International Arbitration 2020

Last Updated August 18, 2020

Qatar

Law and Practice

Authors



Sharq Law Firm is a full-service law firm servicing the Qatari local market as well as international organisations inside and outside Qatar. It focuses on high-value construction, infrastructure, energy and real estate disputes, as well as project finance and development. In addition to representing clients in international arbitration, the firm's partners often appear as independent experts on Qatari law in international arbitration disputes. Members of the team are highly specialised in their respective practice areas and regularly represent clients in various arbitral institutions, including the ICC, the LCIA and QICCA, with their cases often making headlines. Members of the team include former members of the judiciary, international law firms, in-house counsel and prominent academics. The group's collective experience and industry-specific specialisms offer a strategic insight into the mind of the judiciary, arbitrators, experts and witnesses. Team members also often appear as independent experts in large international arbitrations, as well as sitting on various government panels.

Arbitration is the prevailing method for resolving disputes in major infrastructure projects in the State of Qatar, particularly regarding the contracts signed between international contractors and owners such as Qatar Rail, the Airport, the National Port, Qatar Petroleum and its subsidiaries, major developers (eg, Msheireb and Lusail) and some of the public works authorities (Ashghal) and Kahramaa projects.

The majority of the subcontracts signed between the main international contractors and subcontractors for those same projects are (in general) agreed to be resolved by arbitration.

Following the issuance of the new Arbitration Law (Law No 2 of 2017), more contracts have tended to be signed that include arbitration agreements as a dispute resolution mechanism.

Arbitration agreements concluded between an international and domestic entity tend to have Qatar as the seat of arbitration.

The new Qatar Arbitration Law (Law No 2 of 2017) provides further assurances as to the enforceability and limitation of court intervention in arbitration proceedings. The law also allows for the assistance of the Competent Court in taking evidence related to the subject matter of the dispute, including technical expertise services and the examination of evidence.

However, the cost of arbitration remains the main issue affecting the decision made by the parties on small to medium-size projects. Small to medium-size contractors (mainly local companies) see litigation as a cost-effective method by which to resolve disputes, despite the concerns they have regarding the time required by the courts to reach the final judgment and the proficiency and capability of the court-appointed expert. On the other hand, it is noted that the Qatar International Center for Conciliation and Arbitration's (QICCA) reasonable costings for arbitration proceedings tend to encourage small to medium-size contractors to agree on arbitration in accordance with QICCA rules at present.

The ongoing diplomatic tensions between Qatar on the one hand and Saudi Arabia, the UAE, Bahrain and Egypt on the other have continued to cause minor issues in 2020. These issues are typically limited to the selection of arbitrators, travel restrictions and changing the venue of the arbitration to a mutually acceptable location, such as Kuwait or Oman.

The main issue having an impact on arbitration in Qatar in 2020 is the mitigation measures taken to reduce the spread of COVID-19. The pandemic has caused some operational difficulties in the industry, but many international arbitral centres such as the ICC and domestic arbitral centres such as QICCA have been quick to adopt electronic means of serving documents. Arguably the most significant issue with COVID-19 has been the impact on hearings; however, both arbitrators and counsel have embraced virtual hearings managed by an independent provider who provides both a video feed and virtual transcripts.

The majority of projects signed between international contractors and government/semi-government entities for infrastructure works – such as Qatar Rail, the Airport, the National Port, the National Museum of Qatar, the major developments (eg, Msheireb and Lusail), Qatar Petroleum and Ashghal – are subject to international arbitration.

Some of the above projects are experiencing significant international arbitration activities either due to the termination of contracts by owners (eg, for non-performance) or due to a disagreement between the parties on variation orders (due to various reasons, such as change in design or specifications), leading to delayed completion of projects and increased costs/claims.

For major projects, the most frequently used arbitral institution is the ICC. The contracts are normally governed by Qatari law, and the seat of arbitration is Doha.

QICCA is becoming more popular for small to medium-sized contracts.

Arbitration agreements in the contracts for major projects generally agree that the seat of arbitration shall be in Doha/Qatar and, accordingly, the Arbitration Law of the State of Qatar shall apply. The new law (in the author’s opinion) is, in principle, based on the UNCITRAL Model Law, with considerations taken to avoid any conflicts with the laws of the State of Qatar.

It is also noted that the law governing contracts for major projects (substantive law) is the law of the State of Qatar.

The conflict of law rules contained in Article 34 of the Qatar Financial Centre (QFC) Arbitration Regulations must be applied, unless there is an agreement to choose the law applicable to the dispute.

There have been no significant changes to the national arbitration law in the past year, but the introduction of the new Arbitration Law No 2 of 2017 was a significant change.

The new Arbitration Law emphasises or introduces the following concepts that are fundamental for international arbitration.

  • Writing: an enforceable arbitration agreement must be recorded in writing. This may be on paper or in an electronic form, and the agreement must be reached between parties with the required legal capacity for the parties’ representatives to consent to arbitration to settle the disputes (Article 7). The old arbitration law contained in Articles 190 to 210 of Law No 13 of 1990 made no allowance for electronic writing.
  • Separability/competence-competence: the new Arbitration Law expressly and in accordance with Article 16(1) recognises the principle that an arbitration clause survives the invalidity of other clauses in a contract and, accordingly, the arbitral tribunal has the competence to determine its own jurisdiction (subject to the parties' right to appeal to the Competent Court or relevant arbitral institution).
  • Enforcement: the recognition and enforcement procedures are simplified, irrespective of in which country the award was issued. The Law also limits the circumstances where the courts may refuse enforcement (Articles 34 and 35). The old law had broader authority to decline enforcement.
  • Appeals: no appeals against awards are allowed on the merits; the only appeal allowed is by way of nullification/set-aside application on limited grounds, unlike the old law where awards could be appealed on the same basis as court judgments. The new law provides that challenges to awards must be filed within one month of the parties’ receipt of the award, which is longer than the 15 days previously allowed.
  • Interim relief: interim relief is expressly given as a right to arbitral tribunals to grant as may be required, based on the nature of the dispute or to prevent irreparable damage. The enforcement of the interim measures may require the Qatari courts' intervention, unless this is restricted by law or public policy (Article 17).

Pursuant to Article 8(1) of the Arbitration Law, a court will not accept a claim if a dispute is subject to an arbitration agreement, unless the court decides that the arbitration agreement is null and void, inoperative or incapable of being approved.

Article 7(3) of the new Arbitration Law stipulates that the arbitration agreement should be in writing. However, and pursuant to Article 7(4) of the Law, a statement by any party that the arbitration agreement exists in the pleadings (such as the Request for Arbitration or Statement of Claim) will satisfy the requirement that the agreement is in writing if that assertion is not objected to or challenged by the other party.

The other important requirement is that parties must have the legal capacity to enter into an arbitration agreement, and the arbitration agreement must be formed in relation to a specific legal relationship between the parties (Article 7(1) of the Arbitration Law).

Similarly, the QFC Tribunal will only hear proceedings where the arbitration agreement is null and void, inoperative or incapable of being performed (Article 11(1) of the QFC Regulations).

Article 10(1) of the QFC Regulations states that the arbitration agreement must be in writing and may be in the form of an arbitration clause in the contract or in the form of a separate agreement. The arbitration agreement must be in writing, even if the contract itself is concluded orally (Article 10(3)).

The new Arbitration Law provides simply that “arbitration may not be used in disputes of a type that the parties would not be legally permitted to settle themselves” (Article 7(2)).

The new Arbitration Law contains a definition of “commercial” disputes, and thereby envisages that those disputes will be arbitrable.

Therefore, the parties should consider the subject matter of their disputes and whether they can legally be referred to arbitration in accordance with the laws of Qatar. Disputes over administrative contracts or disputes of a criminal nature are not subject to arbitration, as they should be subject to the criminal law of the State and the courts of the State of Qatar.

The general approach to deciding whether a matter is arbitrable commences when the claimant proceeds with the arbitration. The respondent would normally challenge the proceedings through the supervisory court of the regulating body/institute (such as the International Court of Arbitration if the arbitration is governed by the ICC Rules), or with the tribunal if already constituted, as well as filing a case at the relevant Qatari courts for a determination on the admissibility of the disputed matter to arbitration.

Pursuant to Article 31(11) of the Arbitration Law, the arbitral tribunal must provide a copy of the arbitration award to the Ministry of Justice (electronically by email) within two weeks of the date of issuance.

The general approach of the Competent Court is to recognise and enforce the awards for the applications received, unless the court receives an application to set aside the award from either of the parties pursuant to the requirements and prerequisites defined by the Arbitration Law.

An application to set aside the award should be filed by either party before the Competent Court within one month (in contrast to the three-month time limit under the UNCITRAL Model Law) of the date of the parties' receipt of the award, or of the date on which the party making that application was notified of the award, or of the date of the issuance of a correction, interpretation or additional award as stated in Article 32 of the Arbitration Law. The parties may, however, agree in writing to extend the time limit for filing the application.

The award cannot be appealed, but it may be set aside on the basis of the following limited grounds (Article 33):

  • a party to the arbitration agreement lacked legal capacity;
  • the applicant was not informed of the appointment of an arbitrator or the proceedings, or failed to submit a defence for a reason beyond the applicant’s control;
  • the arbitration award falls outside the scope of the arbitration agreement; and
  • the formation of the arbitral tribunal or the appointment of the arbitrators was in violation of the Arbitration Law or the arbitration agreement between the parties.

In addition, the Competent Court may set aside the award if the subject of the dispute was not arbitrable, or if the arbitration award is not in accordance with the public policy of the State of Qatar. The judgment of the Competent Court is final.

Pursuant to Article 8(1) of the new Arbitration Law, any dispute that is the subject of an arbitration agreement will be deemed inadmissible in the court, unless that arbitration agreement is null and void, inoperative or incapable of being performed.

It is expected that Qatari courts will give full effect to valid arbitration agreements.

The new Arbitration Law expressly and in accordance with Article 16(1) recognises the principle that the arbitration agreement survives the invalidity of the contract; accordingly, the arbitral tribunal has competence and authority to determine its own jurisdiction, subject to the right to appeal to the Competent Court or to the relevant court of the arbitral institution.

Pursuant to Chapter 3, Articles 10 and 11 of the Arbitration Law, and as a principle, the arbitrator should be selected from a list of approved arbitrators held by the Ministry of Justice. However, the Arbitration Law permits the parties to nominate any person not from the Ministry list as an arbitrator provided said arbitrator:

  • is legally eligible and has full capacity;
  • has not been convicted of a felony or a misdemeanour relating to honesty and character, even if the person's name is later cleared; and
  • is of good reputation and conduct.

The Arbitration Law clearly states (Chapter 3, Article 10) that the tribunal must be composed of an odd number of arbitrators; otherwise, the arbitration is null and void.

Unless the parties agree, there is no specific restriction on the nationality of the arbitrator.

As per Article 14 of the QFC Arbitration Regulations, parties are free to agree on the procedure for appointing an arbitrator.

Pursuant to the Arbitration Law (Chapter 3, Article 11(6)), if the parties agreed on a chosen method or procedure for the appointment of the arbitrators that was not followed or failed to be achieved, either party may request the institute/authority or the Competent Court (as the case may be) to implement the required procedure (unless they have agreed on an alternative method of implementation). This may apply if one of the parties fails to adopt an agreed procedure, if the parties or their two nominated arbitrators are unable to reach an agreement in accordance with the agreed procedures, or if a third party fails to perform any task entrusted to it in the agreed procedures.

Article 14 (3) of the QFC Arbitration Regulations contains the procedure for when the parties are unable to agree on the procedure for the appointment of arbitrators. For agreements that provide for three arbitrators, each party will nominate a sole arbitrator who will then agree on the third arbitrator within 30 days of appointment. If the two arbitrators fail to agree on the third arbitrator within 30 days of appointment, or if a party fails to nominate an arbitrator upon the request of the other party, the appointment shall be made by the QFC Tribunal upon the request of a party.

For agreements stipulating a sole arbitrator, the QFC Tribunal shall appoint the sole arbitrator if the parties are unable to agree on the arbitrator within 30 days of receiving a request from the other party to do so.

Notably, the Arbitration Law and QFC Arbitration Regulations are silent regarding multiparty arbitration agreements.

Pursuant to the Arbitration Law (Chapter 3, Article 11 (5)), if the parties fail to agree on the appointment of an arbitrator within 30 days of the written notice being served by the applicant to the other party(ies), any of the parties may request the arbitral institution or the Competent Court (as applicable) to appoint the arbitrator.

If the parties agreed to have three arbitrators, each party must appoint its co-arbitrator; the two co-arbitrators must then agree to appoint the president. The arbitral institution or the Competent Court (as applicable) will appoint the arbitrators when requested by either party if either party fails to appoint its co-arbitrator within 30 days of receiving a request from the president within 30 days of the later dates of their appointment.

The Arbitration Law procedures for the appointment of arbitrators shall only apply in the absence of an agreement between the parties, or if no authority or institute's rules were agreed upon.

Pursuant to Article 13 of the Arbitration Law, if there is no agreement between the parties on the procedures for the removal of arbitrators, the following applies:

  • if any doubts arise as to the independence or impartiality of an arbitrator, either party can seek to remove the arbitrator;
  • an application to remove the arbitrator is to be submitted in writing to the arbitral tribunal, stating the underlying grounds and reasons for the application; and
  • if the arbitrator against whom the motion is brought fails to withdraw or if the other party objects to the motion, the arbitration is referred to the arbitral institution or the Competent Court, as applicable.

The decision of the arbitral institution or the Competent Court shall be final. The arbitral tribunal shall stay the proceeding awaiting the determination on the removal, including the decision on the expenses and fees for said arbitrator, as well as deciding on the amount to be recovered, if applicable.

As per Article 14 of the Arbitration Law, the arbitral institution or the Competent Court, as applicable, may terminate an arbitrator's appointment even if the parties do not agree on removing him or her if the arbitrator is unable to or fails to carry out his or her mandate and does not withdraw, or if there is, as a result, unjustified delay in the arbitration proceedings.

As per Article 16 of the QFC Arbitration Regulations, a party who intends to challenge an arbitrator of the constitution of the tribunal, or who has become aware of circumstances that are likely to give rise to justifiable doubts as to the arbitrator's impartiality and independence, sends a written statement to the Arbitral Panel. If the challenge is not successful, the parties may request, within 30 days of receiving the notice of the decision, that the QFC Tribunal decides on the challenge.

The arbitrators are obliged to disclose in writing any circumstances that may cast doubts on their neutrality or independence. This obligation remains even if the relevant circumstances arise after the appointment. Arbitrators must accept their appointment in writing (Chapter 3, Article 11 (3), Arbitration Law). The same requirements apply under the national law.

As per Article 15 of the QFC Arbitration Regulations, an arbitrator shall disclose any circumstances that are likely to give rise to justifiable doubts as to his or her impartiality or independence. This duty is ongoing and continues throughout the arbitral proceedings.

Administrative contracts may not be resolved by arbitration unless doing so is approved by the Prime Minister or any person delegated by him to give such approval. In addition, public entities cannot agree on arbitration to settle disputes between them.

However, other legislation in Qatar provides conditions under which contracts can be defined as administrative, as follows:

  • one of the contracting parties must be a public entity, such as the government or one of its institutions;
  • the subject matter of the contract must be related to a public utility; and
  • the contract must contain exceptional clauses that are unfamiliar in normal civil and commercial contracts, such as the employer’s right to seize the equipment of the contractor, attaching the contractor’s assets, etc.

These conditions must all be met in order to characterise the contract as an administrative contract and file a dispute before the Administrative Court.

Matters related to the public policies of the State of Qatar and matters of a criminal nature may not be referred to arbitration.

Pursuant to Article 16 of the Arbitration Law, the arbitral tribunal may determine matters related to its jurisdiction, including pleadings on the bases of the non-existence of an arbitration agreement, its invalidity, its nullity or the expiry of the subject matter of the dispute.

The arbitral tribunal may determine any of the above matters prior to determining the subject matter of the dispute, or in an arbitral award that is issued on the subject matter of the dispute.

However, if the arbitral tribunal dismisses the challenge, the party whose application was dismissed may, within 30 days of notification of the dismissal, submit an appeal before the applicable authority or the Competent Court (as the case may be), whose decision shall be final and not subject to any form of appeal.

The appeal does not prevent or restrict the arbitral tribunal from continuing the proceedings, nor from issuing the award.

For QFC arbitrations, as per Article 21, the Arbitral Panel may rule on its own jurisdiction. This must be raised by a party as soon as the matter is alleged to be beyond the scope of the Tribunal’s authority. As per Article 21(3), the Tribunal can rule on a plea either as a preliminary question or in an award on the merits. Within 30 days of receiving the notice of the ruling, a party may request that the QFC Tribunal decides on the matter.

The Arbitration Law clearly recognises the concept of competence-competence and, accordingly, the arbitral tribunal may rule on questions related to its own jurisdiction. However, the decision is subject to challenge before the related institution in the case of institutional arbitration, or before the Competent Court in the case of an ad hoc arbitration.

In practice, either party may still file a case at the applicable court to challenge the tribunal's jurisdiction following the tribunal's decision or ruling on the subject matter of the challenge, and not before.

For the circumstances in which a court can address the issues of jurisdiction of an Arbitral Tribunal, see 5.2 Challenges to Arbitration. Notably, if an arbitration agreement is valid and admissible and is not deemed null and void by virtue of Article 8(1) of the Arbitration Law, the courts will be reluctant to intervene in any decision made by an arbitrator, including negative rulings on jurisdiction.

If the arbitration proceedings are governed by an institution, the challenge should first be filed to the arbitral tribunal if it has been constituted, or to the governing body/institution if the tribunal has not yet been constituted.

In the case of ad hoc arbitration in the State of Qatar, either party may file the challenge at the Competent Court if they are not satisfied with the arbitral tribunal's decision on the matter of jurisdiction.

For QFC arbitrations, a party may request, within 30 days of receiving the notice of the ruling, that the QFC Tribunal decides on the matter.

This is not applicable in Qatar.

The approach of the national courts when a party commences court proceedings in alleged breach of an arbitration agreement is to inform the other party(ies) (respondent(s)) of the filed pleading. In general, the courts would reject the proceedings if the parties agreed on arbitration as a dispute resolution mechanism under the contract, unless the other party agrees with and/or commences the defence without any objection, which may be deemed acceptance and waiver of the arbitration agreement by the parties.

If the jurisdiction of the court is challenged based on the fact that the dispute is subject to a valid arbitration agreement, the courts will decline jurisdiction in most cases.

Pursuant to Article 7 of the Arbitration Law, the parties to the contract may agree to arbitration. Otherwise, the law is silent with respect to whether third parties who are neither party to an arbitration agreement nor signatories to the contract may be subject to an arbitration agreement.

The principle of the privity of contracts is established under Qatari law in Article 177 of the Qatar Civil Code (Law No 22 of 2004), which provides that “a contract shall not create obligations binding on third parties.” Furthermore, Article 175 of the Code provides that “a contract is binding on the contracting parties and their successors.”

The transfer of contractual rights and obligations by assignment or novation is permitted under the Civil Code. Therefore, a third-party transferee may subsequently become bound by an arbitration agreement.

In general, third parties may not be admitted, and only the parties to an arbitration agreement and their successors will be bound by it.

In accordance with Article 17 of the Arbitration Law, the arbitral tribunal can grant interim remedies as preliminary orders – the order will depend on the nature of the dispute – or for the prevention of harm that may not be reparable. These orders are for reasons specified by the law, as follows:

  • to maintain or restore the status quo pending determination of the dispute;
  • to act to prevent anything that is likely to cause current or imminent harm to, or prejudice, the arbitral process, or to prevent action that is likely to do so;
  • to provide a means of preserving assets out of which a subsequent award can be satisfied; or
  • to preserve evidence that may be relevant and material to the resolution of the dispute.

It is not clear under the new Arbitration Law whether interim relief can be granted on an ex parte basis. The local courts, however, have ordered a number of interim reliefs on an ex parte basis, which in principle means that the arbitrators will have the same authority.

Qatari law does not restrict the types of remedies available in arbitration, as long as they are not contrary to public policy.

Generally, Qatari law applies the principle of full compensation for the damage suffered (including losses, lost profits and moral damages, but not indirect damages) (Articles 263 and 264, Civil Code). However, contractual liquidated damages are admitted (Article 263, Civil Code), and punitive damages do not exist under the Qatari legal system. Awarding interest is uncommon, but there is no express provision preventing the enforcement of an award of interest.

Article 22 (2) of the QFC Arbitration regulations provides for interim measures as a temporary measure that can be issued at any time prior to the issuance of the award, by which the dispute is finally settled. The Arbitral Panel may order an interim measure for the same reasons as per Article 17 of the Arbitration Law.

As per Article 17(3) of the Arbitration Law, the competent judge shall order the enforcement of the interim measure, unless such order or award contradicts the law or public policy.

Article 23 of the QFC Arbitration Regulations provides that interim measures are enforced upon the application to the QFC Tribunal, irrespective of the country to which it was issued, unless one of the provisions of Article 23(2) is met.

The current legislation in Qatar and the QFC is silent on the use of emergency arbitrators as a solution for parties that cannot wait for the tribunal to be constituted to award an interim measure.

The Competent Court shall play a role in the enforcement of the preliminary or interim relief if ordered by the tribunal and the party upon which the relief is ordered refuses to comply.

Under Article 23 of the QFC Arbitration Regulations, the interim measure shall be recognised as binding and can be enforced upon application to the QFC Tribunal, irrespective of the country in which it was issued.

There is no explicit clause provided in the Arbitration Law; however, it appears that the arbitral tribunal is empowered to order security for costs similar to the empowerment to issue any preliminary or interim relief, and the Competent Court shall deal with it in a similar manner.

The parties are free to agree the applicable rules governing the procedures of arbitration at the time the contract is concluded or at any time later; in the absence of an agreement on the rules, the arbitration shall be an ad hoc arbitration. It will be up to the arbitrator(s) to agree on the procedures, which should be in line with the general guidance of the Arbitration Law (Chapter 3 and Chapter 4).

QICCA has its own arbitration rules, which may be applied if the parties agree. The rules can be found at http://qicca.org/wp-content/uploads/2016/08/QICCA_Rules_Eng.pdf.

If the parties agreed on the seat being Qatar, then the applicable procedural law shall be Arbitration Law No 2 of 2017.

Similarly, in QFC arbitrations, the parties are free to agree on the procedure to be followed (Article 25(1) of the QFC Arbitration Regulations) and the seat of arbitration (Article 26 (1)).

Arbitration proceedings must be in accordance with the rules agreed between the parties. In the absence of such agreement, the Arbitration Law regulates the procedures of the appointment of the tribunal and the arbitration proceedings (Chapter 3 and Chapter 4).

The standard duties of impartiality and independence are imposed on arbitrators by Qatari law, and the same principles are applied as reasons for dismissal. Article 12 of the Arbitration Law provides that “an arbitrator shall not be removed unless there are circumstances that may give rise to justifiable doubts about his impartiality or independence, or if he does not have the qualifications agreed by the Parties. None of the Parties to the dispute shall remove the arbitrator that it appointed or participated in the appointment of, except for reasons of which it becomes aware after the appointment is made.”

The arbitrators are required to have the consent of the parties, and to comply with the arbitration rules agreed upon, the procedural law and the substantive law of the dispute. Pursuant to Article 28 of the Arbitration Law, the tribunal is required to comply with the provisions of the applicable law, which provides that “the Arbitral Tribunal may not determine a dispute based on the principles of justice and fairness, without complying with the provisions of the law, unless the Parties expressly permit it to do so.”

The new Arbitration Law pursuant to Article 11(11) also confirms that arbitrators' liability is limited in that they can only be held liable for performance of their duties in circumstances of bad faith, collusion or gross negligence.

Pursuant to Law No 23 of 2006 enacting the Code of Law Practice, no persons other than lawyers shall pursue the practice of the legal profession; represent persons before courts, public prosecutors, arbitration tribunals, judicial administrative authorities and those of criminal and administrative investigation; defend persons in lawsuits instituted by or against such persons; perform pleadings and undertake judicial proceedings related thereto; give legal opinions and advice; or draft contracts, and take necessary procedures for the registration or authentication thereof.

The general approach to the collection and submission of evidence depends on the arbitral tribunal, and whether it has a civil code or common law background. The general approach under the civil code procedures is that the claimant must file all the supporting documents and evidence together with the Statement of Claim similar to a court proceeding, as the court legislation does not recognise discovery processes and procedures. It is worth stating that, under the civil code, the claimant and respondent are not obliged to provide documents they possess that may be adverse to their case. Therefore, it may be concluded that the discovery process is limited.

However, a party may request a specific document to be disclosed, with reasoning, and should substantiate its relevance to the case in order for the tribunal to grant the disclosure.

A tribunal of common law background may allow the parties to submit the witness statements and the expert reports after the submission of the pleadings and following the disclosure of documents required under the Redfern schedule.

The Arbitration Law does not provide for a specific preference on the collection of evidence and the stage of submissions (Article 23).

Cross-examination of witnesses of facts and experts is conducted at the hearing stage (if agreed or required).

The QFC Arbitration Regulations do not contain detailed provisions regarding the submission of pleadings and the evidence submitted. However, it does provide that the parties may submit with their statements of claims and defence all documents they consider to be relevant (Article 29 (1)).

As per Article 30 of the QFC Arbitration Regulations, and subject to any agreement to the contrary between the parties, the Arbitral Panel will decide whether to hold an oral hearing or whether the proceedings can be conducted on the basis of documents and other materials.

There are no specific rules of evidence required under the new Arbitration Law. However, Article 19 indicates that the parties are free to agree on the procedural rules, which would include the rules of evidence.

The parties can subject these procedures to the rules in force in any arbitration institution or centre inside or outside Qatar. Therefore, parties have the freedom to agree on any rules of disclosure or to follow the rules of any arbitration centre/institution they have agreed on.

Like the Arbitration Law, the QFC Arbitration Regulations also do not contain specific rules on evidence; rather, they indicate that the parties are free to agree on the procedures to be followed (Article 25(1)) and confer power on the Tribunal to determine the admissibility, relevance, materiality and weight of any evidence (Article 25 (2)).

The arbitral tribunal has the power to order the parties to disclose documents as evidence. However, there is no express provision in the new Arbitration Law stating that the tribunal can compel any of the parties to disclose documents.

However, if the evidence is held by a third party, the tribunal may ask the court with original jurisdiction over the dispute to issue an order either for the production of that evidence or to summon the third party to appear as a witness before the tribunal.

The arbitrators can also ask the court to punish any third party who refrains from appearing or refuses to give evidence. Generally, the arbitrators can seek the court's assistance to perform the necessary judicial procedures for the settlement of the dispute; for example, a regulatory commission.

Regarding the Competent Court's powers to enforce the attendance of witnesses, Article 27 of the Arbitration Law provides that:

“1. The Arbitral Tribunal, or any of the Parties, with the approval of the Arbitral Tribunal, may request the assistance of the Competent Court in taking evidence related to the subject matter of the dispute, including technical expertise services and examination of evidence. If the Arbitral Tribunal considers the requested assistance necessary to make a determination regarding the subject matter of the dispute, it may stay the arbitral proceedings until obtaining such assistance. This may result in the suspension of the specified time limit to issue the arbitral award.

2. The Competent Court may enforce the request for assistance, within the scope of its authority, in accordance with the rules it applies concerning obtaining evidence, including the judicial delegation of authority and sentencing witnesses who fail to appear before the court or who refrain from responding, in accordance with the procedures and penalties prescribed in Articles (278) and (279) of the said Civil and Commercial Procedures Law.”

For QFC arbitrations, the Arbitral Panel – or a party with the approval of the Arbitral Panel – may seek the QFC Tribunal’s assistance in taking evidence, which will execute the request within its competence.

The Arbitration Law does not expressly require arbitration proceedings to be confidential. However, Article 31(8) prohibits the publication of the arbitral award without the consent of the parties to the arbitration. This prohibition applies to all persons involved in the arbitral proceedings, including the parties, the arbitrators, the institution and any other person.

The QFC Arbitration Regulations do not contain a confidentiality provision.

For arbitrations seated in Qatar, unless expressly provided for at the institutional level or with the consent of the parties, it is unlikely that information in previous arbitral awards can be disclosed.

QFC Regulations do not contain a confidentiality provision, so there is nothing to stop parties referring to another QFC arbitration.

The legal requirements for an arbitral award are defined under Article 31 of the Arbitration Law, which provides the following:

"1. The arbitral award shall be issued in writing and shall be signed by the arbitrator or arbitrators. If the Arbitral Tribunal comprises more than one arbitrator, the signature of the majority of the arbitrators shall suffice, provided that the reason for any omitted signature is stated in the award.

2. The arbitral award shall state the reasons upon which it is based, unless the Parties have agreed otherwise, or if the legal rules applicable to the Arbitral proceedings do not require the statement of the reasons, or if the consent award is made pursuant to the previous article of this Law.

3. The arbitral award shall state the names of the Parties and their addresses; the names, addresses, nationalities and capacities of the arbitrators; a copy of the Arbitration Agreement; the date of the issuance of the award, and the place of Arbitration, as determined in accordance with Article 20(1) of this Law. The arbitral award shall be deemed to have been issued at that place. The award shall also include a summary of the requests, statements and documents submitted by the Parties, as well as the award ruling and its reasons if required to be stated.

4. The arbitral award shall state the costs and fees of the Arbitration and the Party who shall pay such fees and the procedures of payment unless the Parties agree otherwise.

5. The Arbitral Tribunal shall issue the award ending the dispute within the time limit agreed by the Parties. If such an agreement does not exist, the award shall be issued within one month following the conclusion of the proceedings. In all cases, the Arbitral Tribunal may extend the time limit, provided that it does not exceed one month unless the Parties agree otherwise and consent thereto."

However, the substantive/formal requirements are as follows:

  • the arbitration agreement must be in writing;
  • the parties must have the capacity to agree to settle the dispute through arbitration; and
  • the subject matter of the dispute must be arbitrable.

For QFC Arbitrations, Article 37 of the Arbitration Regulations governs the form and contents of awards, which must be signed by the arbitrator or arbitrators, state the reasons on which they are based, and state the date and seat of arbitration; in addition, a copy of the award signed by the arbitrators shall be delivered to each party.

As per Article 31(5) of the Arbitration Law, the award must be issued within the time limit agreed by the parties, or within one month of the conclusion of the proceedings.

QFC Arbitration Regulations do not contain any time limit for delivery of the award.

There are no restrictions under Qatari law on the types of remedies available in arbitration (as long as they are not contrary to public policy), nor in the QFC Arbitration Regulations.

Qatari law allows for compensation for the damage suffered (this may include losses, lost profits and moral damages, but not indirect damages) (Articles 263 and 264, Civil Code).

Liquidated damages are admitted at law (Article 263, Civil Code).

Punitive damages do not exist under the Qatari legal system.

In the case of an ad hoc arbitration, clause 4 of Article 31 of the Arbitration Law provides that “the arbitral award shall state the costs and fees of the Arbitration and the Party who shall pay such fees and the procedures of payment, unless the Parties agree otherwise.”

As relates to the factors that should be taken into consideration, this may include the nature of the dispute, its complexity, the parties' collaboration and the time required to present the parties' cases. Qatari law grants the tribunal the power to determine the costs deemed reasonable, provided the decision is based on solid grounds.

Interest is uncommon, and the Qatari Courts have previously rejected the enforcement of awards containing interest (violation of public policy), but there is no express provision preventing the enforcement of an award on interest if agreed between the parties.

Article 38 of the QFC Regulations does grant the Arbitral Panel the power to award interest on any sums it directs to be paid, and to direct how the costs are to be paid and by or to whom.

As relates to the parties’ rights to appeal, pursuant to Chapter 6 – Appealing the Arbitral Award, Article 33 of the Arbitration Law provides for the following on the applicability of setting aside the award.

Setting Aside the Award by Application

“1. An arbitral award may not be appealed by any method of appeal, except by way of setting aside in accordance with the provisions of this Law, before the Competent Court.

2. An application for setting aside shall not be accepted unless the applicant provides proof of any of the following:

a.       Any Party to the Arbitration Agreement was, at the time of concluding it, incompetent or under some incapacity, in accordance with the law that governs its capacity, or the Arbitration Agreement is invalid under the law to which the Parties have agreed, or under this Law, if the Parties did not reach such agreement;

b.       The Party making the application to set aside was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was unable to present its defence for any other reasons beyond its control;

c.       The award has decided matters outside the scope of the Arbitration Agreement or in excess of the Arbitration Agreement. However, if it is possible to separate the parts of the award that are related to Arbitration from the parts unrelated to Arbitration, only the latter parts shall be set aside; or

d. The composition of the Arbitral Tribunal, the appointment of arbitrators or the arbitral proceedings was not in accordance with the agreement of the Parties unless such agreement was in conflict with a provision of this Law, from which the Parties cannot derogate, or failing such agreement, was not in accordance with this Law.”

The Competent Court's Right to Set Aside the Award on its Own Motion

“The Competent Court shall decide to set aside the arbitral award on its own motion if the subject matter of the dispute is not capable of settlement by Arbitration under the law of the State or the arbitral award is in conflict with the public policy of the State.”

Procedures for Setting Aside an Award

“An application for setting aside is to be filed before the Competent Court within one month from the date on which the Parties have received the award, from the date on which the party making that application is notified of the arbitral award, or from the date of issuing the correction, interpretation or the additional award stated in Article (32) of this Law, unless the Parties agree in writing to extend the time limit for the filing of the application to set aside.

Unless the Parties agree otherwise, the Competent Court may stay the proceedings of deciding the application at the request of one of the Parties, if it considers it appropriate, for the period that it determines in order to give the Arbitral Tribunal the opportunity to complete the Arbitral proceedings, or to take any other measure that the Arbitral Tribunal deems appropriate in order to remove the reasons for setting aside.

The judgment of the Competent Court shall be final and shall not be susceptible to appeal by any method of appeal.”

It appears that it is not permissible for the parties to agree to waive the right to file an annulment action.

There are no provisions for an additional scope or challenge under the Arbitration Law; recourse against the award can only be made in the form of applying to have the award set aside, as set out in Article 33(2) of the Arbitration Law.

The position with the QFC Arbitration Regulations is the same, in that the parties' only recourse is to have the award set aside.

This is not applicable in Qatar.

Qatar is a signatory to the following international treaties that are relevant to the recognition and enforcement of foreign arbitration awards: the International Centre for Settlement of Investor Disputes Convention as of 14 February 2011, under Emiri Decree No 5 of 2011; and the New York Convention, under Emiri Decree No 29 of 2003  (http://www.newyorkconvention.org/countries).

Pursuant to Chapter 7 – Recognition and Enforcement of the Arbitral Awards, Article 34 of the Arbitration Law, the award shall have the status of res judicata and be enforceable.

The party that wishes to apply for enforcement shall file the application in writing to the competent judge. The application will need to include a copy of the arbitration agreement, the original award or a certified copy of it, in the language in which it was issued, and a certified translation of the award into Arabic. However, the parties are also free to agree to an alternative enforcement method.

The application may not be made before the limit set for the submission to set aside the award stipulated by law has lapsed.

For QFC arbitrations, as per Article 41 of the QFC Arbitration Regulations, an application to set aside may not be made after three months have elapsed from the date on which the party making that application had received the award, or, if a request had been made under Article 40, the date on which the request has been disposed of. The time limits do not apply if the grounds of the award are in conflict with the public policy of the QFC.

As per Article 35(1) of the Arbitration Law, if an award has been set aside by a court of the country in which it was issued, or in accordance with the law thereof, then the Competent Court may refuse the enforcement and recognition of the award.

The Arbitration Law is silent regarding state immunity in arbitration.

However, by virtue of Law No 10 of 1987 on Public and Private Sovereign Assets, the general rule is that public assets owned by the State of Qatar are immune from any legal action, execution and limitation or any acquired rights.

The waiver of immunity by the State is subject to the fact that, under Qatari law, such immunity may only be waived in respect of the State's public and private properties invested in financial, commercial or industrial activities or deposited in banks. In no circumstances is it possible to attach or execute against any assets or properties of the State necessary for its proper functioning as a sovereign power (for example, any military assets or any real estate or its contents owned by the Ministry of Foreign Affairs and located outside the State of Qatar). The waiver of immunity by the State contained in the transaction documents is limited to a waiver in respect of the State's public and private properties invested in financial, commercial or industrial activities or deposited in banks.

The general approach towards the recognition and enforcement of arbitration awards following the Arbitration Law that was recently issued and came into effect on 15 April 2017 is very restricted regarding the grounds on which the enforcement may be rejected, in that it can be refused on public policy grounds or set aside for any other reason defined by the Arbitration Law.

The Competent Court will tend to accept the award and the enforcement unless there are solid and genuine grounds for the challenge under the application for the award to be set aside, or when the judge on his own motion decides to do so on definite legal grounds – eg, public policy.

As per Article 33(3) of the Arbitration Law, the domestic courts will refuse to enforce foreign arbitral awards based on the public policy of Qatar.

Neither Qatari Law nor the QFC Regulations contain any express provision concerning class action arbitration, or the arbitrability of such claims, or the requirements that must be met before such claims may be arbitrated.

Counsel

The ethical and professional standards applicable to lawyers admitted to the Qatari courts are set out in Law (23) of 2006, Regarding Enacting the Code of Law Practice. This sets out the duties of counsel to act with integrity, honour and honesty in both his or her professional and personal conduct. Notably, at Article 50, counsel is to perform all duties in accordance with tradition.

The QFC has recently published a Legal Services Code at Part 6 of the QFCA Rules, which applies to all legal service firms and QFC lawyers. This code applies a common set of standards, including client care, confidentiality and conflicts.

Arbitrators

The Arbitration Law does not provide for a set code of ethics for an arbitrator; however, it does contain a provision at Article 11 (11) whereby the arbitrator shall not be held liable for exercising his duties as an arbitrator unless he has done so in bad faith, through collusion or with gross negligence.

The QFC does not contain a set code of ethics for arbitrators; however, at Article 19 of QFC Arbitration Regulations, it does contain an exception to an arbitrator’s immunity for an act or omission that can be shown to be in bad faith.

Third-party funding is relatively uncommon in Qatar, and there is no specific legislation or regulation concerning the third-party funding of arbitration cases. Given that Qatar does not follow the doctrines of champerty and maintenance, which is a common law doctrine, no specific provision exists that prohibits third-party funding.

There are no express provisions in Qatari law that provide for the consolidation of separate arbitral proceedings; however, parties could potentially consolidate with mutual consent or if provisions exist within institutional rules that allow for consolidation (such as Article 10 of the ICC Rules 2017).

The QFC, on the other hand, at Article 20 of the Arbitration Regulations, contains provisions for the consolidation or joinder of arbitration proceedings upon the application of the parties to two or more arbitration proceedings.

Neither the Arbitration Law nor the QFC Arbitration Regulations address the issue of third parties in arbitration.

As per the general principle of privity of contract (Articles 175 and 177 of the Civil Code), a contract is binding on the contracting parties only, as well as their successors. The Arbitration Law, at Article 7 (6), specifically provides for the event of the death of one of the parties, where the arbitration agreement may continue to be implemented by or against the persons who represent said party.

Sharq Law Firm

Alfardan Office Tower
22nd Floor
West Bay
Doha, Qatar

+974 4444 2230

info@sharqlawfirm.com www.sharqlawfirm.com
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Law and Practice

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Sharq Law Firm is a full-service law firm servicing the Qatari local market as well as international organisations inside and outside Qatar. It focuses on high-value construction, infrastructure, energy and real estate disputes, as well as project finance and development. In addition to representing clients in international arbitration, the firm's partners often appear as independent experts on Qatari law in international arbitration disputes. Members of the team are highly specialised in their respective practice areas and regularly represent clients in various arbitral institutions, including the ICC, the LCIA and QICCA, with their cases often making headlines. Members of the team include former members of the judiciary, international law firms, in-house counsel and prominent academics. The group's collective experience and industry-specific specialisms offer a strategic insight into the mind of the judiciary, arbitrators, experts and witnesses. Team members also often appear as independent experts in large international arbitrations, as well as sitting on various government panels.

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