Out-Law News | 24 Mar 2021 | 1:51 pm | 2 min. read
A recent ruling could prompt multinational businesses entering into arbitration agreements seated in Qatar to select Qatar's International Court as the specific forum for resolving their disputes, an expert in international arbitration has said.
Doha-based Pamela McDonald of Pinsent Masons, the law firm behind Out-Law, was commenting after the court swiftly ruled on an application for an injunction as part of a dispute between two companies that are not based in the Qatar Financial Centre (QFC) in which the court is established, and published a separate 'note on ruling' to explain how it had determined that it had jurisdiction to rule on the matter.
"The application for an injunction was not successful, but the case is of interest because of the court's ruling on its jurisdiction," McDonald said. "The court quickly found it had jurisdiction to decide the matter despite the parties non-QFC status. That is significant because other than arbitration related matters where the parties agree to use it, the QFC courts are otherwise only available where one or both parties are established within the QFC."
Despite arbitration agreements in contracts, sometimes courts are needed to facilitate the arbitral process. They might be needed to hear applications for interim relief, to set aside arbitral awards, and to enforce arbitral awards, for example.
Qatar's Arbitration Law, formally Qatar's Law No. 2 of 2017 issuing the Law of Arbitration in Civil and Commercial Matters, provides an option for parties to elect to use Qatar's International Court within QFC rather than local courts.
The "competent court" can either be the Civil and Commercial Arbitral Disputes Circuit in the Court of Appeals or the First Instance Circuit of the Civil and Commercial Court of the QFC, or, for enforcement matters, the parties can elect the competent judge to either be the enforcement judge in the First Instance Circuit or the enforcement judge in the Civil and Commercial Court of the QFC.
On 17 March 2021 the Civil and Commercial Court of the QFC International Court's First Instance Circuit issued a 'note on ruling' following its decision in case C v D, made anonymous to protect the identity of the parties since the matter relates to an arbitration.
The note on ruling was issued after the court had published its decision on an application for an injunction in connection with an arbitration. It addressed the issue of jurisdiction.
Two non-QFC companies entered into a contract which provided for arbitration under the London Court of International Arbitration (LCIA) Rules, seated in the Qatar International Court and Dispute Resolution Centre (QICDRC) in the QFC.
The claimant in the case, who was in the process of filing a request for arbitration against the defendant, applied to the court for an injunction to maintain the status quo, pending the determination of the arbitration through the release of the arbitral award.
The court took just five days to decide the matter in favour of the defendant after the claimant filed its request for an injunction. The court considered that it had jurisdiction to deal with the application for an injunction on the basis that the parties had agreed as such by contract. This meant that, for the purposes of the Qatar Arbitration Law, the court was the "competent court".
McDonald said: "The court's decision gives comfort to parties to existing arbitration agreements which refer to the QICDRC in the QFC as being the competent court, or those considering it. The speed of the court's decision is a reminder of how efficient these courts are."
"The release of the note on ruling by the International Court is to be commended for its transparency and for the guidance it provides to members of the arbitral community in Qatar, practitioners, and companies whose contracts contain arbitration agreements seated in Qatar. Decisions like this one will likely lead to an increased number of arbitration agreements seated in Qatar electing the QFC courts as being the competent court," she said.