further processing.

The fields of activities as defined by the Moroccan commercial code handcraft,

industry, mining, banking and insurance, brokerage.

The legislator also assesses the rights and duties of the parties forming the contracts ( Titre IV,

Those are concerned mainly with the obligations of opening an account for the

merchant, the accounting obligations as the merchant is required to hold a regular accounting

and submit all the documents related to them (journal and financial statements) and the

binding rights of the merchant vis--vis the commercial register.

The commercial code also regulates the terms of the contracts between the merchants in terms

of both the form and the content.

Section II: The Goodwill

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In this section, the legislator starts by defining the goodwill (le fond de commerce) as

being an intangible asset used for the purpose of exerting one or more commercial activities.

The goodwill corresponds to the customer and the consumer definition. The goodwill takes

into account all the components that constitute it such as the brand name, the name of the

company, right of lease, usage of symbols and advertising logo, as well as assets and activities

that serve for the exploitation of the goodwill. In addition, the licenses and copyrights are

further components of the goodwill.

The commercial code further assesses the articles that regulate the usage of the

goodwill, and the contractual parts assessing the value of the goodwill in case of sale or rent.

(second title of the commercial code section II: Goodwill). In this section, the commercial

code dictates the right and obligations of each party of the contract; those are related to the

obligations vis--vis the commercial register and again to the valuation of the goodwill in

both case of simple sale or liquidation of the company.

Section III: IOUs (Les effets de commerce)

The IOUs are means of payment in Morocco among others. The commercial code

states the laws regulating their usage and here we present some rules that need to be taken into

consideration in the commercial affairs:

A check that has an amount of over 10 000 Dhs should be done by transfer or a barred

check.

The commercial code is also concerned with the laws regulating the checks: as a

default or frauding usage can result to an imprisonment of 2 to 5 years or fine amounting to

10 000 Dhs.

Section IV: Commercial Contracts: the regulating procedures

The whole section deals with regulating the contractual relationship between the

parties.
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It states the components of the contract according to the Moroccan law, the form of the

contract as well as the criteria that need to be fulfilled in order to have a valid contract.

The law obliges the contracts to be written as well as the proofs advanced by each party in the

contract.

There is solidarity of parties in the contract, and considered as obligation

The consideration is not mandatory but needs to be mentioned in case the parties agreed on it.

The law states that the consideration may have a monetary as well as asset value and regulates

the form of the consideration

Further in this part, the law defines the commercial agency, and the contractual agreements

constituting this agency. It also regulates the activities of the brokerage and the commissioner

activities.

Section V: The Difficulties of the Company

The laws purpose is to regulate the commercial affairs and the affairs of the company

in a more specific way to protect its rights and the rights of the creditors.

The law defines the state of bankruptcy and the procedure that the judge undertakes in this

case to ensure the obligations and the rights of the company and its creditors.

But before, going through the procedures of the liquidation of the company, the court takes

some measures to prevent its bankruptcy.

The code encourages the resort to alternative means of disputes such as negotiations,

intermediation, and arbitration and states the procedures and steps that need to be considered

in each one of them. The purpose is of matter of privacy for companies and to preserve their

reputation.

The law further process the affairs related to the companys management again to

prevent its collapse and to maintain it as a vital factor contributing to the progress of the

national economy.
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Commercial law:

The commercial law is related to traders and to the act of trading. In fact it is related to

anything concerning the trade. In commercial matters, the commercial law shall apply: It

allows people to make the contract they want. Provided that where no provision is made in

such law, the usages of trade or, in the absence of such usages, the civil law shall apply.

In 1996, a new Commercial Code took into consideration officially the right of

women to engage in business and enter into employment contracts. In 1998, a ministerial

department was created to focus especially on the status of women in Morocco, with a greater

gender focus also implemented in other ministries. In addition, thirty seats were reserved for

women in the 2002 legislative elections, increasing female representation in Parliament from

0.5 percent to 10.8 percent.

The following are acts of trade:

Any purchase of movable effects for the object of reselling or letting them, whether in

their natural state or after being worked or manufactured; any sale or lease of

movable effects, in their natural state or after being worked or manufactured, when the

purchase there of has been made with the object of re-selling or letting such effects;

Any banking transaction;

Any transaction relating to bills of exchange;

Any time-bargain in securities;

Any transaction relating to commercial partnerships or to shares in such partnerships;

Any transaction relating to vessels and navigation;

Any undertaking relating to supplies, manufacture, construction, carriage,

Insurance, deposits, public entertainment and advertising.

Any purchase and any re-sale of immovable property, when made with the object of

Commercial speculation, and any building enterprise

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Any transaction ancillary to or connected with any of the above acts.

Obligations arising from collision of vessels, assistance or salvage in case of

wreck, stranding or abandonment, from jettison or average are likewise

commercial matters.

Presumption as to nature of act done by trader.

Every act of a trader shall be deemed to be an act of trade, unless from the act

itself it appears that it is extraneous to trade.

Any person capable of contracting may trade, unless the law precludes him

from carrying on trade.

A minor who has attained the age of sixteen years, may trade and shall be

deemed to be a major with regard to obligations contracted by him for

purposes of trade.

The Moroccan insolvency framework was entirely overhauled in 1996 with the

adoption of a new Commercial Code. Both liquidation and reorganization procedures are

available under the new system, as well as a more informal pre-insolvency scheme, in

compliance with international best practice. The rights of creditors in the proceedings are

however limited, which impedes the effectiveness of the new system in a context where

insolvency judges and administrators may lack the necessary training.

The establishment of commercial courts in 1997 significantly improved the treatment

of commercial and credit-related cases, which is perceived as being been more efficient and

coherent. It is also acknowledged that efforts need to be pursued regarding in particular

judicial training on commercial law, credit and banking-related issues as well as insolvency.

Sources of commercial law:

The Law:
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The Dahir of the 12 august 1913 forming the commercial code is highly inspired from the

French code. The book I is devoted to commerce in general and is completed by special texts

on the selling of the goodwill (fonds de commerce), the industrial property, capital societies,

the S.A.R.L (societes a revenue limit) and the commercial property.

All these texts have been inspired by French ones. However, the institution of the commercial

ledger (registres de commerce) rose from the German and Suisse laws. This ledger is a sort

of civil state of the enterprises. For example, the registration (immatriculation) of the

merchants had become mandatory by the Dahir of the 1st September 1926(droit commercial,

p14).

However, the commercial code doesnt include all the commercial transactions and cant

control the evolution of commercial techniques.

The Practices or Usages:

The practices are an important part when talking about commerce. According to the Dahir, the

practices are applicable if they do not contradict the fundamental principles of the commercial

law.

The International Sources:

These sources are supplied by the international professional practices. Therefore, any dispute

relative to an international contract will be solved without having resort to the Law.

Specificities and functions of the commercial law:

o Exchange law

Commerce is defined as sharing, speculation, search for profit and wealth.

Commercial law reflects a social state where men aim to achieve wellness and prosperity

(Taller, cited in Cherkaoui, 9). Indeed, commercial law gives a great importance to loans and
 22

their reimbursements. It also emphasizes on the diverse juridical means that regulate lucrative

corporations. This specificity of the commercial law shows clearly that this latter does not

take into account all kinds of non-profitable businesses. Commercial law is considered as the

empire of goods and values (Cherkaoui, 9). On the other side, civil law is more concerned by

morality and ethics. However, business ethics is an important issue to respect. Indeed,

unscrupulous competition is condemned by commercial law.

o Enterprise law

Entrepreneurship spirit is omniscient in commercial law. Indeed the goodwill of an

enterprise has to be dealt with in a specific manner. It is the entrepreneurship spirit that

justifies rules flexibility because obstacles to corporations actions must be limited. Note here

the significant importance of corporate wealth stated above. Consensus is an essential means

of conflict resolution. Actually, the parties need to be all satisfied vis--vis the arbitrage.

Following the same reasoning, the centrality of flexibility in commercial law is justified.

Another element of commercial law that regulates enterprises is the limited laps of time that is

taken for problem solving. What is worth mentioning is the difference between the time spent

in civil cases and that spent in commercial cases. Besides, the deadline for prescription is

shorter as well as evidence freedom.

o Law for professionals

The main actors of the commercial law are the professionals, primarily industrials and

merchants. This feature allows understanding the sharpness of commercial law penalties.

When the struggle occurs between an individual (consumer) and a professional, a change of

rules arises. The issue of balancing between both parties rights requires substituting to

commercial law the solutions resulting from civil law judgments. They are considered to be

more protective toward citizens.

 23

Commercial courts were initially an idea of the king Hassan II on June 1993. The

purpose behind creating commercial court was to relieve the courts of first instance from the

responsibility of treating with commercial cases because they need special trained judges and

they last for long time. These courts were called exceptional courts because they do not deal

with all cases. They mainly treat with commercial cases, but not all of them. Lower courts

deal also with some commercial cases. Commercial courts were established in Morocco in

1997 and they started functioning in May 1998. Commercial courts include both first instance

commercial courts and commercial courts of appeal. Actually, there are eight commercial

courts; one in each of Rabat, Casablanca, Fez, Tangier, Marrakech, Agadir, Oujda and

Meknes. There are only three commercial courts of appeals in Casablanca, Fes and

Marrakech.

Indeed, commercial courts in Morocco are composed of the following:

- A president, vice-presidents and magistrates.

- A ministre public in the person of the Kings general prosecutor and others

in the name of his substitutes.

- An office registry and a ministre public secretary. One clerk of the courts

office and one secretary of the Public Prosecutor.

- An audience.

The way commercial courts in Morocco are constituted reflects an organized structure

described in the following:

It is the role of 3 magistrates including a president and an office registry to come up with a

judgment or to decide on a dispute.

There are also commercial courts of appeal composed of the following:

- A prime president, room presidents and counselors.

- The Kings prosecutor and one or many of his substitutes.

 24

- An office registry and a public ministry secretary.

- An audience

In fact, many rooms constitute the court of appeal; each one is responsible for a

number of cases. Three counselors make the decisions; there is, from which, one president,

assisted by an office registry.

As stated previously, commercial courts do not deal with every commercial case.

Actually, commercial courts hear commercial cases with principle in controversy exceeding

20,000 Dirhams arising from:

Conflicts about commercial contracts.

Disputes between traders or business partners.

Disputes regarding commercial paper or commercial goodwill like

exploitation patents.

Most importantly, commercial courts oversee the activities of the commercial registry,

which is composed of local registries attached to local courts and a central registry under the

authority of the Ministry of Trade (legal vice presidency, World Bank). Its objective is to

register all persons engaging in trade. The central registry centralizes the information

collected locally and protects trademarks. Commercial registries make available official

information on traders to the public for a nominal fee. A coordination committee in the

Ministry of Justice ensures the coordination of all registration activities, as well as the

implementation of all relevant regulations.

Regarding the commercial procedure, it corresponds to four stages: referral, summons

to the proceedings, judgment or judges orders and, execution.

I. Referral:

This step, referral, is about a written petition signed by a lawyer listed in the register

of a bar association in Morocco which is submitted to the commercial court. Once the petition
 25

is registered, the President of the court designates a reporting judge to whom he refers the

case within twenty-four hours. Concerning the requests, they are recorded on a register made

for this purpose. The clerk delivers to the applicant a receipt; it has the name of the applicant,

the date the request was made, his number with the register and the number and the nature of

the enclosures. The clerk deposits a copy of the receipt in the file. Then, the president of the

court appoints following the recording of the request a judge. The file is sent to him within

twenty-four hour. This latter convenes the parts with the nearest audience with whom he will

fix the date.

II. Summons:

Summons are served either by a bailiff or through the means provided for in the code

of the civil procedure. For instance, an agent of the court clerk's office, via a registered letter

with acknowledgement of receipt or through administrative channels.

III. Judgments of judge orders:

After the hearing, the reporting judge determines the date of the sentence delivery

once the case is put up for deliberations. The law stipulates that a judgment cannot be

rendered before it is drawn up in extenso. This serves to avoid that sentence delivery precedes

the writing of the reasons presented for this judgment.

The deadline for appealing against a judgment rendered by the commercial court is

fifteen days as from the date of the notification.

The President of the commercial court may rule in a summary procedure and order all

measures not likely to be contested. Even in the latter case, he may order protective or

reparatory measures in order to prevent imminent damage or put a stop to a case of manifestly

unlawful activity.

The deadline for appealing against the judges orders is also fifteen days.
 26

The court President is furthermore competent to hear petitions requesting him to

deliver payment injunction orders based on commercial bills and genuine securities.

The deadline for appeal is ten days, without any possibility that this deadline or the

appeal itself cause a suspension of execution of the judges payment injunction order.

IV. Sentence enforcement:

The law stipulates that the President of the court designates a magistrate instructed to

follow up the enforcement procedures on the recommendation of the general assembly. The

execution agent should ensure, within ten days of the date of the execution request, either the

implementation of the decision or provide information on the intent of the sentenced party. He

should draw up a report recording the result of his undertaking.

Courts of Appeal try criminal cases, and deal with appeals against decisions judgments passed

by Tribunals of Original Jurisdiction. Courts of Appeal cannot address the irregularities of the

lower courts because they only handle cases involving crimes punishable by five years in

prison or more. In Morocco, there are 9 courts of appeal, 3 of them are courts of appeal for

trade. These three courts are located in Casablanca, Fez and Marrakech. Courts of appeal for

trade are composed of:

1) A First President, Presidents of room and judges;

2) A public ministry made up of general prosecutor of the king and substitutes;

3) A clerk's office and a secretariat of the public ministry.

The courts of appeal of trade can be divided into different chambers which deal with

different businesses cases brought to the Court. In addition, the audiences of the Courts of

Appeal of trade are held and three judges, of which there is a president, assisted by a clerk,

deliver the judgments.

 27

The courts of appeal for trade deal mainly with the cases that were initially judged by

the commercial court. Only cases which principal value is above 9000 MAD can be appealed

in the commercial appeal court.

Procedures Followed in the Courts of Appeal for Trade:

In order to make an appeal in the Courts of Appeal for Trade, commercial court should

at least be composed of 3 judges, including the chief justice, and the register of the court

unless the law specifies otherwise.

The motions of appeal have to be presented within 15 days starting from the date of the first

instance judgment. The petition of appeal should be presented to the registration of the

commercial court. The commercial court has then to transfer the petitions of appeal with the

documents concerning the case to the registration of the commercial court of appeal in no

more than 15 days. When it comes to the commercial court of appeal, the general regulations

listed in the civil procedure law should be applied.

 28

References

World Bank. (2003). Morocco Legal and Judicial Sector Assessment. Retrieved on April 23,

2008 from:

http://www4.worldbank.org/legal/database/Justice/Pages/jsJurisdiction.asp?

Country=2840&cD=Morocco&Year=2000&Jurisdiction=220

The Ministry of Justice. (2007). Procedures: Commercial courts. Retrieved on April 23, 2008

from:

http://www.justice.gov.ma/an/procedures/procedures.aspx?_idp=23

Publications de la Revue Marocaine dAdministration Locale et de Dveloppement (1998).

Code de Commerce. Rabat.

Ancient Moroccan History. (2007). Retrieved April 25, 2008 from

http://faculty.cua.edu/fischer/ComparativeLaw2002/Olson/Kingdom%20of%20Morocco

%20Legal%20System.htm