Published on : 14 Jul 2015
Having discussed Arbitration in the UAE in Court Uncourt Volume I, we shall now turn to Arbitration procedures in other GCC countries.
Nonchalant observation of creatures such as birds, cats, dogs, and primates distinctly characterizes the fact that dispute and dispute resolution are not concepts confined to the human race. All animals settle the dispute by resorting to conflict – but whereas gorillas may beat their chests, skunks may emit scent and cats may sink their teeth into one another, human beings have developed somewhat more sophisticated dispute resolution mechanisms (thankfully – otherwise many lawyers may have reconsidered their career choices). Traditionally, the most commonly-utilized process among such methods was litigation – a mechanism which may involve not only the immense expenditure of time (months, or even years), but also mounds of paperwork (or nowadays— billions of bytes of digital information), and equally large costs. In modern times, however, contracting parties have begun to pay greater attention to other dispute resolution forums – most notably, arbitration.
Historically, GCC countries were wary of commercial arbitration owing to the way in which western law appeared to have been applied in lieu of Arabic law during oil concession disputes in the early 1950s. Following its loss in the Aramco arbitration, the Council of Ministers in Saudi Arabia issued a decree generally prohibiting arbitration in any dispute to which the government or any ministry or government agency was a party1 unless in “exceptional cases”.
Yet despite its historical unpopularity, international arbitration has become a dominant mechanism in the resolution of commercial disputes involving GCC- based entities.
As an emerging player in the GCC’s fields of investment, development, and commerce, Qatar has, in turn, established its own mainland arbitration center in order to cater for parties wishing to utilize arbitration as their dispute resolution mechanism. And just as Dubai’s independent international financial centre (DIFC) hosts its own centre of arbitration, so Qatar’s newly established jurisdiction, Qatar Finance Center (QFC) has established its own alternative arbitration tribunal to which disputes may be referred., the state still requires a lot of improvements to stand out as a world-class arbitration hub such as London, Paris, and Singapore. Lot more areas to be worked upon are its court system other areas like corruption and rule of law.
Regulatory bodies for Arbitration within the jurisdiction: There are therefore two legal arbitration jurisdictions in Qatar: the State of Qatar and QFC.
The State of Qatar, being a member of the GCC, is a signatory to the rules and procedures of the GCC Commercial Arbitration Centre (GCAC). This has its seat in Bahrain, but the awards rendered thereby are recognized in Qatar. In addition, the Qatar Chamber of Commerce and Industry established the Qatar International Center for Commercial Arbitration (QICCA) in 2006. As a free zone, QFC has its own jurisdiction and consequently its own individual regulations..
Requirements for Arbitration in Qatar: To date, there is no independent national arbitration law in Qatar. Instead, arbitration is incorporated into Qatar’s other legislation - specifically within Law Number 13 of 1990 entitled The Civil and Commercial Code of Procedure (the Civil Procedure Code) at Articles 190 – 210. The provisions deal with: (i) The formalities required for a binding arbitration agreement; (ii) The appointment and dismissal of arbitrators; (iii) The right of a party to apply for a stay of court proceedings given the existence of an arbitration clause; (iv) Timing; (v) The granting of an award; (vi) Challenge of the award; and (vii) arbitrator’s costs.
As an emerging global presence, Qatar has an avid desire to be internationally recognized for more than just its successful world cup bid and the wealth it has amassed from its lucrative oil and gas reserves. While addressing a symposium on “Arbitration and Alternative Dispute Resolution in Banking and Finance,” Sheikh Khalifa2, expressed:
“Arbitration as a dispute resolution process has tremendously boosted foreign investor’s confidence in Qatar and the region. We have learned from history that conflict exists wherever humans exist. However, in Qatar, we strongly believe in the power of sincere arbitration whether it is in the political domain or business and finance sectors. Qatar’s efforts to arbitrate go beyond the finance and business sectors. We remain the biggest proponent that conflict can be resolved through dialogue and harmony. This constant struggle to be a just arbitrator has made Qatar a preferred mediator for conflicting parties from Lebanon to Darfur to the Philippines”3.
Appointment of Arbitrators: The appointment of arbitrators is governed by the Procedural Code. The appointment has to be agreed in writing by the arbitrator unless they have been appointed by the court. Minors, people in custody, and certain other categories of people are prohibited from being appointed as arbitrators under Articles 193 and 194 of the Procedural Code.
A party may make requests to the original court of jurisdiction if: (i) it seeks to challenge the appointment of an arbitrator (Article 194); (ii) it seeks a court appointment of arbitrators (Article 195); (iii) it wishes to extend the time period for the proceedings (Article 197); and/or (iv) it wishes to compel a witness to attend proceedings or a third party to produce documents in evidence (Article 200).
Once an award has been made by the tribunal, it must be filed with the court that originally had jurisdiction - the successful party must then apply to the court for leave to enforce the award.
This is in contrast to arbitration procedures in Dubai, whereby the case is only referred for enforcement at the discretion of the successful party when the unsuccessful party is unforthcoming with regards to payment. Awards may be challenged and are subject to review by the original courts of jurisdiction as per Articles 205 and 206.
Challenge the appointment of an arbitrator: The appointment of arbitrators must be challenged within five days of notification of the appointment (Article 194 of the Procedural Code). Arbitrators may also be dismissed by the mutual consent of both parties. If there is disagreement between the parties, then, in the absence of any specific procedure set out in the arbitration agreement, the tribunal may be appointed by the court. The court’s decision is not subject to appeal, although a decision refusing to appoint arbitrators may be subject to appeal within 15 days as per Article 195.
Provisions for appeal of arbitrator’s decision and time limits: The Procedural Code provides that leave for appeal is subject to the same rules as an appeal against a court decision. Any appeal must be lodged at the competent court of appeal within 15 days from the date the award was made, pursuant to Article 205 of the Procedural Code. Arbitral awards may also be subject to a request for review by the court that would otherwise have had jurisdiction in the matter, again subject to the rules applicable to court decisions as provided in Article 206. If a request to set aside the award is submitted, the enforcement of the award can only be suspended, unless the court makes a decision under the purview of Article 208. The arbitration award can be set aside according to the rules of the court of original jurisdiction IF:(i) the award was made in the absence of a valid agreement to arbitrate; (ii) the award breaches the scope of the arbitration agreement or the rules of public order or good morals in Qatar; (iii) the arbitration agreement is not made in accordance with the rules set out in the Procedural Code; (iv) the arbitrators who made the award were not correctly appointed; and/or (v) the award was void or there were procedural flaws in the arbitration. If the award is set aside (either entirely or partially), the courts may refer the dispute back to the tribunal, or may themselves decide on the merits of the case if they have jurisdiction to do so as per Article 209.
Despite the arbitrational provisions already in place, it may be argued that the State of Qatar should now consider developing a separate commercial Arbitration Law in order to remain prevalent within the modern field of international arbitration. The nation may be well-advised to heed the approach taken by Egypt in this regard – namely, to adopt the UNCITRAL Model Law along with relevant amendments. However, regardless of the format that any new arbitration law may take, it is agreed amongst practitioners and commentators that reforms are needed in order to ensure that arbitration in Qatar keeps pace with arbitration as practiced in neighboring GCC countries. For further details, please consult with one of our lawyers in Doha, Qatar today!