SKANS School of Accountancy

Business Law
Solution Test 4:-
Question #1
Part (a) “Operator” means any financial or other institution or any person, authorized by the State
Bank to operate any Designated Payment System (DPS). (2)

Part (b) The State Bank may revoke the designation of a DPS if it is satisfied that:
a) the DPS has ceased to operate effectively as a PS; (1)
b) the operator of the designated system has knowingly furnished information or documents to
the State Bank in connection with the designation of the PS which is or are false or misleading in
any material particular; (1)
c) the operator or settlement institution of the DPS is in the course of being wound up or otherwise
dissolved, whether in Pakistan or elsewhere; (1)
d) any of the terms and conditions of the designation or requirements of the Act has been
contravened; or(1)
e) the State Bank considers that it is in the public interest to revoke the designation. (1)

The State Bank shall not revoke a designation without giving the operator of the DPS an
opportunity to be heard. (1)
However, the State Bank may suspend the designation of a PS without notice pending the final
order, if an immediate systemic risk is involved. (1)

Part (c) An Operator of a DPS shall establish the following operational arrangements:
a) rules and procedures setting out the rights and liabilities of the operator and the participant and
the financial risks the participants may incur; (1)
b) procedures, controls and measures for the management of credit, liquidity and settlement risk,
including rules determining the time when a payment instruction and a settlement is final; (1)
c) criteria for participation in the DPS; and(1)
d) measures to ensure the safety, security and operational reliability of the DPS including
contingency arrangements. (1)

Question #2
Part (a) A company (legal person) committed the offence of money laundering and one of its directors
was found guilty.
The company shall be liable to fine which may extend upto Rs. 100 million. (0.5)
The director shall be punished with rigorous imprisonment for a term which shall not be less than one
year but may extend upto ten years, (0.5) and also liable to fine which may extend upto Rs. 25 million,
(0.5) and also liable to forfeiture of property involved in money laundering or property of corresponding
value. (0.5)
Part (b) Acquisition, Conversion or Possession of Criminal Property (0.5)
If a person acquires, converts, possesses, uses or transfers property, knowing or having reason to
believe that such property is proceeds of crime, the person shall be guilty of offence of money
laundering. (1)
Concealment of Criminal Property (0.5)
If a person conceals or disguises the true nature, origin, location, disposition, movement or ownership
of property, knowing or having reason to believe that such property is proceeds of crime, the person
shall be guilty of offence of money laundering (1)
Possession of Criminal Property on behalf of others (0.5) If a person holds or possesses on behalf of
any other person any property knowing or having reason to believe that such property is proceeds of
crime, the person shall be guilty of offence of money laundering. (1)
Participation in Money Laundering (0.5)
If a person participates in, associates, conspires to commit, attempts to commit, aids, abets, facilitates,
or counsels the commission of the acts specified above, the person shall be guilty of offence of money
laundering. (1)
Question #3
Examples of such practices (include but are not limited to):
Limiting production, sale and unreasonable increase in prices or other unfair trading conditions.
Charging different prices from different customers for the same goods or services without any
objective justification (price discrimination).
Making sale conditional with purchase of other goods or services (tie-ins).
Making the conclusion of contract subject to acceptance of other parties of supplementary obligations
which by their nature or according to commercial usage, have no connection with the subject of the
contract
Applying dissimilar conditions to equivalent transactions for different parties (placing them at a
competitive disadvantage).
Driving the competitor out of market, preventing new entry and creating monopoly in the market by
predatory prices.
Boycott, exclude other undertaking from production, distribution or sale of goods or services.
Refusal to deal.

Examples of Prohibited agreements (include but are not limited to):

Fixing prices or imposing restrictive trading conditions for purchase, sale and distribution of goods &
services.
Dividing market by territories, volume of sale or purchase, type of goods and services or by any other
means.
Fixing or setting the quantity of production, distribution or sale with regards to goods
Fixing manner or means of providing any services.
Limiting technical development for production and sales of goods or services.
Collusive tendering or bidding for purchase and sale of goods and procurement of services.
Applying different conditions for equivalent transactions to different parties.
Making the conclusion of contract subject to acceptance of other parties of supplementary obligations
which by their nature or according to commercial usage, have no connection with the subject of the
contract

Question #4
Arbitration agreement means a written agreement to submit present or future differences to
arbitration, whether an arbitrator is named therein or not.

Legal representative means a person who in law represents the estate of a deceased person, and
includes any person who intermeddles with the estate of the deceased, and, where a party acts in
representative character, the person on whom the estate devolves on the death of the party so
acting.

Question #5
Common Powers of arbitrators or umpire

Administer oath to the parties and witnesses appearing;

State a special case for the opinion of Court on any question of law involved, or state the award,
wholly or in part, in the form of a special case of such question for opinion of Court;
Make the award conditional or in the alternative;
Correct in an award any clerical mistake/error arising from any accidental slip or omission;
Administer to any party to arbitration such interrogatories as may be deemed necessary
MCQs:

1 A

2 D

3 A

4 A

5 D