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Qatar arbitration law

Out-Law Guide | 27 Mar 2017 | 12:12 pm | 7 min. read

The Qatar Arbitration Law, which came into force in April 2017, repeals some articles of the Civil and Commercial Code of Procedure Law and replaces them with a series of provisions based around the UNCITRAL model law on international commercial arbitration.

Last updated in April 2017

The new law applies to all arbitrations that were under way when it came into force on 12 April 2017.

The arbitration agreement

The arbitration agreement must be in writing. This can include writing by electronic means, so if one party emails another saying "let's arbitrate" and the other party replies in agreement, they have entered into a binding arbitration agreement.

In drafting any arbitration agreement to be seated in Qatar, parties should ideally stipulate which local 'competent court' and 'competent judge' apply. If the Qatar Financial Centre (QFC) is stipulated as the seat with no further clarification then its separate arbitration rules would be likely to apply (outside of the new Arbitration Law).

Notices

Recognition of the award can be declined or refused if the party against whom the enforcement is sought was not duly notified.

Waiver of right to object

If a party fails to object within a reasonable time to the commencement or continuation of an arbitration, where it has grounds to do so under the new law, it will have waived its right to object.

Administrative contracts

Any agreement to arbitrate in respect of administrative contracts must be approved by the prime minister or any person delegated by him to give such approval. Public entities cannot use arbitration to settle disputes between them.

The term 'administrative contracts' is not defined though it has been used in other legislation in Qatar. Precisely how it will be interpreted under the new arbitration law is not entirely certain.

The tribunal

The default position is for a tribunal to be comprised of three arbitrators. It can be a different number if all parties agree, including through electing a set of institutional rules, but there must always be an odd number of adjudicators.

Under the new law an arbitrator must be selected from a register maintained by the Ministry of Justice. However, the law also says that arbitrators can be appointed from other lists, such as registers maintained by the International Chamber of Commerce (ICC). In practice 'competent courts' are still likely to appoint arbitrators from the Ministry of Justice register. It is permissible to nominate any other person as an arbitrator provided that they meet certain good character requirements.

The new law 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. Though there remains some uncertainty around how these concepts are defined this provision sets Qatar apart from the UAE, which revised its penal code in December 2016 to make arbitrators liable to imprisonment for acting contrary to the duty of impartiality and fairness.

The tribunal's jurisdiction

The new law provides the concept of 'Kompetenz-Kompetenz' which permits the arbitrators to rule on their own jurisdiction. Jurisdictional challenges must be raised no later than the date set for submitting the defence.

If the tribunal dismisses the jurisdictional challenge, the party has 30 days from notification to appeal before the applicable arbitral institution or the Competent Court.

Arbitral proceedings

In arbitral proceedings under the new law:

  • the tribunal must treat the parties equally and provide each party with equal opportunity to present its case;
  • parties can agree to adopt a set of applicable rules of any arbitration institution, such as the ICC rules which are the most commonly used in Qatar, either inside or outside the state of Qatar;
  • parties can agree to the seat of arbitration being inside or outside Qatar and parties and the tribunal may have meetings either in that chosen location or elsewhere;
  • proceedings commence on the date on which the Respondent receives the Referral;
  • parties may choose the language of the arbitration;
  • the Claimant will submit a Claim and the Respondent a Defence, together with supporting documents;
  • the tribunal may hold hearings to allow the parties to present their arguments, evidence and claims;
  • hearings must be recorded in writing and 'by other means' unless otherwise agreed;
  • the tribunal can terminate the arbitration if the Claimant does not submit its claim, but permit the arbitration to continue if the Respondent fails to submit the defence, although such failure is not deemed an acceptance by the Respondent;
  • the tribunal may appoint its own experts, unless otherwise agreed by the parties;
  • and, in a change from the old law, witnesses and experts are no longer required to take an oath.

The award

The tribunal is required to decide the dispute in accordance with the legal rules agreed to by the parties. If the parties expressly agree, the tribunal must decide the dispute in accordance with the principles of "justice and equity". However in all cases, the tribunal must decide cases pursuant to the provisions of the contract while observing the applicable commercial customs and traditions.

The decisions handed down by the tribunal must be delivered by the majority of arbitrators.  As is common practice in international arbitrations, the chairperson can make decisions regarding procedural matters.

All awards must be delivered in writing and signed by the tribunal. The new law clarifies a question that has raised issues in other GCC countries regarding the country in which the award must be signed: the award shall include the seat of arbitration and will be considered issued in that seat of arbitration. In effect this means that the tribunal does not have to travel to the seat of the arbitration to sign the award.

The parties only have a period of seven days from receiving the arbitral award to request the arbitral tribunal to correct any errors in the award or to provide any explanations. Following that the tribunal then has only seven days to issue its corrected award or explanation, though it can extend this period. This differs from the UNCITRAL model law which allows 30 days for each.

The law also introduces a new concept that will need further clarification in due course. Once the award is published, the tribunal has two weeks to send an electronic copy to the arbitration administrative unit of the Ministry of Justice. There are some concerns that this provision conflicts with the concept of privacy. There is also no guidance as to how such electronic service should take place and whether the award needs to be translated into Arabic for the purpose of serving it at the Ministry of Justice. Finally, the law does not state the consequence of failing to do so or how the information is to be used. 

The Competent Court and Competent Judge

While the tribunal has jurisdiction over the arbitral proceedings, the new law gives a definition of the Competent Court which is relevant to annulment and enforcement proceedings. The Competent Court is defined as the Civil and Commercial Arbitration Disputes Circuit of the Court of Appeals, or the Court of First Instance of the Civil and Commercial Court of the Qatar Financial Centre (QFC), as designated in the agreement of the parties.

The parties may not have agreed on a Competent Court in their contract. In such circumstances, the QFC has advised that parties may only make an application to the QFC court if they both agree to doing so.  The QFC court has confirmed it can accept jurisdiction over arbitrations even if both parties are non-QFC entities.

The new law also defines "Competent Judge" in the context of enforcement. The Competent Judge is the enforcement judge of the Court of First Instance or the enforcement judge of the Civil and Commercial Court of the QFC. 

Challenging an award through an annulment application

An award can be challenged within 30 days of the parties receiving the award, or the corrected award if it has been amended. The challenge is an 'annulment' application and is made to the Competent Court.

A party has grounds for annulment if:

  • one party lacked, at the time of conclusion, the necessary legal eligibility or capacity under the law agreed to by the parties, or under the new law;
  • the applicant for annulment was not duly notified of appointing an arbitrator or of the arbitration proceedings, or failed to submit a defence for reasons beyond his or her control;
  • the arbitral award decided matters not covered by, or went beyond the limits of, the arbitration agreement. If parts of the arbitral award relate to matters covered by the arbitration agreement and are separable from those not covered, the annulment will only be effective in respect of the parts that are not covered;
  • the composition of the arbitral tribunal, the appointment of arbitrators or the arbitration proceedings did not occur in accordance with what the parties agreed to, unless that agreement is in conflict with any provision of the new law, or, if there is no agreement between the parties, where the proceedings were carried out in violation of the law.

The Competent Court may suspend reviewing the annulment application at the request of either party to allow the tribunal to correct the arbitration proceedings and eliminate the grounds for annulment.

Enforcing the award

If no annulment application has been made within 30 days an application for enforcement can be issued to the Competent Judge.

To enforce the award, an application for enforcement is submitted together with a copy of the arbitration agreement, the original copy of the arbitral award or a signed copy in the language in which it was issued, and a certified Arabic translation of the arbitral award.

An Arabic translation of the award is therefore needed regardless of the court to which the enforcement application is made. However, the arbitration agreement would arguably not need to be translated if the application was made to the QFC courts, which conduct proceedings in English.

The grounds for making an enforcement application are largely similar to the grounds for annulment.

The decision can be appealed before the Competent Court within 30 days of the ruling being issued.