Rechtsanwalt, Legal Director
Out-Law Analysis 3 min. read
27 Sep 2023, 10:24 am
The Investment and Trade Court (Investment Court) in Qatar that came into operation in 2021 gave investors comfort that disputes would be resolved in a just and efficient manner, but they should be aware that this Investment Court has no jurisdiction over ‘administrative contracts’.
Whether a contract qualifies as an administrative contract is dealt with below but if a dispute arises and claims need to be resolved under an administrative contract then this case will need be heard in the Administrative Court.
Before the establishment of the Investment Court, cases in Qatari courts could take many years as a result of procedural delays. The law establishing the Investment Court specifically states that it cannot hear any dispute that falls within the jurisdiction of the Administrative Court.
This means that trading companies, private limited companies or PLCs, which are counterparties to contracts that are considered as administrative contracts will have to take cases to the Administrative Court which adopts a more traditional way of conducting litigation. This means that the case could take two or three years, and, for example in a construction contract context, the ability of a contractor to claim for variations and prolongation costs and other categories of entitlements under the contract would be constrained.
Put another way, the Employer to a construction contract in an Administrative Court dispute would be in a better position to refute such claims.
Another feature of an administrative contract is that if the parties are willing to include or agree on an arbitration clause in the contract or to the signing of a subsequent arbitration agreement, it is recommended to ensure that the parties have obtained the required approval of the prime minister, or any person delegated by him as required by the arbitration law No 2 of 2017. Otherwise a party may challenge the validity of the arbitration clause or agreement.
Administrative contracts confer significant advantages on public authorities, and in most cases they are signed on a ‘take it or leave it’ basis, containing provisions so advantageous to the stronger party – the public authority – that they would not be permitted in any other commercial or civil contract. For example, these provisions can allow it to amend or terminate the contract, or to perform the contract on behalf of the other contracting party, for example
It might be expected that Law No 7 on the Settlement of Administrative Disputes might have provided guidance on the necessary ingredients of an administrative contract. However this statute does not define what an administrative contract is.
Rulings of the courts are clearer. For example, in Qatar Court of Cassation appeal of 2008, the judgement provided the following guidance:
It has been established by this court that a contract shall be considered as an administrative contract where one of its partis belongs to the public law category and [the contract] is related to the operation of a public utility and it includes unusual conditions which are not common in the private law. Therefore, whenever the contract misses one of these conditions which establish an administrative contract, the contract, shall be considered as a contract that belongs to the private law’.”
Similarly, the Egyptian Supreme Administrative Court in a 2015 appeal established and adopted the same principle when identifying an administrative contract and provided the following guidance:
“The requirements to consider a contract as an administrative contract is to meet the three conditions at once. These three conditions are: one of the contracting parties must be a public legal person, [the contract] shall be connected to the activity of a public utility and [the contract] must contains unusual conditions which are not common in the private law. If a contract missed any of these requirements it shall belongs to the private law contracts’’ Following this guidance the test appears to be that:
According to the judicial decisions, a contract which did not have any one of these criteria would not be considered an administrative contract and it would therefore fall under the jurisdiction of normal civil and commercial courts in Qatar, including the Investment Court.
There are, though, rare occasions when ostensibly two private companies or people can conclude an administrative contract – this is when all the other conditions are met and the one of the counterparties has a delegation from a governmental authority to conclude the contract on its behalf.
Co-written by Mohamed Adam of Pinsent Masons
Rechtsanwalt, Legal Director